Articles Posted in Property Division

When going through a divorce, a marital asset is defined as any asset that a party accrued during the marriage. For example, a husband’s retirement account that accrued during the marriage would be considered marital, while any portion of his retirement account that he accrued prior to the marriage would be considered non-marital. Therefore, when going through a divorce, the wife would only be entitled to the marital portion of the husband’s retirement account. The wife would not be entitled to anything that the husband accrued prior to the marriage.

Military-and-Civil-Service-Pension-Benefits-300x169

Of course, with any legal issue, there are certain exceptions. Cue the Martin v. Martin case that came down on June 20, 2019 in Florida. This case specifically dealt with military service and how pre-marital military service credits could become a marital asset in a pension. What most people don’t know is that a member of the military is required to accrue 20 years of military service to receive military retired pay, which is the proper term for what people often refer to as a “military pension.” If a servicemember has less than 20 years of service, they are unlikely to receive retired pay. However, those years of service can be applied to certain defined benefit pension plans to enhance the value of the monthly benefit at retirement age.

Continue Reading ›

Generally speaking, retirement benefits that are earned during the marriage are considered marital property under the Illinois Marriage and Dissolution of Marriage Act. However, determining the amount of spousal retirement benefits that are marital property is often times a central issue to the division of the marital estate upon divorce. In particular, retirement benefits such as a defined benefit plan or a pension can be more complicated to value at the time of divorce, especially where the employee spouse is not yet eligible for retirement.

Pension-Split-in-Divorce-Illinois-300x147

A defined benefit plan is a type of retirement plan that accrues benefits usually pursuant to some formula. This formula often will take into account several variables such as salary, length of service, and a multiplier. Because of these variables, the exact amount of the benefit that the employee will receive cannot actually be determined until they retire and the variables become fixed. Sometimes, after a certain number of years of employment, the pension plan may be able to produce an estimate of what the employee will receive upon retirement. However, the accuracy of the benefit amount depends on how close the employee is to actually retiring. Generally, under a defined benefit plan, the benefits are not considered to be “mature” because they depend upon the employee spouse reaching a certain age and they cannot be immediately paid to the other spouse (or “alternate payee” under the plan) at the time of divorce or entry of the Qualified Domestic Relations Order (“QDRO”). So, what do courts do when an employee is not yet eligible for retirement, but a portion (or all) of the pension or defined contribution plan is marital and subject to division upon divorce?

Continue Reading ›

It is not uncommon for a spouse to have  received an inheritance during the marriage.  When people are divorcing, one of the biggest issues is how the court will divide their assets. The first step a court must take when determining how to divide assets in a divorce case is to classify those assets as either marital or non-marital.  How would an Illinois court classify the inheritance?  Is it marital or non-marital?

inheritance-in-a-divorce-300x169

Pursuant to Section 503(a) of the Illinois Marriage and Dissolution of Marriage Act, all property acquired during the marriage is presumed to be marital property, except where that property is shown to be obtained by a certain method. Specifically, the statute lists “non-marital” property as “property acquired by gift, legacy or descent or property acquired in exchange for such property.” One party’s inheritance in a divorce case would typically fall under this category of non-marital property.

Continue Reading ›

When two people get divorced, the court allocates marital property among the parties. Previously, family pets were considered “property” and were allocated as such.

illinois-pet-custody-law-300x200

The seminal case in Illinois to address issues with family pets was Marriage of Enders, which was decided in 2015.  In this case, the parties agreed to “joint custody” of the two family dogs. Thereafter, the wife in this case denied the husband “visitation” of the two dogs. As a result, the husband filed a petition requesting visitation with the two pets. The trial court determined that the husband had no visitation rights, and the appellate court affirmed.

