Preventing Disputes When Dividing Property

 Posted on April 17,2014 in Divorce

One of the hardest parts of divorce is finding a fair way to divide assets that have been shared and intertwined over the years. Many assume that when couples get divorced, property is simply divided 50/50. But now most states, including Illinois, use a process called equitable distribution, where a number of factors are considered when dividing assets.

If one spouse has significantly higher earning potential or significantly worse health than the other spouse, property might be divided to support the spouse with more needs. There are a number of other factors considered in equitable distribution, but first the court must classify all of the property to be considered, as either marital property or non-marital property.

Marital vs. Non-marital Property Non-marital property is easier to determine. Under Illinois law, it consists of property acquired by one spouse before a marriage, or property acquired after a legal separation. Also included are gifts intended for only one spouse, inheritance of one spouse, or items or other property that was purchased with any of the above funds. Marital property sounds simple; it basically consists of all the property acquired by either spouse during the marriage… with the above non-marital property exceptions. However, also included in marital property may be property that was originally non-marital property, but that was at some point contributed to the marital residence or a co-owned business. It can also include the time and labor (sweat equity) that was put into a residence or business. This transmutation of non-marital to marital property is called commingling.

Preventing Costly Disputes

If one of your goals is to protect your personal assets from your spouse and your spouse’s family in the case of a divorce, then you need to make a plan for that scenario. People buy insurance not because they plan to have an accident but because they believe there is a chance they will have an accident and they want to protect their assets. It is good planning. Just as people plan for the chance of an accident they can plan for the possibility of divorce by considering a prenuptial agreement, and by keeping good financial records.

• Prenup: A prenup is a written agreement signed by both parties before the marriage. Like any contract it cannot be the result of duress or undue influence, or else it will be voided by the court. Prenups may not sound romantic but in many situations they are just as advisable as basic marriage counseling. They can prevent costly property entanglements and clear the air before proceeding in marriage.
• Keeping records: Postnuptial agreements can be entered into between spouses as well, though these are often looked upon skeptically by courts and have limited effect. Rather, when assets are commingled in a marriage it is best to keep concise records so that it is clear the contribution was not intended as a gift, and so that the contribution can be clearly traced back to its original status as non-marital property.

 The family law attorneys at Goostree Law Group are experienced resolving disputes in Illinois courts and in advising clients on these often contentious matters. Contact our office to discuss how to prevent or handle a property dispute when separating from a spouse.