Chicago Property Division Lawyer
Couples never enter into a marriage with the expectation that it will end; however, some marriages inevitably end in divorce, leaving both spouses wondering what’s next. While many couples seek an amicable divorce, agreements don’t always happen, leaving the couple to argue over how marital assets should be divided. This contentious process can be time-consuming and frustrating for both parties.
At Stange Law Firm, our family law attorneys understand the difficulties and complexities of divorce, particularly when it comes to making the decisions and agreements that divorcing couples need to make. Dividing marital property and assets can be a difficult process, particularly when both spouses don’t agree. However, with the help of a skilled and experienced attorney, you can fight for what is fair and ensure you receive what you are entitled to in Chicago, IL.
Marital Property vs. Non-Marital Property
While much of what a couple owns is considered the property of both spouses, not everything is. It is not determined by who purchased the property and with what money, as many believe. In a marriage, the financial contributions of both spouses are seen as the result of both spouses supporting each other. An example of this would be a husband who stays home with the children because the wife earns an income that can support the family. Even though the husband does not earn an income, his wife’s ability to sustain the job is in part by his role of staying home. Thereby, he is contributing to the financial success of the family.
When determining the division of assets and property, Illinois law first requires the property to be listed as marital or non-marital property. The law uses a very basic standard to determine which category assets and debts may fall into. Quite simply, if the asset or debt was acquired during the course of the marriage and before the date of divorce, then it is considered marital property.
If an asset was acquired prior to the marriage, it could be considered marital property if it classifies as a commingled asset. A good example of this would be a bank account. Each spouse could have their own bank account that they had established before the marriage. However, if they contributed to that bank account during the course of the marriage, then it is now considered marital property. The same would be true of a retirement or investment account under the same circumstances.
Other examples of marital property include:
- Marital home or other real estate
- Vehicles, jewelry, artwork, and other physical property
- Household items
- Bank accounts
- Retirement accounts
- Insurance policies
- Debts, including credit cards, car loans, mortgages, student loan debt accumulated during the marriage, and others
There are a few exceptions to what is considered marital property. As an example, if one spouse received an inheritance, that is not considered marital property. If they choose to invest that inheritance separately and on its own, that investment, too, would not be marital property.
Other examples of non-marital property include:
- Any property that was acquired as a gift or inheritance or was acquired prior to the marriage
- Any property acquired by one spouse after a legal separation judgment
- Any property excluded as marital property in an agreement, such as pre- or postnuptial
- Any increase in value or income from non-marital property that takes place during the marriage, as long as not because of the effort of one or both spouses
How the Marital Estate Is Evaluated
Illinois is not an equal distribution state, but it is an equitable one. This means that both spouses are entitled to an equitable distribution of the assets. The first step in dividing the property is to evaluate the property for value. This includes all the financial assets of both spouses as well. While some spouses will give this information willingly and contribute to the process, it is not always easy and may require your attorney’s intervention.
The Illinois Code of Civil Procedure outlines the discovery process for civil cases such as divorce. In discovery, both parties will seek to unveil all marital assets that are both tangible and intangible. The discovery occurs in the following way:
- Your attorney will send questions and interrogatories to your spouse
- Any relevant third parties, such as individuals or businesses that may have information, will be sent a request for information
- Documents will be submitted along with any relevant depositions or examinations completed
- Witnesses such as financial professionals will be consulted (professionals are subject to subpoena)
- Information about income, investments, and other financial information will be provided
The discovery process is vital to ensuring there are no hidden assets. This can be quite common when divorce seems inevitable, and one spouse seeks to gain more from it or is unwilling to provide for the other spouse. Common ways spouses hide money include within a corporation one spouse owns, arranging for deferred compensation or stock allocations, and establishing off-shore accounts that may be used to hide money or avoid taxes.
To properly assess the value of marital assets, your attorney will help by utilizing resources such as forensic and appraisal experts who can speak to a variety of items and their fair value.
How Assets Are Divided
Once the assets are collected and valued, known as the marital estate, the court then makes the following considerations:
- What was the contribution of each spouse to the overall marital estate?
- What were the spending and saving habits of each spouse?
- How long did the marriage last?
- What is the overall health and income of each spouse?
- Are there any child custody arrangements that need to be taken into account?
- Are there any financial obligations from a previous marriage for either spouse?
- Are there any other financial circumstances that need to be considered?
- What is the total value of the property that is assigned to each spouse?
- What tax implications will need to be considered for each spouse?
- Is there a pre- or postnuptial agreement?