 

Subsequently, the Illinois legislature amended the Marriage and Dissolution of Marriage Act.  Now, Section 503(n) provides:

Continue Reading ›

The dictionary definition of “dissipation” is waste by misuse, to spend or use wastefully or extravagantly, to squander, to deplete.  The definition contained in the Illinois Marriage and Dissolution of Marriage Act refers to a spouse’s wasting of marital assets during while a marriage is undergoing an irretrievable breakdown.  What does that mean?

dissipation-waste-of-marital-money-300x200

 

In the case of Marriage of O’Neill, the court stated, “dissipation arises when property is improperly used for the sole benefit of one spouse, for a purpose unrelated to the marriage, at a time when the marriage is undergoing an irreconcilable breakdown.”   If a spouse spends marital money frivolously on items or individuals not related to the marriage while the marriage is breaking down, the other spouse may make a claim for dissipation in a divorce. In many cases, this arises when one spouse spends marital money on an extramarital affair, extravagant travel, and/or expensive hobbies, none of which benefit the marriage or family. Often a spouse does not learn of his or her partner’s dissipation until the discovery or information-finding step in the divorce.

Continue Reading ›

When going through a divorce, one thing parties are tasked with is dividing the marital estate.  This involves dividing marital assets, and allocating the responsibility of marital debts as well.  Debt that is incurred during the marriage is presumed marital.

Student Loan Debt

But what if the debt is for student loans incurred by only one party during the marriage?  At first blush, it may not seem fair to require the spouse working during the marriage to be responsible for the student’s loans, or even be responsible for a portion of them.  At the same time, the student may not have income, or may have pursued his or her degree relying on the working spouse’s representation that he or she would help pay the loans.

Continue Reading ›

Imagine the following scenario:  Kim and her boyfriend Kanye decide they want to get married.  Kim and Kanye have acquired a lot of money, bling, and swag throughout their years of work in music and promotions.  Kim, being the more cautious one, decides that before she and Kanye get married, they should sign a premarital agreement (better known by some as a prenuptial agreement or “prenup”) to protect herself in the event that fame wreaks havoc on the fledgling marriage.

Money in mout

Kim’s attorney drafts a premarital agreement that provides, among other things, that Kim’s earnings from the businesses which she started before her marriage, including her reality show, clothing line, and promotional appearances, will remain her sole and separate “non-marital” income.   Kim’s attorney gives the agreement to Kanye, who briefly glances at it while laying down a track, and signs it, without having his attorney review it.

 

Three months after the wedding, Kim decides the whole “marriage thing” is not right for her and files for divorce, in Illinois of all places.  During their short marriage, she has raked in a grand total of $3,000,000 in earnings from her various non-marital businesses.  In court, Kanye argues that the premarital agreement should be invalid.  He also argues that, even if it is found to be valid, that Kim’s $3,000,000 in earnings are marital in nature and that he should get half.  What should the result be for poor Kanye?

Continue Reading ›

One thing that occasionally complicates a divorce is when a spouse has an ownership interest in a non-marital business.  Countless hours of hard work have gone into the business, there are stocks and ownership interests involved, or perhaps one spouse has control over the business and the other has none.  There are several important situations to consider when you are going through a divorce and business ownership is involved.  Some of these important implications are addressed below.

business divorce

Contribution and Reimbursement

All property that is acquired by either spouse during a marriage is presumed to be marital property.  This includes income generated during the marriage, even if the income is generated from working at a non-marital business.  For example, if a husband is working at his non-marital business and paying himself a salary of $100,000 per year, his salary is marital property.

 

When a spouse contributes personal effort during a marriage to non-marital property, such as a non-marital business, the efforts may also be deemed a contribution from the marital estate to the non-marital property.  The value of these efforts and contributions, if in the form of retained earnings or assets, can be subject to reimbursement to the marital estate, particularly if the contributing spouse has not been reasonably compensated.  So, if your spouse is paying him or herself a $50,000 salary, but the reasonable salary for the work he or she does is $100,000, the marital estate has a reimbursement claim for the difference.

