I Signed the House Over to My Wife. Under Illinois Divorce Law, Is it Still Marital Property? (part 1)

A common misconception many people have at the start of the divorce process is that only jointly-titled assets are considered marital property, and that everything else is not. For a number of reasons, often times the asset in question is the marital residence. Perhaps the husband has bad credit, and can’t get approved for a mortgage loan, so the house was purchased solely in the wife’s name. Perhaps, the wife is self-employed, and titled the house in her husband’s name to protect it from potential creditors. Litigants are usually either shocked or relieved to learn that, under Illinois law, the determination of whether house is marital or non-marital depends upon when and how it was acquired, and not necessarily on how it is titled.

Before a court may dispose of property in a divorce case, it must classify the property as either marital or non-marital. After classification, each spouse’s non-marital property is given to that spouse, and the marital property is divided in just proportions. Marriage of Hagshenas, 234 Ill.App.3d 178, 186, 600 N.E.2d 437 (2d Dist. 1992).   Pursuant to 750 ILCS 5/503(a), “marital property” means all property acquired by either spouse subsequent to the marriage, except for property which falls within certain enumerated categories. In order for property acquired during the marriage to be deemed non-marital, the party claiming it to be non-marital must present evidence that it was acquired in one of the following ways:

  • by gift or inheritance;
  • that it was acquired in exchange for property acquired before the marriage or acquired in exchange for property acquired by gift or inheritance;
  • that it was acquired after a judgment of legal separation;
  • that it was excluded from the marital estate by a valid agreement of the parties;
  • that it was awarded to one party by a judgment against the other;
  • that it was acquired prior to the marriage; or
  • that it was acquired by any other method contemplated by 750 ILCS 5/503(a).

In short, Illinois law presumes that anything acquired during the marriage is marital property and subject to division in a divorce case. If a party wishes to claim an asset to be non-marital, he or she bears the burden of proving that the asset meets one or more of the criteria listed above.

In my next blog post, I will examine a hypothetical fact pattern in which one spouse signs title over to the other during the marriage.

 

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