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posted on 2/18/17

The rule for marital property division in Illinois seems so straightforward: Property acquired before the marriage or by gift is non-marital, and according to the property presumption, everything else is marital property.

But in long marriages, the black-and-white lines are very gray because it is not always easy to trace complex and ongoing property transactions to their original sources. Furthermore, as time goes by, the original records usually disappear, making a difficult problem even more challenging.

Classification

Almost all non-cash property requires minimal upkeep and maintenance, and contributions well above that are the norm. Assume Wife received a rental house as part of the property settlement in a prior divorce. Over time, she and Husband use some of the proceeds from their jointly-owned business to make repairs and improvements on the house. By the time they divorce, it is occupied and fetching rents at slightly above market level.

The rental house is a classic example of commingled property; the same thing often applies to investment accounts started before the marriage and augmented with marital funds, like job earnings. After the tracing process (going back through old records to determine the source of the funds), a judge can make one of several conclusions:

  • The house itself is non-marital property and the improvements were essentially minimal maintenance, such as new paint and carpet, so Husband is not entitled to reimbursement. Therefore, both the house and the rent proceeds are Wife’s nonmarital property because the increase from separate property is also separate property.
  • The house is non-marital property and the improvements were more than de minimis (perhaps a major addition or partial renovation) that added substantial value to the house. In this case, Husband would be entitled to reimbursement for his half of the community contributions, so if the couple spent $20,000 on improvements, Wife must pay Husband $10,000. Nevertheless, since the house is still non-marital property, so is the income that it generates.
  • If the house was in such bad shape that it was uninhabitable and the couple made extensive repairs and/or renovations, like foundation repair, the judge may rule that the house has transmuted from nonmarital to marital property. Wife does not owe Husband any reimbursement, but the parties will split the income from the marital property.

To get to this point, lawyers often work with specialized accountants to accurately trace income and expenses.

Division

Illinois is an equitable division state, and “equitable” usually is not the same thing as “equal.” Basically, the judge must apportion marital property so that the divorce is not an unreasonable financial burden for either party. So, in the third bullet above, the parties may not necessarily split the house and the rents 50-50. Instead, the judge will divide all marital property based on:

  • Contributions to the Marriage: The law recognizes and respects both economic contributions from “breadwinner” spouses and noneconomic contributions from “caregiver” spouses. These roles usually overlap.
  • Standard of Living During the Marriage: Divorce usually reduces the standard of living for both parties, but this reduction should be as equal as possible.
  • Agreements: Illinois family law judges will normally enforce any property agreement between the spouses that was voluntary and not unconscionable.
  • Duration of the Marriage: This factor effectively multiples the “caregiver” factor while minimizing the “gold-digger” factor in a few short-term marriages.

Other key factors include an award of non-marital property, the amount of spousal support paid or received, and custody of minor children.

Contact Aggressive Attorneys

High-asset marriages usually involve complex property division questions. For a confidential consultation with an experienced family law attorney in Schaumburg, contact Glasgow & Olsson.

(image courtesy of Josh Felise)