These considerations are then used to provide the most equitable distribution. Each consideration is taken at its own value, and each does not hold the same weight as the others. In addition, the judge will use their own discretion in dividing assets based on other contributing factors, such as the amount of spousal support one spouse may receive. These are the same considerations your attorney will use to ensure you receive all that you are entitled to.
A common myth in property division is that if a spouse commits an act of fault in the marriage, they will be penalized in the divorce. Acts of fault include domestic violence, adultery, substance abuse, criminal convictions, and more. However, the Illinois Marriage and Dissolution of Marriage Act, and Illinois’ no-fault state designation, excludes these factors in the final judgment for property division. However, these types of behaviors can play a role if it can be proven that these behaviors specifically impacted the couple’s finances in any way.
Marital Property During the Divorce Process
Once one spouse files for divorce, the process can take months to reach a conclusion. During that time, courts will often issue temporary orders to both parties that they must adhere to in order to prevent one or both parties from disposing of or altering assets. Under these orders, spouses are barred from the following:
- Selling any assets without the permission of the court
- Allowing any assets to willingly be at unreasonable risk of destruction or theft (such as leaving valuables outside)
- Donating or gifting marital assets to friends or family
- Destroying any marital assets
Any violation of these orders could impact the share of assets one spouse is entitled to and could cause the court to hold them in contempt.
Dividing a Marital Home
The home is one of the most difficult pieces of marital property to divide. This is because not only is there equity in the value, but one spouse may continue to reside in the home after the divorce is finalized. The equity of the home is determined by the fair market value at the time of the divorce minus any debts or liens that may exist. For some couples, dividing the home can be a difficult process. Ways a couple can divide the home include:
- Agree to sell the home and divide the remaining assets
- One spouse can refinance the home and buy the other spouse out
- One spouse remains in the home for a specific amount of time and then either buys out the other spouse or sells the home, and the assets divided
Dividing Retirement Accounts
Many disagreements in the marital property division process occur when one feels certain property should not be included, as is the case for many with a retirement account or pension. Because the account is added to during the marriage, it is then classified as marital property. A spouse may feel they are entitled to their entire retirement as it was earned through their individual job. However, using the stay-at-home dad scenario, the dad would not have a retirement to depend on because he chose to stay home.
Division of Debt
Debt can be complicated because many people don’t think about the debts a couple owns as divisible. After all, each spouse may have their own credit card, their own student loans, etc. However, any financial transaction that occurs during the marriage is thought to be an agreement between both parties. Therefore, any incurred debt becomes a part of the equitable split during the divorce process.
Unfortunately, in debt division, one spouse may not feel an obligation to contribute to relieving the debt because they were not the ones that ultimately accrued it. For example, if you and your ex-spouse were ordered to divide debt on a credit card that is in your name and your spouse fails to pay their portion because the credit card is in your name, you will likely still face creditors coming after you for the payment. This could result in your credit score being negatively impacted, which could incur more financial burdens later in life.
Impacts of Pre- and Postnuptial Agreements
Prenuptial and postnuptial agreements are specific terms that a soon-to-be or currently married couple agrees to specifically to protect certain individual assets should the marriage fail. These agreements, when done legally, create a binding decision on how specific property should be divided. Often, these agreements are used in marriages where one spouse brings significant finances to the marriage and one spouse starts a business venture or any other specific property. Unfortunately, these agreements are not ironclad. If the divorce is contentious enough, one spouse could argue they were coerced into signing the document because the other refused to marry if they did not.
Dissipation of Marital Assets
In some marriages, one spouse may engage in the act of dissipation. This is when one spouse utilizes martial funds for their own gain for purposes unrelated to the marriage. This only occurs during the time of irretrievable breakdown within the marriage. In cases where dissipation can be proven, the spouse who engages in the act may be required to reimburse the marital estate. Dissipation is addressed in the Illinois Marriage and Dissolution of Marriage Act.
Chicago Property Division Lawyer
Divorce is never an easy process, but it can be significantly more complicated when a couple is faced with dividing their assets. Because finances can be difficult to discuss, so too can the property those finances helped to purchase or accrue. At Stange Law Firm, our family law attorneys have the skill and experience needed to help our clients manage the divorce process and help them fight for the marital property they are entitled to. We help our clients ensure their spouse is not hiding any assets by ensuring the discovery phase is thorough. When it comes to evaluating property value, we work with industry professionals to help provide reasonable market value. No matter where you are in the divorce process, our team can help. We know that divorces aren’t easy, but when you contact Stange Law Firm, yours will be a little easier.
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