When going through a divorce in Illinois, you and your spouse are required to divide your marital assets in an equitable manner. In a previous article, we discussed how “equitable distribution” works in Illinois. In this article, we will cover the difference between “separate” and “marital” assets.
Separate vs. Marital Property: General Rule in Illinois
In Illinois, as in most states, the general rule is that the date of marriage is used to differentiate between spouses’ separate and marital assets. Anything that one spouse owned prior to the date of marriage is his or her separate property, and this means that it is his or hers to keep in the event that the couple gets divorced. Conversely, anything acquired after the date of marriage – whether by one spouse individually or by the spouses jointly – is considered marital property that is subject to equitable distribution.
For example, let’s suppose that you owned your car outright (i.e. you did not have a car loan) when you got married. If you still have your car when you get divorced, your car is a separate property that is yours to keep. On the other hand, if you bought a car during your marriage, even if the car is titled solely in your name, it is a marital asset that will be on the table during the divorce process.
Exceptions to General Rule for Separate vs. Marital Property
As is often the case, there are exceptions to this general rule. In fact, there are several situations in which an asset owned prior to the date of marriage can be converted into a marital asset; and, likewise, there are many circumstances in which an asset acquired during the marriage will become one spouse’s separate property. Some of the most common examples include:
- Property Received as a Gift – If you received a personal gift during your marriage, then the gift you received will be classified as separate property. This includes, but is not limited to, gifts from your spouse, parents, and children.
- Property Received as an Inheritance – Similarly, any assets that you received as an inheritance during your marriage will also be classified as your separate property. Of course, as with gifts, this applies equally to your spouse as well.
- Property Acquired in Exchange for Separate Property – If you sold or traded a separate asset during your marriage, then whatever you received in exchange also qualifies as separate property. This also applies to items you purchased with separate funds, provided that these funds were not commingled in a marital account.
- Property Acquired After a Legal Separation – If you and your spouse legally separate prior to getting divorced, then any assets that you or your spouse acquire during your separation count as separate property. Keep in mind, however, that assets purchased with joint funds will generally still be subject to equitable distribution as marital property.
- Property Governed by a Prenuptial or Post-Nuptial Agreement – If you and your spouse signed a legally-enforceable prenuptial or post-nuptial agreement, then the terms of your agreement may override Illinois’s default marital property rules. An agreement between fiancés or spouses can designate separate assets as marital property and vice versa.
In addition to these specific exceptions, there are also various circumstances in which it will not be entirely clear whether an asset is separate or marital; and, in some cases, an asset can have both separate and marital property components.
For example, if you owned a retirement account before you got married and then made additional contributions to the account after tying the knot, then the retirement assets you owned before you got married (as well as any increase in the value of those assets) will be considered separate property, while the post-marriage-date contributions (and any income earned on those contributions) will be marital property. Likewise, if you owned a business when you got married and the business grew during your marriage, then your spouse may have a claim to a portion of the business’s growth as well.
There are numerous other permutations of these examples; and, in order to determine which assets are yours to keep and which assets would be subject to equitable distribution if you were to get divorced, you will need to discuss your personal circumstances with an experienced Lake County, IL family lawyer. If you are considering a divorce and would like more information, we encourage you to schedule a free consultation.
Preliminary Steps for Identifying Separate and Marital Assets in Anticipation of a Divorce
Taking all of these various considerations into account, if you are contemplating a divorce, there are steps you can begin taking now in order to identify your separate and marital assets. These steps include:
- Preparing an Inventory of Your Property (Separate and Marital) – Make a list of everything you own. Yes, everything. As you create your list, to the extent that you can remember, make note of when and how you acquired each item of property.
- Compiling Bank Account, Checking, and Credit Card Statements – Compile your bank account, checking, and credit card statements from as far back as they are available. This will help you with identifying when you purchased each item on your list.
- Collecting Other Relevant Documentation – Tax records, records you have from the administration of your family members’ estates, loan records, and various other forms of documentation will be important to collect as well. At this point, you cannot have too much information, and you and your attorney can work together to decide what is relevant.
- Scheduling an Appointment with a Divorce Attorney – As you work through these steps, you are almost certain to have questions, and you need to make sure that you are classifying all of your (and your spouse’s) separate and marital assets correctly. The best way to avoid oversights and mistakes is to work closely with an experienced divorce attorney.
Schedule a Free Consultation with Gurnee, IL Divorce Lawyer Deanna J. Bowen
Are you thinking about filing for divorce? If so, we encourage you to contact us to learn more about identifying your separate and marital property. To schedule a free initial consultation with Gurnee, and Lake County, IL divorce lawyer Deanna J. Bowen, please call 847-623-4002 or request an appointment online today.