When Non-Marital Assets Become Part of the Marital Estate

 Posted on July 24,2017 in Division of Assets

Most of the time, when a spouse brings property into a marriage, it will remain non-marital property, especially if the title is in his or her name only. However, there are occasions when such assets will become marital property—usually because the chain of ownership becomes muddled either accidentally or deliberately. It is always a good idea to be aware of these considerations in divorce law, lest you lose an asset that you wish to retain.

How Is Property Classified?

Dividing property can be very easy, or it can be so complex that expert opinions may be required. If you bring very little property into your marriage, there will be very little individual, or non-marital, property that is exempt from asset division. Conversely, if you have been married previously, or have significant assets otherwise, you may have substantial non-marital assets that you wish to keep separate from the estate of your current marriage.

Illinois law generally holds that it is not who holds the title that determines whose property it is; rather, the primary concerns are when and how the property was acquired. The way the law is currently worded, any property acquired by either spouse “subsequent to the marriage” is marital property, with the exceptions to that rule laid out in the law itself.  Some of the more common examples of exceptions are gifts from one spouse to the other—such items are typically non-marital because the intent is clear to make it so—and inheritances left to a particular spouse.

Commingling Assets

In some instances, non-marital property will affirmatively become marital property, as opposed to merely being designated as such. For example, Illinois law provides that each spouse’s normal paycheck is marital property. But, if one spouse has income from a venture they began before marriage, that income could be non-marital depending on how the income is actually generated—until it goes into a joint bank account. Non-marital funds in the same bank account as marital funds are usually become marital by a process called commingling of assets. There is no way to distinguish whose funds are whose in such a situation, so all of the money will be held to be marital property.

There are good reasons to commingle assets, most of which are tax related. However, if you do not intend to mix assets, you must document your transfers and keep records to preserve the non-marital nature of the asset in question. If you have records that can overcome the presumption that a transfer is marital property, and you do not put any money into the asset that may be marital in nature—for example, paying for repairs on your non-marital automobile out of your joint account—you should be able to keep that asset from becoming part of your property settlement.

Ask a Divorce Attorney

When divorce happens, the rules regarding who gets to keep what can become quite complex and intimidating. An experienced DuPage County divorce attorney can help you navigate the process. Contact our office for a free consultation by calling 630-871-1002 today.

Source:

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