Non-Marital Property

Commingled Property & Contribution / Reimbursement Claims Under Illinois Law

Published on: March 6, 2023 | Kollias, P.C.

Perhaps no issue is the source of greater confusion among divorce lawyers than the issue of commingled property and contribution claims. That confusion is compounded by the fact that in practice, judges have differing opinions on when a contribution claim is appropriate and when it isn’t. Thus, outcomes vary greatly from one judge to another.

It may be helpful to start by defining what a contribution claim is not. It is not an assertion that an asset is the non-marital property of one spouse or the other. Rather, a contribution claim begins with the undisputed common understanding that marital property and non-marital property have been commingled together, and we need to figure out who is entitled to what.

Marital and non-marital property are defined by statute under 750 ILCS 5/503(a). A contribution claim is essentially a claim for reimbursement. The statute sets forth the rules as follows:

How Does Your Inheritance Affect Your Divorce Case?

Published on: March 19, 2020 | Kollias, P.C.

It is not uncommon for a spouse to have received an inheritance during the marriage. When people are divorcing, one of the biggest issues is how the court will divide their assets. The first step a court must take when determining how to divide assets in a divorce case is to classify those assets as either marital or non-marital. How would an Illinois court classify the inheritance? Is it marital or non-marital?

Pursuant to Section 503(a) of the Illinois Marriage and Dissolution of Marriage Act, all property acquired during the marriage is presumed to be marital property, except where that property is shown to be obtained by a certain method. Specifically, the statute lists “non-marital” property as “property acquired by gift, legacy or descent or property acquired in exchange for such property.” One party’s inheritance in a divorce case would typically fall under this category of non-marital property.

Can your spouse be required to pay your attorney fees under Illinois law?

Published on: November 14, 2016 | Kollias, P.C.

In Illinois, during a divorce, either party can ask the court to order the other party to pay some or all of his or her attorney fees while the case is pending. Section 501(c-1) of the Illinois Marriage and Dissolution of Marriage Act provides in pre-judgment (pre-decree) divorce cases, the court can assess attorney fees in favor of the petitioning party and against the other party. The purpose of these interim attorney fee awards is to “level the playing field” and allow an economically disadvantaged spouse to participate adequately in the litigation. See, Marriage of Rosenbaum-Golden. This may be necessary where one spouse uses his or her greater control of assets or income as a litigation tool, making it difficult for the disadvantaged spouse.

If the court decides that one party cannot pay his or her attorney fees but the other party can, it can order that the party able to contribute pay some attorney fees to the other party. However, if the court determines that both parties do not have sufficient financial ability or access to funds with which to pay, the court will allocate available funds for each party’s attorneys, including any retainers or interim payments previously paid.

How a Divorce May Affect Non-Marital Business Ownership Under Illinois Law

Published on: May 31, 2016 | Kollias, P.C.

One thing that occasionally complicates a divorce is when a spouse has an ownership interest in a non-marital business. Countless hours of hard work have gone into the business, there are stocks and ownership interests involved, or perhaps one spouse has control over the business and the other has none. There are several important situations to consider when you are going through a divorce and business ownership is involved. Some of these important implications are addressed below.

Contribution and Reimbursement

All property that is acquired by either spouse during a marriage is presumed to be marital property. This includes income generated during the marriage, even if the income is generated from working at a non-marital business. For example, if a husband is working at his non-marital business and paying himself a salary of $100,000 per year, his salary is marital property.

When a spouse contributes personal effort during a marriage to non-marital property, such as a non-marital business, the efforts may also be deemed a contribution from the marital estate to the non-marital property. The value of these efforts and contributions, if in the form of retained earnings or assets, can be subject to reimbursement to the marital estate, particularly if the contributing spouse has not been reasonably compensated. So, if your spouse is paying him or herself a $50,000 salary, but the reasonable salary for the work he or she does is $100,000, the marital estate has a reimbursement claim for the difference.

Finally, it is important to note that only the appreciation of non-marital property resulting from significant personal efforts of the spouse are subject to reimbursement to the marital estate. This means, for instance, that if one spouse has $100,000 in an investment account before the marriage, and at the time of divorce the account is worth $200,000 due solely to favorable market conditions, the marital estate is not entitled to $100,000 reimbursement even though the appreciation occurred during the marriage.

Non-Marital Property Under Illinois Law: How It Can Affect Maintenance and Property Division

Published on: July 12, 2015 | Kollias, P.C.

In a divorce, the Court has the obligation to equitably divide the marital assets and debts, and determine whether maintenance would be appropriate. While non-marital property is not subject to being divided in a divorce, it may have a profound impact on the appropriate division of the marital assets and debts. It may also be considered in determining how much maintenance should be paid.

Therefore, the first question is what is “marital property?”

Section 503(a) of the Illinois Marriage and Dissolution of Marriage Act defines marital property as all property acquired by either spouse subsequent to the marriage, except the following, which is known as non-marital property:

property acquired by gift or inheritance;
property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift or inheritance;
property acquired after a judgment of legal separation;
property exclude by valid agreement of the parties (e.g., pursuant to a prenuptial agreement);
any judgment or property obtained by judgment awarded to a spouse from the other spouse;
property acquired before the marriage;
the increase in value of property acquired by a method listed in paragraphs (1) through (6), irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effect of a spouse, or otherwise, subject to the right of reimbursement provided in subsection (c) of this Section; and
income from property acquired by a method listed in paragraphs (1) through (7) of this subsection if the income is not attributable to the personal effort of a spouse.

The law is clear: both inheritance and property acquired before marriage are non-marital. This means that the party who owns the non-marital property will be keep it in the divorce, and the other party will have no claim to it. In cases where one spouse has a sizeable amount of non-marital property this may seem unfair, particularly in the case of a long-term marriage. Also, unlike property, a spouse’s non-marital income may be considered when determining the maintenance award to the other spouse.