How Is the Division of Property Handled in an Illinois Divorce?

 Posted on October 28, 2021 in Division of Assets

Getting a divorce will require you to address many different legal issues, and figuring out how you and your spouse will separate your lives from each other can often be a complex process. Determining how to approach the division of marital property is not always easy, but by understanding how the laws apply in your case, you can make decisions that will protect your rights and financial interests, allow you to benefit from the effort you put into your marriage, and provide you with the resources you need to succeed as you move forward with your life.

During the divorce process, you can make sure you are taking the right steps to address property division by working with an experienced attorney. The lawyers of Weiss-Kunz & Oliver, LLC provide our clients with knowledge and understanding of how the divorce laws in Illinois apply to them and how disagreements between spouses can be resolved. Whether you need to address valuable assets during a high net worth divorce or are looking to negotiate a property settlement during an uncontested divorce, we can advocate for your interests and advise you on how to resolve disputes successfully and finalize your divorce as quickly and efficiently as possible.

Understanding Your Rights Regarding Marital Property

Before you can begin the property division process, you will need to understand what types of property will need to be considered. The assets you and your spouse own may be divided into two categories: marital property and non-marital property. Marital property includes all assets and debts you have acquired during your marriage (after the date you were married and before the date that you were legally separated). Non-marital property includes any assets either of you owned before you got married or that were acquired after a legal separation. Assets received through gifts or inheritances will also usually be considered non-marital property, and a prenuptial or postnuptial agreement may also be used to state that certain assets will be categorized as non-marital property owned by one spouse.

You and your spouse have the right to the equitable distribution of all marital property. While you are not required to divide your assets and debts equally, each of you should receive a fair and equitable share of the marital estate. Regardless of who purchased or acquired property or which spouse earned the majority of the family’s income that was used to purchase assets, all property in the marital estate is considered to be jointly owned by both spouses. Whether you were the primary income earner for your household, or you provided for your family in other ways, you deserve to reap the rewards of the effort you put in toward your marriage, and this means you should receive a fair share of the assets you own.

Factors Considered When Dividing Marital Assets

In many divorce cases, spouses are able to reach an agreement on how to divide their marital property. In cases where couples are unable to negotiate a workable settlement, they may need to use divorce litigation to resolve outstanding issues, and they may ask a judge to make the final decisions on how property should be divided. By understanding the factors that a judge will consider in these cases, you can determine the best ways to divide your property fairly and equitably.

Illinois law states that marital assets should be divided between spouses in “just proportions.” When determining how property should be divided, a judge may consider the following:

• Each spouse’s contributions - Both you and your spouse may have contributed toward the acquisition of assets, including by working and earning an income. However, other contributions may also be considered, including performing household duties that helped preserve the value of your home or managing family finances in a way that has increased the value of your assets.

• Each spouse’s circumstances - Property may be divided in a way that addresses the individual incomes you and your spouse earn and other financial resources that are available to each of you. For example, if one spouse earns a higher income, the other spouse may receive a larger share of the marital estate as an alternative to receiving spousal support. When making these types of decisions, you may also need to consider how your and your spouse’s age, health, employment status, work history, and debts or other liabilities will affect your individual circumstances. Decisions may also be based on the opportunities that each of you will have to earn income and acquire assets in the future.

• Child-related decisions - If you and your spouse are parents, the decisions you make about child custody may also affect decisions about property division. The parent with whom the children will live with the majority of the time may receive certain assets to ensure that they will be able to provide for children’s needs. You may also need to determine whether the custodial parent will maintain ownership and possession of your family home to ensure that your children will not be uprooted from their neighborhood and community.

• Tax consequences - You will want to be sure to understand how the decisions you make about the division of your property will affect the taxes owed by both you and your spouse. For example, if you choose to sell your home or other assets during your divorce, you may be required to pay capital gains taxes. Understanding and addressing tax-related issues will help you avoid financial problems that may arise after you complete your divorce.

Addressing Different Types of Marital Property

You and your spouse may need to determine how to divide multiple types of property, including:

• Money and investments - In some cases, the funds in financial accounts may be divided equally between spouses, although depending on how other property is allocated between you and your spouse, you may decide to divide money in other ways. You will also need to understand the value of stocks, bonds, or other investments that you own, including whether these assets are likely to increase in value in the future. This will ensure that you will be able to divide investments in a way that protects the financial interests of both parties.

