When Non-Marital Property Becomes Marital Property
When a married couple decides to divorce, it may come as a shock to one spouse when the court rules his or her non-marital property has actually been converted to marital property, and it is therefore subject to equitable division. In fact, the transmutation of non-marital assets into martial assets can happen by accident by either party.
The Illinois Marriage and Dissolution of Marriage Act (IMDMA) identifies non-marital property as the following:
- Property acquired by gift, legacy or descent;
- Property acquired in exchange for other non-marital property;
- Property acquired by a spouse after a judgment of legal separation;
- Property both spouses agree is non-marital property;
- Property acquired through a judgment awarded to a spouse from the other spouse;
- Property acquired before the marriage; and
- Any increase in value of non-marital property.
Notwithstanding the definition of marital property as any property acquired by the couple after they are legally married, and the clear listing of what constitutes non-marital property, there are cases where property cannot be easily distinguished as either marital or non-marital.
Under section 5/503(c)(1) of the IMDMA, when non-marital property is comingled with marital property in such a way that there is a loss of identity of the contributed property, the resulting property becomes marital property. However, the characterization of this transmuted property as marital property is a presumption and it can be overcome by clear and convincing evidence by a spouse claiming it is non-marital property.
For example, if a couple builds a marital home on one spouse's land (that was acquired prior to the marriage), and they use both marital and non-marital funds, this could transform the resulting home and land combination into marital property. Therefore, in the event of a divorce, both spouses would be entitled to an equitable marital share in the home and the land.
In order to avoid an outcome like this, a couple can agree in writing that no matter what contributions are made, a property will remain non-marital. If any marital assets are used, or if the other spouse's non-marital property is used, the parties can determine how compensation may be given for that property. To ensure that any such agreement is later valid in court, both spouses should consult with an attorney before agreeing to the terms.
Contact an Illinois Family Law Attorney
If you are going through a divorce, and are worried that your non-marital property may be later deemed marital property, please contact a knowledgeable Illinois family law attorney for a consultation. The attorneys at MKFM Law can help you keep your non-marital assets. Call 630-665-7300 today.