Getting divorced will require you and your spouse to address multiple different types of financial issues. During your marriage, you combine your finances, make purchases together, and work together to pay expenses and debts. When you get a divorce, you will need to separate all of these aspects of your finances, and both of you will need to determine how you can manage your individual incomes and expenses. As you do so, one of your primary concerns will likely be how you will divide the property you own.
The process of dividing your marital property can often be very complex. Issues such as the length of your marriage, the extent of your assets and debts, and the resources you and your spouse will need to meet your ongoing needs can affect the decisions that are made. As you work to address these matters, one of the most important steps you can take is to secure representation from an experienced Will County divorce attorney. Your lawyer can help you understand how Illinois law applies to your situation, and they can advise you about how you can protect your rights and make sure you will have the financial resources you need both now and in the future.
Marital Property Vs. Separate Property
The property you and your spouse own together is known as the “marital estate.” However, it is important to understand what types of property will be considered part of the marital estate and what is separate property that is owned solely by one spouse. According to Illinois law, any assets or debts acquired by either spouse after the date of their marriage and before a judgment of divorce or legal separation are considered marital property.
Separate property will include any assets or debts that either spouse acquired before getting married or after a legal separation. Gifts or inheritances received by one spouse will also be considered separate property, and spouses can use a prenuptial or postnuptial agreement to categorize certain assets or debts as separate property.
While the marital estate will be divided between divorcing spouses, separate property will continue to be owned by the spouse who originally acquired it. While distinguishing between marital property and separate property is often a clear-cut matter, there are some situations where these two types of property can become “commingled,” making it difficult to determine how assets should be divided. Commingled assets are addressed a few different ways, including:
- If different types of assets have become combined, making it impossible to separate marital property and separate property, the separate property may be “transmuted” into marital property and become part of the marital estate. For example, if a spouse received an inheritance and deposited it into a shared bank account, which was then used to purchase property or pay expenses, the remaining balance of the account may be considered part of the marital estate.
- If one spouse contributed to the increase in the value of the other spouse’s separate property, the spouse who owns the separate property may be required to reimburse the marital estate for these contributions. For example, if one spouse owned a house before getting married, and both spouses made mortgage payments on the home during their marriage, the spouse may continue to own the home after the divorce, but the other spouse may be entitled to a larger share of marital assets based on their contributions to the home’s equity.
- In some cases, it may be possible to trace commingled assets back to their original source, allowing them to be properly categorized as marital property or separate property.
Addressing Different Types of Marital Property
In Illinois, marital property is divided according to the principle of “equitable distribution.” This ensures that each spouse will receive a fair and equitable share of the marital estate, but one spouse may receive a larger share, depending on their financial resources, their ongoing needs, their contributions to the marriage, or other factors. You may need to consider multiple different types of property during your divorce, including:
- Financial accounts – Bank accounts, investment accounts, or other types of monetary funds can usually be divided fairly equally, although depending on how other types of property are allocated between spouses, one spouse may receive a larger amount.
- Physical property – You will likely have a wide variety of different types of physical belongings that you will need to address. Ownership of items such as furniture, tools, books, kitchen utensils, exercise equipment, children’s clothing and toys, and other items around your home may be based on your and your spouse’s needs, how you have used these items in the past, and whether either of you have sentimental attachments to certain possessions. If you own valuable items such as jewelry, artwork, sports memorabilia, or collectibles, you may need to have this property appraised to determine its proper value and ensure that it can be divided fairly.
- Vehicles – You and your spouse may expect that you will each continue to own the vehicle you used primarily while married. However, the difference in value between these vehicles may need to be considered, such as when one vehicle has been fully paid off, while a significant amount is still owed on the other vehicle’s auto loan.
- Real estate – Since equity in the marital home is often one of the most valuable assets owned by a couple, determining who will own this property can sometimes be difficult. In many cases, it is most beneficial to sell the home, since this will allow you and your spouse to divide the profits and use the proceeds to address your individual living expenses. However, one spouse may wish to remain in the home, especially if they want to avoid uprooting their children from their school and community. In these cases, the home will need to be refinanced in one spouse’s name, and that spouse will need to make sure they can make ongoing mortgage payments while also covering expenses such as utilities, maintenance, and property taxes.
- Business interests – If you or your spouse founded or acquired a business after getting married, this business will be included in the marital estate. During your divorce, you will need to perform a business valuation to gain an understanding of the value of your business interests. In some cases, it may be best to sell the business and divide the profits with your spouse. However, if you want to make sure the business can continue operating, one of you may buy out the other’s share of the company, or you may decide to continue co-owning the business after getting divorced.
- Retirement savings and benefits – Money saved in retirement accounts may need to be divided between you and your spouse. If one spouse is eligible to receive pension benefits, the other spouse will usually be entitled to receive a portion of these benefits, depending on how long you were married while these benefits were being earned. If you will be transferring funds from a 401(k) or another type of retirement account during your divorce, you will want to use a Qualified Domestic Relations Order (QDRO), which will ensure that you will not have to pay taxes or penalties for withdrawing funds before retirement.
- Debts – Credit card debts, loan balances, and other types of debts that you and your spouse accrued while married will need to be divided alongside other marital property. It is important to note that if your name is on an account, creditors may pursue repayment of that debt from you, even if it was assigned to your spouse during your divorce. To avoid these issues, you and your spouse may try to pay off debts as much as possible before completing your divorce.
- Pets – Dogs, cats, or other animal companions may be considered part of the marital estate, and their ownership may be considered when you divide your property. However, if you cannot reach an agreement about who will own pets, Illinois law states that the well-being of pets may be considered when making decisions about sole or joint ownership. Factors that may play a role in these decisions include who had previously cared for pets and whether pets will be able to stay with a couple’s children.
During your divorce, you will need to gain a full understanding of all of the property you own, and this will help you determine how you can divide your assets and debts fairly. The best way to make sure you approach these matters properly is to work with a Joliet divorce lawyer who can advise you of your rights and advocate for your best interests throughout the divorce process. Your attorney can work with you to negotiate a divorce settlement that will put you in a good financial position, or they can represent you during divorce litigation and ensure that all issues are considered when addressing the division of your marital property.