• Real estate - When addressing ownership of your family home, vacation homes, or commercial real estate, you will want to make sure to understand the market value of these properties and determine the best way to handle ownership going forward. If one spouse wishes to maintain ownership of real estate that you co-own, the other spouse will need to be removed from the title, and a mortgage will need to be refinanced in one party’s name. The spouse who owns property will need to make sure they will be able to afford ongoing mortgage payments, utilities, maintenance costs, property taxes, and any other expenses related to the property.

• Family businesses - A business owner will often be looking to divide marital property in a way that will allow them to maintain ownership of their business. In these cases, a business valuation will need to be performed to ensure that you and your spouse fully understand the current and future value of business assets. If one spouse will maintain full ownership of the business, the other spouse may receive other marital assets of an equivalent value. If both you and your spouse have been involved in owning and operating a business, you may agree that you will co-own the business together and act as business partners following your divorce. If sole ownership or co-ownership will not be feasible, you may agree to sell the business and divide any profits earned from the sale.

• Vehicles - If you and your spouse each have a car or truck that you use regularly, you may agree that you will each maintain ownership of your primary vehicle. However, if one spouse’s vehicle is worth more than the other spouse’s car or truck, other marital assets may be divided in a way that addresses this disparity. You may also need to determine how you will handle ownership of additional vehicles, including boats, motorcycles, or ATVs.

• Valuables - Certain types of high-value property may need to be appraised to ensure that you and your spouse fully understand what it is worth. These assets may include jewelry, artwork, collectibles such as sports memorabilia, and designer clothing or furniture. In many cases, these items have sentimental value in addition to monetary value, so you and your spouse may need to make decisions about how you will each be able to keep items that are important to you while also ensuring that you will each receive an equitable share of the marital estate.

• Retirement accounts and pension benefits - By understanding the value of your retirement savings or the pension benefits that will be paid after a person retires, you can make sure you will have the financial resources you will need in the future. When dividing these types of assets, you can use a Qualified Domestic Relations Order (QDRO) to ensure that you will not be required to pay taxes or penalties for withdrawing funds before reaching retirement age.

• Debts - You and your spouse may have acquired multiple forms of debt during your marriage, including credit card balances, auto loans, or a home mortgage. You will each be responsible for repaying joint debts, and even if certain debts are allocated to one spouse, creditors may seek repayment from both spouses. To avoid difficulties for you or your spouse in the future, you may wish to take steps to pay off as much of your debts as possible during the divorce process.

Hidden Assets and Asset Dissipation

During the divorce process, spouses are required to fully disclose all of their marital and non-marital assets, as well as all sources of income and any other financial resources that are available to them. If you believe that your spouse has failed to disclose certain property, misreported income, or otherwise hidden marital assets in an attempt to unfairly influence the division of marital property, you can work with a forensic accountant to uncover any hidden assets. This will ensure that all of your marital property can be divided fairly.

You may also need to address asset dissipation by your spouse. This may involve any use of marital assets for non-marital purposes, such as using your family’s funds to pursue an extramarital affair or wasting marital property through gambling, or furthering a drug addiction. If you believe that your spouse should be required to reimburse the marital estate for assets they have dissipated, you will need to show that the dissipation took place after your marriage had begun to break down irretrievably.

Contact Our DuPage County Property Division Lawyers

Whether you believe that issues related to your marital assets can be resolved by negotiating a marital settlement agreement with your spouse, or you expect that you will need to pursue divorce litigation to resolve property-related disputes, our lawyers can provide you with the legal help and representation you need. We will advise you of your best options for resolving disputes with your spouse, and we will advocate for your interests throughout the divorce process. Contact our Elmhurst asset division attorneys today at 312-605-4041 to arrange a confidential consultation and learn more about how we can help you complete your divorce successfully.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://public.fastcase.com/ppbqSQpNDaJE%2F8PlIk0b8Nsk8Y3wJm7haqmAUALYjgU%3D