Illinois Divorce: Dividing Property

Learn which property gets divided in an Illinois divorce and how judges decide on a fair distribution of a couple’s assets and debts.

By , Retired Judge
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When we think of contentious issues in a divorce, the first things that usually come to mind are alimony or child custody. But couples can also clash on how to divide property, especially when it comes to issues like which spouse will get the marital home or even the family pet. If you're facing divorce or have already started the process, it's important to understand how Illinois's divorce laws address property distribution and the allocation of debts.

Is Illinois a Community Property State?

No, Illinois isn't a community property state. The principle of "equitable distribution" guides property division in Illinois divorces. Instead of dividing a couple's property equally, judges will divide their property and allocate their debts based on what's fair under the particular circumstances. "Fair" doesn't necessarily mean a 50-50 split.

Separate Property vs. Marital Property in Illinois

The first step in dividing assets and debts during a divorce is deciding whether property should be categorized as separate (nonmarital) or marital. Normally, each spouse will keep their own separate property, while their marital property will be distributed between them in the divorce.

What Counts as Separate Property in Illinois?

Under Illinois law, the following types of property are considered one spouse's separate property:

  • property a spouse acquired before the marriage or acquired in exchange for that property
  • property that a spouse inherited, received as a gift, or acquired in exchange for a gift or inheritance, regardless of when it was originally received
  • property a spouse acquired after the couple got a judgment of legal separation
  • property the couple agreed to exclude from their marital estate (as long as their agreement was valid)
  • property a spouse received as a result of a court judgment awarded from the other spouse (except in certain circumstances), and
  • income from any of these types of separate property or the increase in value of that property, as long as the income or appreciation isn't due to a spouse's personal efforts (for instance, the increased value of a spouse's home bought before the marriage would remain separate property if it was due solely to market conditions).

(750 Ill. Comp. Stat. §5/503(a) (2024).)

What Counts as Marital Property in Illinois?

Illinois law presumes that any property (including debts and other obligations) either spouse acquired during the marriage is marital property, including separate property that was transferred into some form of co-ownership between the spouses, regardless of how the title was held. In order to overcome this marital-property presumption, a spouse must prove by clear and convincing evidence that the property:

  • was acquired as separate property (as listed above)
  • was transferred for estate or tax planning purposes, or
  • was transferred for some other reason that shows the transfer wasn't intended to be a gift to the other spouse.

(750 Ill. Comp. Stat. §5/503(b)(1) (2024).)

Can Separate Property Ever Become Marital Property?

There are certain situations in which separate property can be converted to marital property. Sometimes this is intentional; sometimes it's not. For instance:

  • Transfers into co-ownership. As explained above, the marital-property presumption kicks in when a spouse transfers property into a form of co-ownership between the spouses (such as a joint tenancy, tenancy in common, or tenancy by the entirety), even if title is still in only one spouse's name.
  • Commingled property. Often, spouses commingle (or mix) separate and marital assets. A typical example is when one spouse had a bank account before the marriage, but both spouses later put money in the account and drew money out of it. Unless the funds that were in the account before the marriage were somehow segregated from money deposited during the marriage, the judge will probably presume that the entire account is marital property.
  • Contributions to the other spouse's separate property. If one spouse contributes separate property to the other spouse's separate property (such as by using an inheritance to pay for improvements on a home the other spouse owned before the marriage), the contributing spouse is entitled to be reimbursed for that contribution as long as it can be traced back and wasn't intended as a gift. But when a spouse contributes significant personal effort to the other spouse's separate property that increases the property's value (such as by working on extensive home renovations), that may be considered a contribution from the couple's community property rather than from separate property. So the judge may order a reimbursement out of the community estate, which will then be divided between the spouses.

(750 Ill. Comp. Stat. §5/503(c)(2) (2024).)

Are Retirement Accounts Counted as Marital Property in Illinois?

For purposes of dividing property in divorce, Illinois law presumes that a couple's retirement accounts (including pension plans, IRAs, and 401(k) accounts) are marital property as long as either spouse acquired or contributed to those accounts or participated in those plans during the marriage and before legal separation, divorce, or a judgment of invalidity (essentially the same thing as an annulment).

(750 Ill. Comp. Stat. §5/503(b)(2) (2024).)

Valuing Assets and Debts in an Illinois Divorce

After determining which assets and debts are subject to distribution, each has to be assigned a monetary value. The process works best when you and your spouse can agree on those values. Otherwise, it will cost you time and money (think legal fees) to fight out the valuation issue in court.

It's easy to place a value on some assets and debts, like bank accounts and credit card balances. Others may require expert help. For instance, if you own your home or other real estate, you'll need the services of a real estate appraiser. Also, it can be difficult to put a value on some types of retirement accounts, especially defined-benefit pensions and IRAs or 401(k) accounts that may be both marital and separate property (for instance, if a spouse started contributing to those accounts before marriage). You'll likely need the assistance of an actuary or pension valuation expert.

