How Is Community Property Determined And Decided In Illinois?
Most Illinois divorce cases involve decisions about dividing property and other assets. In some divorces, the spouses may agree on how to divide things, and there are no disputes. But in others, property division questions must be decided in court. Learn about property division and community property in the following article. If you have questions about community property in a divorce, our Schaumburg divorce lawyers at Law Office of Fedor Kozlov can help.
Illinois Is Not A Community Property State
Illinois is not a community property state when there is a divorce. Instead, Illinois is an equitable property division state, meaning that assets are not split 50/50. Rather, the divorce court will divide property equitably, according to each person’s situation and contributions.
Types Of Property In A Divorce
One of the most essential aspects of dividing property in a divorce is determining what is separate and community property. If property is not categorized correctly, there can be confusion, arguments, and the potential of an unfair divorce settlement. Correctly organizing all marital assets and holdings is essential and will lead to an equitable property division. These are the definitions of the types of property in a divorce:
Separate property includes the assets the individual parties acquired before the marriage or through a gift or inheritance. Separate property also includes assets you bought with your money during the union. This kind of property is not divided during the divorce process.
Community property includes assets and debt acquired through the parties’ efforts during the marriage. This type of property may include earnings in a joint bank account or any property acquired with that money. Community property is usually equitably divided in an Illinois divorce. Some of the types of community or marital property are:
- Money and investments: In some divorces, the funds in various financial accounts could be equally divided, but this depends on how other property is divided between you. You must also know the value of different investments, such as stocks, bonds, metals, etc. Also, will those investments rise in value in the future? Understanding these things will ensure that the assets are divided fairly.
- Real estate: This category may include the family home, vacation homes, rental properties, and commercial properties. Make sure you understand what the market value is of each piece of property.
- Businesses: If you own a business, you may want to divide it in a way that allows you to keep ownership. This may require you to have a business valuation performed.
- Vehicles: If you and your partner have a car you use regularly, you could agree that each will keep ownership of the primary vehicle. But if one person’s car is worth more than another, other marital assets may be divided to make up the difference.
Commingled property is that which is a mixture of separate and community property. For example, if you have a pension you earned before and during the marriage, this could be commingled property. Another example might be a business you owned before the marriage but your spouse worked at while you were married.
Determining the property classification can be challenging during a divorce and is one of the reasons it is so important to have an experienced divorce attorney advising you. For example, there could be disagreement that a vacation home you owned before the marriage is separate property if your husband helped to renovate it. How do you classify jewelry that your mother left you in your will but you gave to your spouse? Generally, the longer the marriage and the more assets you have, the more these questions will arise.
How Does The Court Divide Property?
In a divorce, the court will divide property with the equitable distribution principle, the law in Illinois. However, equitable division does not always mean equal division. There are several ways that the court will decide what is equitable for the divorce:
- The asset source: Some types of assets, such as lawsuit settlements and inheritances, could affect how much each spouse receives in the divorce.
- Length of the marriage: Couples who were married longer usually have finances that are more intertwined and dependent on each other.
- The physical and mental health of each party: These factors could suggest a need for a larger amount of the estate compared to the other.
- Job possibilities and work history: The court will consider how easy it is for each side to keep their quality of life while they train to get a job, for instance.
- Liquidity and type of assets: Some assets, such as the residential home, cannot be easily divided.
- Each party’s debts and financial needs
- Each party’s obligations from a previous marriage
As with most areas of divorce, the court can consider anything it believes is relevant when deciding how to divide property. This can lead to property being divided in various ways that can be difficult for non-attorneys to understand. But your attorney will guide the property division process and fight for the most equitable share.
How Assets And Debts Are Divided In An Illinois Divorce
After the judge decides what is marital and separate property, the court will assign a monetary amount to each item. Determining what each item is worth can help to decide if the property division is equitable and fair.
For example, the spouse who has more money and success in their career could have to take on most marital debt after the divorce. The spouse who earned less could receive more assets. Your attorney can recommend a professional appraiser if you need help determining what assets are worth. Some assets, such as retirement accounts, can be hard to evaluate and could require the help of a financial professional or CPA.
It is usually best for couples to divide their debts and assets without the court’s involvement. Whether that is possible depends on how well you get along with your spouse. The judge will review any proposed settlement and must sign off before the final divorce. The court will not approve an unfair settlement to either side.
Mediation is a good option if you have trouble reaching a property division agreement with your spouse. A mediator is a neutral third party who can help you reach a non-binding agreement over property division. If successful, mediation can help you avoid expensive and upsetting court cases. When the primary disagreements are over money and property, it helps to select a mediator with a financial background, such as a financial analyst.
Who Will Get The House?
There is no rule for who gets the primary residence in an Illinois divorce. If the couple cannot afford to keep the house, the judge will order that the house be sold as soon as possible. When it sells, the proceeds can be divided according to equitable division principles.
In other cases, the judge might award the home to the parent with primary custody of the children. This is often done so the kids are kept in the home after the divorce. But just because the other party got the house does not mean you do not get anything. If your ex gets the house, the judge will usually award you something of value instead.
Dividing Marital Property Involves Compromise
No matter how equitable division is decided in your divorce, one or both parties may be dissatisfied with how property is divided. Remember, dividing marital property is often complicated and involves compromise. Few spouses get all they want; the process usually means each party giving up something to get something else.
To get the best outcome for your situation, it helps to decide which assets and property are most important to you. Do you have a large retirement account you want to keep for a secure future? Does your spouse value keeping the home more than you do? By understanding what your priorities are, you can come to a more straightforward property division resolution.
Do Not Overlook Marital Assets
It is essential to bring in an experienced divorce attorney early in the process to clarify all marital assets. When the divorce is final, the last thing either side wants is to discover you and your ex still own a property together. This can lead to a serious, expensive problem and should be avoided. It pays dividends to take plenty of time to identify every marital asset at the beginning of the divorce process. Doing this work early in the divorce process will ensure you do not encounter unpleasant surprises later.
Contact Our Schaumburg Property Division Lawyer Today
Property division is often one of the most challenging parts of a divorce. If you are going through a divorce and are concerned about keeping a fair share of marital assets, you need a strong, experienced legal advocate fighting for you. The last thing you want is not to get your fair share of the marital assets. Our Schaumburg property division lawyer at Law Office of Fedor Kozlov is highly experienced with property division issues in divorce, so call (847) 241-1299 to set up a consultation.