When it comes to dividing property in a divorce, most states follow either an equitable distribution or community property approach. The difference being that community property states dictate a 50-50 split of all marital property while equitable distribution means that splits must be equitable, not necessarily equal. Illinois is an equitable distribution state, and any person who is preparing to divide marital property as part of a divorce in Illinois will want to be working with a Chicago divorce attorney.
Divorces can always involve many different legal issues, so determining how to approach the division of marital property can often be complicated. Many spouses can have significant disagreements about how to divide their marital property making settlement more difficult to achieve.
Marital Property vs. Non-Marital Property
Assets that spouses own can be divided into two categories: marital property and non-marital property. The phrase marital property generally includes all assets and debts a spouse acquires during their marriage.
Non-marital property will include any assets a spouse owned before they got married, including replacement property. Assets that are received through gifts or inheritances can be considered non-marital property too. In the rare case of a legal separation, property acquired thereafter may be non-marital.
Prenuptial or postnuptial agreements may specifically state that certain assets should be categorized as non-marital property owned by a single spouse.
Property Division Factors
The Illinois state law dictating the factors in property division cases is found in 750 Illinois Compiled Statute section 5/503. The 12 factors identified in this statute include:
- Each Party’s Contribution — Under 750 Illinois Compiled Statute 5/503(d)(1), a court must consider the extent to which either spouse contributed to the acquisition, preservation, or any increase or decrease in value of marital or non-marital property. Non-economic contributions such as being a or otherwise benefiting the family unit may be factored in as a contribution.
- Dissipation by Each Party —Dissipation is the wasting of assets or income that serves no marital purpose. 750 Illinois Compiled Statute 5/503(d)(2) requires a formal notice of a claim for dissipation to be filed with the court at least 60 days before trials or 30 days after discovery concludes, whichever is later. Dissipation claims can go back only five years prior to filing the petition for dissolution and are further limited by a three-year rule alleging a party should have known what was happening.
- Value of Property Assigned — Under 750 Illinois Compiled Statute 5/503(d)(3), this factor includes the value of both marital and non-marital property that is assigned to each spouse. Thus, a spouse with significant non-marital assets could lead to a court awarding a disproportionate share of marital assets to the other spouse. A spouse who has a sizeable non-marital estate could also end up with a disproportionate share of the marital debt.
- Duration of the Marriage — 750 Illinois Compiled Statute 5/503(d)(4) allows for longer marriages to lead to increased homemaker contributions while shorter marriages may prevent spouses from quickly divorcing high-earners to try and recoup significant wealth.
- Relevant Economic Circumstances, Timing, and Homes for Children — Under 750 Illinois Compiled Statute 5/503(d)(5), a court must consider the economic circumstances of each spouse and may allocate more property to a less financially secure spouse as a way of affording them some additional security. A court can also consider the timing of property division, such that certain assets may not be immediately available, and some income streams could be delayed. The law requires courts to keep kids in mind when deciding what to do with a marital residence, so a court has the authority to keep children in a former marital residence.
- Prior Marriages — 750 Illinois Compiled Statute 5/503(d)(6) establishes that when a court is dividing property, it must consider whether one or both spouses receive or pay child support or maintenance as part of a court-ordered obligation from a prior relationship.
- Agreements — Under 750 Illinois Compiled Statute 5/503(d)(7), prenuptial and postnuptial agreements can be enforced and certain agreements may identify certain items as being non-marital property. Agreements might also bar a spouse from receiving alimony.
- Situational Factors — 750 Illinois Compiled Statute 5/503(d)(8) instructs a court to consider the health, age, occupation, station, amount and sources of income, employability, vocational skills, liabilities, estate, and needs of each spouse when dividing assets and liabilities.
- Custody — Under 750 Illinois Compiled Statute 5/503(d)(9), a court must consider the custodial provisions for any children. Custodial obligations can impact a parent’s ability to work or may restrict where they live.
- Maintenance — 750 Illinois Compiled Statute 5/503(d)(10) establishes that a court can make an award of maintenance instead of, or in addition to, property division.
- Future Income and Property— Under 750 Illinois Compiled Statute 5/503(d)(11), judges must consider the reasonable opportunity each spouse has for future acquisition of capital assets and income. A court can apportion more property to a spouse bearing an income disadvantage.
- Taxes — 750 Illinois Compiled Statute 5/503(d)(12) provides that judges can consider the possible tax consequences of property distribution. One spouse could be awarded stocks or other investments instead of cash only to learn later that converting the stocks to cash will involve a major tax bill. Property transfers between spouses and child support should be non-taxable.
Hidden Assets and Asset Dissipation
Spouses are required to fully disclose all their marital and non-marital assets as well as all of their sources of income and any other financial resources that are available to them. When you think your spouse is not disclosing certain property, is misreporting their income, or otherwise hiding or mishandling marital assets, you need to work with a skilled attorney who can help uncover hidden assets and streams of income.
As previously mentioned, dissipation can involve any use of marital assets for non-marital purposes or wasting assets. This could include using a family’s funds to pursue an extramarital affair, wasting marital property on gambling, or spending money on a drug addiction.
Common Factors in Property Division Cases
Every divorce is different. Common areas of property division disputes include:
The Marital Home — Disputes often arise in divorce cases over who keeps the home, the value of the home, or if the home should be sold. A home can be a unique and special piece of property to which one or both spouses have an emotional attachment. Often, they house minor children and therefore the court may consider the home an important factor in its decisions because judges are required to protect the best interests of the kids. Also, because the house typically represents a significant asset, if not the largest asset in a divorce, dividing can be contentious.
Retirement Accounts — While many people tend to think all their retirement accounts will be awarded to them, the marital portions will be divided. The contributions to a retirement account during a marriage, as well as the investment gains or losses thereon, is a marital asset subject to be divided equitably
Investments — Even when only one spouse funded an investment during the marriage, it will generally be a marital asset. Common issues related to investments include determining the value, factoring in tax consequences, and handling restrictions related to transferring the asset from one spouse to the other.
Inheritance — Many people want to keep inheritances for themselves, and in many cases that is the outcome. Generally, property acquired during the marriage by gift or inheritance is one’s non-marital property. However, the recipient of an inheritance can takes steps that result in non-marital property becoming marital property. For example, an inheritance often becomes a marital asset if it is commingled, i.e., the inheritance is placed in a joint bank account or spent on a jointly titled asset.
Debt — Debts incurred before the marriage usually stay with that spouse. When a debt accumulates during a marriage, most often it is equitably allocated between the parties. However, issues arise when debts incurred during the marriage for purposes that were unrelated to the family’s needs or were incurred after the spouses separated.
Contact An Experienced Chicago Property Division Lawyer
If you are currently in the midst of a dispute about property division relating to your divorce in Illinois, do not think that you have to handle everything by yourself. Michael C. Craven is an experienced Chicago area divorce attorney who knows how to help his clients achieve the most favorable outcomes in property division cases.
We invite you to call (312) 621-5234 or contact us here so you can set up an initial consultation that will allow us to discuss your case with you in person. Michael C. Craven, Divorce Lawyers Chicago handles cases throughout the greater Chicagoland area, including Lake Forest, Evanston, Highwood, Deerfield, Northbrook, Glencoe, and many other surrounding communities in Cook County.
