Earlier this summer, the Illinois Supreme Court ruled on a dispute between divorcing parties regarding the division of assets, and, in particular, how spouses’ pensions plans and future Social Security benefits should be taken into account when dividing marital assets.
Division of Assets and Marital Property
The Illinois Marriage and Dissolution of Marriage Act (IMDMA) addresses the division of assets related to a divorce. Upon divorce, parties can either reach an agreement or have a court decide how to divide their marital property. Marital property includes all property that was acquired during the marriage; it does not include the following types of property:
- Property acquired before the marriage;
- Property acquired by gift, legacy, or descent;
- Property acquired in exchange for property that was acquired before the marriage or in exchange for property acquired by gift, legacy, or descent;
- Property acquired after legal separation;
- Property excluded by a valid agreement of the parties (such as a prenuptial or postnuptial agreement); or
- Property awarded by a judgement to a spouse from the other spouse.
In addition to specifying the types of property that are not subject to division, the statute also specifically identifies several types of property that are subject to division. One such property type is pension benefits. Specifically, the statute notes that all pension benefits are presumed to be marital property, so long as they do not fall into one of the categories that are not subject to property division.
Recent Case
Earlier this summer, the Illinois Supreme Court issued a ruling in In re Mueller, a case in which one spouse participated in a pension plan, while the other would receive future Social Security benefits. The spouses disagreed about property division; the spouse receiving the pension plan believed that if the pension benefit was considered marital property and subject to division, the Social Security benefit should also be considered. He proposed that any division of his pension benefits be offset by the potential Social Security benefits.
The court found that Social Security benefits are hypothetical benefits, and in this context, where they have not yet been acquired, they are not marital property and therefore should not be subject to division or used to “offset” division of other assets.
Social Security as a Marital Asset
One of the rules that the court considered is the Social Security Act’s bar against using a “legal process to reach Social Security benefits.” In addition, the court noted other reasons why Social Security benefits are treated differently than pension benefits. First, Social Security benefits, as in this case, have not yet been acquired and are, therefore, difficult to value. In addition, it’s difficult to create a situation in which Social Security benefits are merely considered without any attempt at valuing the benefits and using those benefits to change property division.
If you or your loved one has questions about your rights upon divorce in Illinois, contact me for a consultation today. I can review your case and help you understand possible outcomes and the best options for you and your family.
