Divorce and Property Improvements in Illinois

Illinois is an equitable distribution state. This means that courts divide the marital property in a way that is deemed to be fair for both parties. These rules are different from community property rules, in which property of the marriage is divided between divorcing spouses in an even 50/50 split.

In order to achieve a fair distribution, an Illinois court will consider several factors to determine whether property is classified as marital property or the separate property of one of the spouses. Separate property is distributed to its owner upon divorce, whereas marital property is distributed as indicated by an analysis of specified factors.

The first step in dividing property during a divorce is determining whether property is marital or separate. Many couples involved in a divorce may assume that anything acquired during marriage is considered marital property, whether that is income earned, a car purchased during the marriage, a house or personal property. Whether property is or is not marital property depends on a number of considerations.

Non-marital property is property that has been acquired as follows:

• Property Acquired Before Marriage: Property that was acquired before the marriage and continues to remain in the original owner’s name during the marriage is non-marital property. This means that if one of the spouses bought a house or a car before their marriage, and it continues to be in their name, it is not marital.
  • If, however, the spouse later refinanced the purchase loan for the property to include the spouse, or retitled the asset to include their spouse on the new title, it has become marital property;
• Gifts: A gift remains non-marital property, even when given by one spouse to another. This can become a point of serious debate during divorce negotiations, with both sides arguing that an item was a gift, whether true or not;
• Inheritance Before and During the Marriage: If one spouse inherits a sum of money from a deceased relative and keeps that money in a separate checking account, it should legally be non-marital property at the time of a divorce. However, if that money is placed into a jointly held checking account it would probably automatically become marital property and subject to property division as marital property in a divorce.

Generally, the more assets that a divorcing couple has, especially if one or both parties owned a business or had high incomes, the more complex and time-consuming division of property can become.

Rather than making an automatic 50/50 split, an Illinois judge considers all relevant factors in deciding what kind of property division is fair, including the following:

• The effect of any prenuptial agreement;
• The length of the marriage;
• The age, health and station in life of each spouse;
• Whether a spouse is receiving spousal maintenance, i.e. alimony or spousal support;
• The occupation of each spouse, as well as their vocational skills, and employability;
• The value of property that is distributed to each spouse;
• Each spouse’s debts and financial needs;
• Each spouse’s opportunity for future acquisition of assets and income;
• Either spouse’s obligations from a prior marriage, such the obligation to pay continuing child support for children of a prior marriage;
• Contributions to the purchase, maintenance, or increased value of marital property, including contributions made by one spouse acting as a homemaker;
• Contributions to any decrease in the value of property, whether marital or separate, or whether one spouse wasted marital or separate property;
• The economic circumstances of each spouse;
• The arrangements for any children of the marriage and whether one of the parents is going to have sole custody;
• Whether the family home should be awarded to one spouse to live in for a reasonable period of time, or to the spouse who is to have either sole physical custody of children or physical custody for a majority of the time; and
• The potential tax consequences of the property division.

Who Gets the Marital Residence in a Divorce in Illinois?

There is no hard and fast rule that determines which spouse gets the house in a divorce in Illinois. In cases where a couple cannot afford to keep the marital home, usually because neither spouse could afford to pay the mortgage on their own salary, a judge orders the house to be listed and sold before the divorce can become final. The divorcing couple then divides the proceeds from the sale.

In other situations, such as to keep the children of the marriage in a stable home environment, a judge may award the home to the same parent who is awarded custody of the child or children. This should not be taken to mean that the noncustodial parent gets nothing. If the home is marital property in which the spouses have equal interests and one is awarded the marital home, a judge will typically award a buyout of the other spouse’s share of the equity in the marital home.

Are Home Improvements Considered Separate or Marital Property in Illinois?

Improvements to a home can present difficult issues in a divorce setting, mostly if the home is not marital property. Home improvements are usually permanently integrated into the property, such as newly installed windows or the addition of a room. Therefore, they cannot be physically distributed. If they are determined to be separate property, they may have to be reimbursed according to the cost or the relative increase in property value.

Illinois divorce law provides for the reimbursement of personal contributions by one spouse to separate property owned by the other spouse. When one spouse makes a contribution to the separate property of the other spouse, they are entitled to be reimbursed, provided that:

• The contribution results in a substantial appreciation in value of the separate property. It is not something insignificant, e.g. routine plumbing repairs;
• The contribution can be traced to its separate source by clear and convincing evidence, i.e., documents, receipts and the like;
• The marital estate has not already been reimbursed in some other way.

If the court determines that a home improvement should be reimbursed, it will deduct the reimbursements from the marital estate. If this is not possible, the court may choose to place a lien on the separate real property of the spouse who received the contribution.

What If Marital Funds Were Used to Improve the Property?

If marital funds were used to improve non-marital property, it could have the effect of converting the separate property into marital property. On the other hand, a court might also conclude that the spouse was making a gift to the other. In that case, the spouse who made the contribution might not be entitled to reimbursement.

The conclusion that the use of funds to improve non-marital property was a gift may be overcome through offering evidence to show that it was not, in fact, a gift. This evidence might be a writing or other documents showing that the contributing spouse expected to be reimbursed. Alternatively, reimbursement details can always be specified beforehand in a pre-nuptial or post-nuptial agreement.

Do I Need an Illinois Lawyer for an Issue Involving Property Improvements in a Divorce?

If you contributed to property improvements of your marital real property, you should consult an attorney. Home improvements are often extensive and may involve great expense of time and money. It is important to consult an Illinois divorce lawyer if you are faced with a dispute over property improvements. A seasoned divorce attorney will be able to determine your eligibility for reimbursement. Your attorney can help you pursue reimbursement if you are entitled to one.