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Illinois Property Division
Property Distribution Laws in Illinois

In Illinois, the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the Circuit Court divides the marital estate within the Judgment of Divorce. The court will accept a property settlement agreement that the parties submit unless the court finds it to be unconscionable, according to Section 750 ILCS 5/502(a) of the Illinois Compiled Statutes.

Illinois is an equitable distribution state. Equitable does not mean equal, or even half, but rather what the Circuit Court considers fair. Illinois is a dual classification state. It separates marital property from separate property. The court divides the marital estate without regard to marital misconduct.

Factors in Equitable Distribution

According to 750 ICLS 5/503(d) of the Illinois Compiled Statutes, each spouses non-marital property is awarded to the spouse who owns it.

The division of marital property is done considering the following relevant factors:

  • the contribution of each party to the acquisition, preservation, or increase or decrease in value of the marital or non-marital property, including the contribution of a spouse as a homemaker or to the family unit;
  • the dissipation by each party of the marital or non-marital property;
  • the value of the property assigned to each spouse;
  • the duration of the marriage;
  • the relevant economic circumstances of each spouse when the division of property is to become effective, including the desirability of awarding the family home, or the right to live therein for reasonable periods, to the spouse having custody of the children;
  • any obligations and rights arising from a prior marriage of either party;
  • any antenuptial agreement of the parties;
  • the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties;
  • the custodial provisions for any children;
  • whether the apportionment is in lieu of or in addition to maintenance (alimony);
  • the reasonable opportunity of each spouse for future acquisition of capital assets and income; and
  • the tax consequences of the property division upon the respective economic considerations of the parties.

This information has been summarized from the Illinois statutes. The complete version of Illinois divorce statutes is online at Illinois Divorce Laws.

Marital Property vs. Separate Property

Regardless of title, all property acquired by either spouse during the marriage is presumed to be marital for purposes of distribution of property. Separate property, which is non-marital, includes: property acquired by gift, legacy, or descent; property acquired in exchange for property acquired before the marriage, or acquired by gift, legacy, or descent; property acquired by a spouse after a judgment of legal separation; property excluded by valid property settlement agreement of the parties; any judgment or property obtained by judgment awarded to a spouse from the other spouse; property acquired before the marriage. The appreciation of separate property is separate.

Valuing and Dividing Property

In dividing and distributing the marital estate, the court goes through a discovery process to classify property and debt as marital or separate. Then it assigns a monetary value on the marital property and debt. Last, it distributes the marital assets between the two parties in an equitable fashion.

The Marital Home

In Illinois, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) from are deducted the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

  • The spouses sell the home and divide the proceeds.
  • One of the parties may refinance the home and buy out the other party.
  • One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.

Pensions and Retirement Accounts

In Illinois, vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In Illinois, the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:

  • Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)s, 403(b)s and profit sharing plans fall into this category.
  • Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employees salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.

In Illinois, if spouses share in each others retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.

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