What is Considered Marital Property in Illinois?
The Importance of Understanding Marital Property in Illinois
Whether you're considering marriage or a potential divorce, understanding what constitutes marital property can have a significant impact on your financial future. The term “marital property” isn’t just limited to physical items; it includes both assets and debts accumulated during the marriage. Here's where it gets interesting—what about that promotion you got during your marriage, or the house you purchased with inheritance money? Is it considered part of marital property?
The Illinois Marriage and Dissolution of Marriage Act (IMDMA) offers detailed guidelines for determining which assets count as marital and which do not. Illinois operates under the legal principle of "equitable distribution," meaning that marital property should be divided fairly but not necessarily equally. So, what exactly does "fair" mean? This is where the real complexities come in.
What Exactly Is Marital Property?
At its core, marital property in Illinois consists of assets and liabilities acquired during the course of the marriage. However, some exceptions exist, and distinguishing these can sometimes become a challenging task.
Here are a few key categories of what is typically considered marital property in Illinois:
Real Estate: Any property, whether a primary residence, vacation home, or rental property, purchased during the marriage is typically considered marital property. Even if the title is in one spouse's name, the property can still be deemed marital if it was acquired during the marriage.
Income Earned During Marriage: Any income or earnings accumulated by either spouse during the marriage is considered marital property. For example, if you or your spouse received a promotion or bonus while you were married, those earnings are subject to division.
Pension and Retirement Accounts: This includes contributions made to 401(k) accounts, pensions, and other retirement plans during the marriage. Even if one spouse primarily funded the retirement account, it may still be subject to division as marital property.
Business Interests: If a business was started during the marriage, or a pre-existing business grew significantly due to marital effort or resources, it is likely to be considered marital property.
Debts: Debts incurred during the marriage are also considered marital property. This includes mortgages, credit card debt, car loans, and any other debts that were taken on while married.
What Is Not Considered Marital Property?
Understanding what doesn’t count as marital property is just as crucial. In Illinois, non-marital property is not subject to division in a divorce and includes:
Property Acquired Before Marriage: Any property or asset owned by one spouse before the marriage is typically considered non-marital property, unless it was commingled with marital assets. For instance, if you owned a house before marriage but added your spouse’s name to the title, the property might be considered marital.
Inheritance: Any assets received as inheritance during the marriage are generally considered non-marital property unless the inheritance was mixed with marital assets, such as depositing the money into a joint account.
Gifts: Gifts received by one spouse from a third party are typically considered non-marital property.
Personal Injury Settlements: Compensation for personal injuries, such as settlements or awards, is usually considered non-marital unless the settlement compensates for lost wages or medical expenses incurred during the marriage.
How is Marital Property Divided in Illinois?
Illinois follows the doctrine of equitable distribution, meaning that property is divided fairly, though not necessarily equally. Judges take various factors into account to determine what a fair division might look like, including:
- The length of the marriage
- Each spouse’s income and financial needs
- Contributions of each spouse to the marriage, including homemaking and child-rearing
- Whether one spouse needs more financial support, especially if they sacrificed career opportunities
- Any existing prenuptial or postnuptial agreements
Challenges in Identifying Marital Property
In many divorces, identifying marital property becomes contentious, especially when complex assets are involved. For instance, if one spouse owns a business, determining how much of the business is marital property can be difficult. Similarly, couples who have substantial retirement savings, stock options, or other deferred compensation plans may require expert assistance in calculating what portion of these assets is marital.
Even more challenging can be cases involving “commingled” assets, where non-marital and marital funds have been mixed together. For example, if one spouse had a savings account before the marriage but regularly deposited marital income into that account, the non-marital asset could become partially or entirely marital.
In these cases, it may be necessary to hire financial experts, such as forensic accountants, to help trace the origins of assets and determine how much of them are marital.
Protecting Yourself with a Prenuptial or Postnuptial Agreement
One way to avoid disputes over marital property is through a prenuptial or postnuptial agreement. A prenuptial agreement is signed before the marriage, while a postnuptial agreement is signed afterward. These agreements allow couples to determine ahead of time which assets will remain non-marital and how marital property will be divided in the event of a divorce.
Prenups and postnups are particularly common in cases where one or both spouses are entering the marriage with significant assets or expect to acquire large sums during the marriage. For example, if one spouse owns a business or expects a large inheritance, they may want to use a prenuptial agreement to protect that asset from being classified as marital property.
However, for these agreements to be enforceable, they must be fair and reasonable at the time they were signed, and each spouse must fully disclose their assets. Courts will not enforce agreements that are deemed one-sided or made under duress.
Conclusion: Be Proactive About Marital Property
Understanding what constitutes marital property in Illinois is crucial for anyone entering or leaving a marriage. Illinois law aims to ensure fairness in dividing marital assets and debts, but the process can be complicated, particularly when large or complex assets are involved. Having a solid grasp of the distinction between marital and non-marital property, and using legal tools such as prenuptial agreements, can help protect your financial interests. Whether you are considering marriage or divorce, consulting an experienced family law attorney is a smart move to navigate the complexities of marital property division.
Top Comments
No comments yet