What is Transmutation in a Divorce? 

 Posted on November 04, 2022 in Property Division

The division of marital assets and liabilities is often one of the most complicated and consequential aspects of the divorce process. Marital property is property and debts contained within the marital estate. Both spouses have a legal right to a share of marital property. Non-marital property is property and debts that are not part of the marital estate and are owned solely by one spouse. Non-marital property generally includes property that was acquired by either spouse before the marriage, inheritance or gifts received during the marriage, and property that is excluded by a valid prenuptial agreement. Transmutation of assets is the conversion of non-marital property to marital property or vice versa.

Commingling or Mixing of Property Can Lead to Transmutation

The transmutation of property generally occurs when one spouse commingles or mixes non-marital assets with marital assets. For example, if a wife deposits her separate funds into a joint account, these funds can be converted into marital funds.

In rare cases, it is also possible for marital property to be converted into non-marital property. Consider an example in which a man owns a home but is still making mortgage payments at the time of his marriage. He and his spouse move into the home together and use marital funds to pay the mortgage payment each month. However, the home remains titled in his name alone. Essentially, marital funds could be considered as being transmuted into the man's non-marital estate.

In some cases, a spouse may be able to seek reimbursement for allegedly transmuted property. A spouse may also be required to reimburse the marital estate for certain funds or property. Reimbursement is possible when there is clear and convincing evidence of the origin and nature of the property.

Preventing Transmutation of Assets

A prenuptial or postnuptial agreement can prevent the transmutation of property. These agreements allow spouses to designate which assets are marital and which are non-marital. Prenuptial agreements are useful for protecting property acquired before marriage.

For people who are already married, postnuptial agreements can be used for the same purpose. Postnuptial agreements can also be used to address financial issues that may arise during the marriage, such as one spouse taking on a large amount of debt.

Couples who are going through a divorce can also take steps to prevent the transmutation of property. It is important to keep good records and receipts documenting the ownership of each spouse's separate property. This will help to ensure that each spouse receives their fair share of the marital estate.

Contact a Kane County Divorce Lawyer

The St. Charles divorce attorneys at Goostree Law Group are equipped to help you navigate even the most complicated property division issues during divorce. We understand the challenges you are facing and will work tirelessly to protect your interests. To schedule a free consultation, call us today at 630-584-4800.

Source:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm