Property Division In The Prairie State

Illinois lawmakers drafted divorce laws with the objective of preventing the event of a divorce from being an undue financial burden on either party. So, the Illinois Marriage and Dissolution of Marriage Act (the “Act”) states that marital property must be divided “equitably,” which is not necessarily the same thing as “equally.”

Before real property, stock certificates, tangible personal property, and other items can be divided, they must be categorized as either marital or non-marital property. By definition, non-marital property is anything acquired either before the marriage or at any time by gift or inheritance. Section 503(b)(1) of the Act provides that all property acquired after the marriage (outside of gift or inheritance) is presumed to be marital property, with any party wishing to challenge this presumption having the burden of proof by clear and convincing evidence.

 

Classification

Although these directives may seem clear, the line is often blurry. For example, assume that a wife uses funds from her paycheck (marital property) to make the payments on a car that she bought just a few days before the marriage (non-marital property). Or, assume that a couple uses some of the proceeds from a second mortgage on their home (marital property) to fund minor improvements on a rental house that the husband inherited (non-marital property).

In these situations, property may be commingled, and the contributing estate might have a claim for reimbursement from the benefitting estate. In the first example, the marital estate may have a claim for a share of the equity in the wife’s car, because marital funds made such a significant contribution. But in the second example, if the improvements amounted to a few shrubs and perhaps a coat of paint, the marital contributions may be considered de minimis.

 

Division

To fairly apportion marital property between the ex-spouses, the judge may consider a number of factors, including:

  • The length of the marriage,
  • Relative economic circumstances of the parties,
  • Custody of minor children,
  • Relative age and health of the parties,
  • Future earning capacity,
  • Tax consequences, and
  • Any valid agreements between the parties.

The judge cannot consider fault in the breakup of the marriage as such, but there is a back door, because dissipation or “waste” of marital assets is a factor. For example, if the husband spent $10,000 in marital assets on a gift to a girlfriend, or gambled those funds away, the marital estate may be entitled to reimbursement.

 

Special Cases

IRAs, 401(k)s, defined contribution pension plans, and other similar assets often contain elements of both non-marital and marital property. In most cases, the non-owner spouse is entitled to half the funds that were contributed during the marriage. Non-owner spouses may generally elect a lump sum cash payout, transfer their shares into other retirement accounts, or obtain a share of future benefits. Special rules often apply to military and other government-sponsored retirement accounts.

Division of a closely-held business is often a complicated endeavor, in terms of classification. For example, business goodwill (“Joe’s Barber Shop”) is usually considered non-marital property, while enterprise goodwill (such as the name of a franchise) is typically marital property.

 

Reach Out to Assertive Lawyers

At The Fitzgerald Law Firm, P.C., we stand up for your legal and financial rights in a divorce. Contact our Naperville office today for a confidential consultation. Convenient payment plans are available.

 

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