I Signed the House Over to My Wife. Under Illinois Divorce Law, Is it Still Marital Property? (part 2)

In my last post, I set forth the legal framework in which Illinois courts examine whether property is marital or non-marital.  In this post, I apply that analysis to a hypothetical fact pattern.

Let’s assume Greg and Sandy are married. During the marriage, they purchase a house and title it jointly. During the marriage, Greg gets himself into legal trouble, and fears that he is going to be sued for several hundred thousand dollars. He hires a lawyer to prepare a quitclaim deed, and transfers his interest in the house to Sandy. The lawyer records the deed, making Sandy’s ownership of the property public record. Fortunately, the lawsuit Greg feared never materializes. They continue living in the house together until Greg files for divorce 10 years later. In the divorce case, Sandy claims that the house is her non-marital property.

Legally, the fact that the house was purchased during the marriage sufficiently raises the presumption that it is marital property under 750 ILCS 5/503(a). The fact that the parties initially titled it jointly reinforces that presumption. If Sandra wishes to assert that the residence is non-marital, she bears the burden of presenting evidence at trial to show that it was acquired as non-marital property under 750 ILCS 5/503.

Sandra claims that the quitclaim deed from Greg to Sandra proves the house was given to her as a gift.” The party seeking to establish that property acquired after the marriage is not marital property has the burden of proving that the property in question was intended to be a gift. Marriage of Hoffman, 94 Ill.2d 205, 446 N.E.2d 499 (1983). The presumption of marital property is overcome upon a showing by clear, convincing, and unmistakable evidence that the property was a gift. Marriage of Deem, 123 Ill.App.3d 1019, 1021, 463 N.E.2d 1317 (4th Dist. 1984). Mere proof that title to a tract was placed in one party’s name does not rebut the presumption created by Section 503; there must be donative intent to pass title and relinquish all present and future dominion over the property. Marriage of Davis, 215 Ill.App.3d 763, 771, 576 N.E.2d 44 (1st Dist. 1991).

In this case, the deed alone would not be sufficient to show that Greg intended to give Sandra the house as a gift. Furthermore, by signing the deed, Greg’s intent was never to give his wife a gift. Rather, he was simply trying to legally protect the house from his creditors. The fact that Greg continued to live in the marital residence until filing for divorce shows that he didn’t intend to relinquish his rights to the property. Without additional evidence to support her claim that Greg gave her his interest as a gift, Sandra will lose, as she bears the burden of proof.

This case is very similar to the case of Marriage of Leff, 148 Ill.App.3d 792, 499 N.E.2d 1042 (2d Dist. 1986). In that case, the wife claimed that the marital residence was her non-marital property. During the marriage, the husband signed a quitclaim deed titling the house in the wife’s name. During the divorce, the wife claimed that the husband did so as a gift, to secure her future, claiming that her husband wanted her to have the house. The husband testified that he transferred the house to protect the property from a possible malpractice claim, and did not intend it to be a gift. The husband continued to reside in the house until the parties separated. In the Leff case, the court found that the husband lacked donative intent, and that the wife’s testimony was insufficient to overcome the presumption of marital property.

See also: Marriage of Deem, 123 Ill.App.3d at 1022 (a deed itself is insufficient to show the transfer of marital real estate to the wife was a gift); Marriage of Davis, 215 Ill.App.3d at 772-773 (a husband’s transfer of title to their home was to eliminate a taxable asset in his estate, and that the home remained marital property).

 

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