Normally, the couple's assets and debts will be valued as of the date of the divorce trial or another date that the spouses have agreed on. The judge may choose a different date, but that choice must be reasonable and consistent. For example, the judge may not choose different valuation dates for different assets. (750 Ill. Comp. Stat. §5/503(f) (2024); In re Marriage of Budorick, 178 N.E.3d 726 (Ill. Ct. App. 2020).)

How Do Judges Decide on an Equitable Distribution of Property?

After determining which property and debts are marital, the judge will have to decide how to distribute those assets and debts fairly between the spouses. When making that decision, judges must consider all of the relevant circumstances in the case, including:

  • how long the marriage lasted
  • the child custody arrangements
  • each spouse's economic circumstances after the divorce, including whether the custodial spouse will be awarded the family home or will have the right to live there for a period of time (more on that below)
  • each spouse's contribution to the acquisition, preservation, or change in value of the property, including one spouse's contribution as a homemaker
  • each spouse's potential to earn income and acquire assets in the future, in light of their age, health, occupation, vocational skills, and employability
  • each spouse's needs
  • whether the property division is in addition to or instead of a spousal maintenance (alimony) award
  • whether either spouse has wasted ("dissipated") marital property
  • the value of separate property that each spouse is keeping, as well as their liabilities
  • any previous agreements the couple had about their property
  • any obligations and rights arising from either spouse's previous marriage, and
  • the tax consequences of the property division for each spouse.

Illinois law specifically says that judges must divide the marital property "without regard to marital misconduct." But if one spouse claims the other has dissipated marital assets, that could open the door to evidence related to misconduct. For example, if one spouse spent a lot of the couple's money on an extramarital affair (such as for lavish gifts or trips with a lover), the judge might decide that it would be fair to award the other spouse a larger share of the remaining assets.

(750 Ill. Comp. Stat. §5/503(d) (2024).)

Who Gets the House in an Illinois Divorce?

Nothing in Illinois law says which spouse should get the couple's house in a divorce. However, the scales might be tipped toward the parent with primary custody of a young child or children. That's because the "desirability" of awarding the home to that parent is one of the factors judges will consider in the property division (as listed above).

This doesn't mean the noncustodial parent gets nothing in return. When one spouse is awarded the marital home, the other spouse will typically receive a larger share of the couple's other assets (such as retirement accounts) so that the overall property division is fair.

Of course, not all couples have enough other assets to balance things out or pay for a house buyout. So a divorcing couple might have to sell the house (and divide the proceeds) or continue to co-own the home for a period of time—for instance, to allow their young kids to stay there with the custodial parent or to try a less conventional birdnesting arrangement (with the kids staying in the home and the parents rotating in and out).

Who Gets the Family Dog or Cat in an Illinois Divorce?

Illinois was at the forefront of a movement in state laws to treat pets differently than other types of property in divorce. (Yes, the law considers pets to be property.) If a judge finds that a couple's pet is marital property, Illinois law requires the judge to consider the animal's well-being when awarding sole or joint ownership to one or both spouses and deciding who will be responsible for the pet.

Also, any couples who want to take advantage of the streamlined divorce procedure in Illinois known as "joint simplified dissolution" must have a written agreement spelling out how they'll handle ownership of and responsibility for their pets.

Be aware that these laws don't apply to service animals.

(750 Ill. Comp. Stat. § 5/503(n) (2024).)

Can Couples Agree on How to Divide Their Property in Divorce?

The easiest way to prevent future disputes about property is to have a written agreement ahead of time. A prenuptial agreement can list the property and debts each spouse is bringing into the marriage, as well as set out how they'll handle property and debt that they acquire or dispose of during the marriage.

But if you don't have a prenuptial agreement, that doesn't mean you can't agree on how to divide your property when you're about to divorce or during the divorce process. If you're able to do that, you'll need to submit your agreement to the court. But the judge will approve your property agreement and make it part of the divorce judgment unless it's unconscionable, meaning that it's patently unfair under the specific circumstances. (750 Ill. Comp. Stat. § 5/502 (2024).)

Getting Help With Property Distribution

If you're having trouble reaching an agreement with your spouse about dividing your property and debts (or any other issues), divorce mediation could help. When the primary disputes in your divorce are over property, it could make sense to choose a mediator with financial expertise (such as a certified divorce financial analyst).

But you should consider speaking with a family law attorney if mediation doesn't work or isn't appropriate in your situation—such as when there's a serious imbalance of power between you and your spouse, or when you believe your spouse is hiding income or other assets. In addition to representing your interests in court and spearheading settlement negotations during the divorce, a knowledgeable family lawyer should be able to help you find any financial experts that you may need to value your property or find hidden assets

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