Illinois law requires that, in the event of a high-asset divorce, marital property be divided equitably, which is not necessarily the same thing as equally. The process of characterizing and dividing marital property can sometimes be time-consuming. Nevertheless, it is critical to invest as much time as necessary, or else the parties may well find themselves back in court only a few years later to resolve unanswered questions or address issues that should not have been postponed.
Years ago, Illinois was essentially a common-law state, meaning that the record owner spouse was also the actual owner, regardless of the facts in the case. That rationale has changed, at least to a considerable extent, and property division law in Illinois is now a multi-step process.
Characterization
Only marital property must be divided between the parties, but distinguishing between marital and non-marital property is not always easy. For example, Husband and Wife might use a $10,000 wedding gift from her parents (non-marital property) to fund improvements on the house they bought together (marital property). Or, Husband might add Wife’s name to the title on a rental house, because Wife has a higher credit score.
The former instance is an example of commingling, and Section 503(c) sets for the rules for division. Basically, if the contributing property loses its identity, it is “transmuted” into the other estate. Transmutation would have occurred if Wife used some of her gift to purchase new light fixtures or sod for the yard. In most cases, however, there is a contribution and reimbursement issue. So, if the entire $10,000 went to fund major home renovations, Wife’s estate should be reimbursed from the marital estate.
The latter instance is a voluntary conversion. Such a conversion can be made at any time by written agreement, either before or after the marriage. Significantly, the writing need not contain a statement of intent; any transfer generally suffices, unless there is clear and convincing evidence it was a gift.
Division
Once property is property labeled, it is split on an equitable basis. The court may use a number of factors to perform this division, including:
- Spousal Agreements: Most judges enforce any premarital or post-marital property agreements that were voluntarily executed and not patently one-sided.
- Length of the Marriage: Fault in the breakup of the marriage is normally not a factor in an overall property division, although it may be relevant for alimony purposes.
- Economic Circumstances: Both spouses’ current and future economic status must be considered.
- Non-Economic Contributions: This consideration arises if one spouse put career advancement on hold to care for minor children, and in other similar circumstances.
- Tax Consequences: A court may determine that it is in the best interests of the children for them to continue living in the marital residence with Husband, and order Wife to help pay the real estate taxes, if necessary.
The judge also has the option to consider any other factor that is deemed relevant or appropriate under the circumstances.
Reach out to Lawyers Who are on Your Side
An effective property division is a deliberate process. For a confidential consultation with Schaumburg attorneys who stand up for your legal and financial interests, contact Glasgow & Olsson. Convenient payment plans are available.