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| Home > Divorce Q&A's: (sect-Property issues in divorce) > Distribution of Property | |||||
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Distribution of Property in a DivorceThe Gitlin
Law Firm, P.C., Woodstock, Illinois © 2008
Q:I have heard that there is a presumption in Illinois that everything has to be divided equally in a divorce? Is this true?A:No. Illinois divorce law requires property to be divided “equitably” which is not necessarily the same as equally. In fact, I find in most divorce cases where there is a long term marriage, the property settlement is not equal. It generally favors the spouse who has far fewer career opportunities and income potential. There are a number of factors the court is to consider in making an award of property.
Q:Everything that was purchased during our marriage was placed in my husband's name. Will he have an advantage to this if we are divorced?A:Generally, no. If property was acquired during the marriage, there is a presumption that the property would be determined to be marital property. The most significant exceptions to this rule are:
There are other exceptions which are not discussed here.
Q:What does that all mean? Can you take these one at a time? What about gifts?A:Property acquired through gifts appears to be simple enough but it is often quite complex. A number of times there is an issue whether a gift is to one party alone or to a couple. Property acquired before the marriage also appears to be straight-forward but it is not.
Q:What about property acquired before the marriage? This seems clear-cut, correct?A:While it seems clear-cut, the case law is not as clear. For example, it is possible that certain property acquired before a marriage might be determined to be “property acquired in anticipation of marriage.” There is a legal theory under which such property (usually houses which are purchased by a couple shortly before a marriage) will be considered marital in character despite the fact it may have been purchased a short period of time before the couple's marriage.
Q:What is the other group of property you mentioned that is considered to be non-marital? How does this work?A:Property acquired in exchange for what would otherwise have been non-marital property is equally tricky. If such property was placed in any form of co-ownership, there may be a presumption of gift to the marriage which has to be overcome by clear and convincing evidence. In short, the issue of characterization of property as non-marital or marital can be quite complicated and is often one of the significant issues in divorce proceedings.
Q:How can I make certain that gifts and inheritances will remain my non-marital property?A:The best way to ensure this is not to place any such property in any form of joint ownership. Doing so raises a presumption that the property is marital.
Q:I have a premarital house. It has remained in my name alone and I have paid for the house out of my income. Can my wife have any claim against the equity in the house that was built up during the marriage?A:Illinois law provides for what is called “reimbursement.” To simplify matters, assume that the parties' joint earnings pay for the mortgage, taxes and insurance on the premarital house. In such a case, there should be the right to reimbursement, but there are several ways to measure the right to reimbursement. A detailed discussion is beyond the scope of this Q&A.
Q:Are there income taxes associated with the transfer of property during a divorce?A:No. Generally the transfer of property at the time of a divorce is not a taxable event. It is considered to be much the same as a gift. Keep in mind, however, that when certain assets are ultimately sold, there may be tax consequences.
Q:I have a premarital 401(k) plan from my previous employer. I have an option of rolling these funds over to my new employer's pension plan now that I am married. Should I do so?A:No. What is important is that you do not commingle premarital and marital assets. This is not necessarily limited to 401(k) plans. As is indicated in the Gitlin Law Firm's Q&A regarding premarital agreements, what is important for appropriate divorce planning is to keep premarital assets in your own name and not to combine (commingle) these assets with marital assets. Another good example is a premarital brokerage account. Even if the account remains in a person's own name, there should be no contributions from any marital source (including depositing of one's pay-checks.) Doing so also creates an argument that there is a commingling of funds and should be avoided.
The Gitlin Law Firm provides the above information as a service to potential and current clients. A person's accessing the information contained in this web site, is not considered as retaining The Gitlin Law Firm for any case nor is it considered as providing legal advice. The Gitlin Law Firm cannot guarantee the outcome of any case. The Gitlin Law Firm's divorce practice is primarily in McHenry County, Lake County, Kane County and Boone County, Illinois. The Gitlin Law
Firm, P.C. www.gitlinlawfirm.com
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