 

Finally, it is important to note that only the appreciation of non-marital property resulting from significant personal efforts of the spouse are subject to reimbursement to the marital estate.  This means, for instance, that if one spouse has $100,000 in an investment account before the marriage, and at the time of divorce the account is worth $200,000 due solely to favorable market conditions, the marital estate is not entitled to $100,000 reimbursement even though the appreciation occurred during the marriage.

Continue Reading ›

Section 503 of the Illinois Marriage and Dissolution of Marriage Act requires that a court divide the marital property in just proportions considering all relevant factors, including, among other things, the dissipation by each party of the marital property.  Legally, a spouse dissipates (or wastes) marital assets when he or she:

  • uses marital property
  • for his or her own benefit
  • for a purpose unrelated to the marriage
  • while the marriage is undergoing an irreconcilable breakdown.

In order to prove dissipation, all four of the above elements must be shown.  Dissipation can manifest itself in several ways, such as concealing assets, transferring them, selling them, spending money, or incurring debt without the other spouse’s knowledge or consent.  For example, the Illinois Appellate Court has found dissipation in the following circumstances:

  1. In the case of Marriage of Thomas, the husband dissipated marital property by causing the devaluation of a marital business through his inattention to the quality of service that the company was supplying its clients, his failure to solicit additional clients, and by stealing clients for his new business, even though he did not gain any personal benefit.
  2. In Marriage of Gurda, the husband’s committed dissipation by taking marital funds and investing them in a company that became insolvent, without informing his wife. He sold marital property, settled a lawsuit and a workers’ compensation claim, and took out home equity loan secured by marital residence.  The funds were subsequently lost as a result of the bad investment.
  3. In Marriage of Aslaksen, the husband dissipated marital assets when he failed to make court-ordered mortgage payments, and as a result the marital home went into foreclosure.
  4. In Marriage of Landfield, the husband removed $200,000 from common cash fund account.
  5. In certain circumstances, one spouse’s use of marital funds for expenses following irretrievable breakdown of marriage may be shown to be so selfish and excessive as to constitute a dissipation of marital funds, which may be considered in dividing marital assets following dissolution.  See Marriage of Blunda.
  6. Transfer of property, even non-marital property, for inadequate consideration may constitute dissipation, and the court may enjoin attempted dissipation of assets. Wood v. Wood.
  7. In Marriage of Charles, the husband dissipated marital assets by spending in excess of $116,000 on an extramarital relationship, liquidating investments, and failing to satisfy tax debt, thereby incurring over $26,000 interest and penalties.

Continue Reading ›

In a divorce, the Court has the obligation to equitably divide the marital assets and debts, and determine whether maintenance would be appropriate.  While non-marital property is not subject to being divided in a divorce, it may have a profound impact on the appropriate division of the marital assets and debts.  It may also be considered in determining how much maintenance should be paid.

 

Therefore, the first question is what is “marital property?”

 

Section 503(a) of the Illinois Marriage and Dissolution of Marriage Act defines marital property as all property acquired by either spouse subsequent to the marriage, except the following, which is known as non-marital property:

  • property acquired by gift or inheritance;
  • property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift or inheritance;
  • property acquired after a judgment of legal separation;
  • property exclude by valid agreement of the parties (e.g., pursuant to a prenuptial agreement);
  • any judgment or property obtained by judgment awarded to a spouse from the other spouse;
  • property acquired before the marriage;
  • the increase in value of property acquired by a method listed in paragraphs (1) through (6), irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effect of a spouse, or otherwise, subject to the right of reimbursement provided in subsection (c) of this Section; and
  • income from property acquired by a method listed in paragraphs (1) through (7) of this subsection if the income is not attributable to the personal effort of a spouse.

 

The law is clear: both inheritance and property acquired before marriage are non-marital.  This means that the party who owns the non-marital property will be keep it in the divorce, and the other party will have no claim to it.  In cases where one spouse has a sizeable amount of non-marital property this may seem unfair, particularly in the case of a long-term marriage.  Also, unlike property, a spouse’s non-marital income may be considered when determining the maintenance award to the other spouse.

 

Continue Reading ›

Contact Information