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Marital Property vs. Non-Marital Property in Chicago Divorce

Helping Spouses Divide Different Types of Marital Property in a Chicago Divorce

In Chicago divorce cases, understanding the distinction between marital and non-marital property is extremely important for equitable distribution during the dissolution of a marriage. The state of Illinois follows the principle of equitable distribution, meaning that marital property is divided fairly but not necessarily equally between spouses.

If you’re going through a divorce in Chicago and are facing the complexities of marital property division, you can turn to the seasoned divorce lawyers at Nottage and Ward, LLP. With a legacy dating back to 1988, our firm excels in the negotiation and litigation of complex family law matters, including the equitable distribution of marital assets. We understand the intricate considerations involved in real property, personal property, financial assets, and business divisions. With our mastery of communication, persuasive tactics, and pre-trial strategy, you can count on Nottage and Ward, LLP to provide comprehensive and strategic representation during divorce proceedings.

Call us (312) 332-2915, and let’s set up a time to discuss your case. We’re here to help.

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Starting the Process of Property Division

The process of dividing marital property can be challenging on several levels. Marital property can be many different things, such as land, money, or debt. However, not all things acquired during marriage until the date of separation are considered marital or joint property.

During the divorce proceedings, a court will investigate the value of both spouses’ property. In the state of Illinois, courts will usually accept a “reasonable” property division if the parties agree to a decision, but a judge must make a judgment if the divorcing spouses cannot agree. The Illinois Circuit Court will divide the marital estate following a trial in a Judgment of Divorce.

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How Does Illinois Divide Property in Divorce?

In some states, marital property is known as community property, and a judge will divide it equally after divorce. This is not the case for Illinois, which has an equitable system of property division. Equitable does not mean equal or dividing property in half, but means dividing the couple’s assets in a way the court considers fair.

Illinois is also a dual-classification state. This means a court will separate marital property from individual (non-marital) property in its judgment without regard to marital conduct.

Under Illinois law, marital property encompasses assets acquired during the marriage, subject to equitable distribution. Separate property includes assets owned before marriage, inheritances, and gifts intended for one spouse. Clear identification is key to preventing disputes during divorce. Equitable distribution considers each spouse’s contributions and needs.

Properly identifying and valuing assets in Illinois divorces is vital for fair settlements and avoiding conflicts. It ensures equitable division, preventing disputes and lengthy litigation. Valuation expertise is often required for complex assets, such as businesses or investments. Understanding tax implications and the financial impact of asset division aids in making informed decisions. Overall, precise identification and valuation uphold the principles of fairness and justice in Illinois divorce proceedings.

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Types of Marital Property

Marital property includes a range of assets acquired during the marriage, subject to equitable distribution. Each of the following categories presents unique challenges and considerations during divorce proceedings:

  • Real property: Real property, including the family home, vacation homes, and investment properties, is considered marital if acquired during the marriage. Determining the fair division of real estate can involve complex considerations, such as the family’s needs and the property’s financial value.
  • Personal property: Items like vehicles, furniture, and personal belongings acquired during the marriage are typically considered marital property. The challenge lies in assessing the value of such items and reaching an agreement on their distribution.
  • Financial assets: Bank accounts, investment portfolios, and retirement accounts accumulated during the marriage fall under marital property. Valuing and dividing these assets require careful consideration of their current and future worth.
  • Businesses and professional practices: Ownership stakes in businesses and professional practices established during the marriage are subject to division. Evaluating the value of these assets, including their earning potential, is vital for an equitable distribution.

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What the Court Considers

A judge will look at when the couple’s property was acquired, how the property was acquired, and if the property has appreciated or depreciated in value during the marriage. For example, a house acquired before marriage by one person is that person’s non-marital property and stays non-marital property unless the owner chooses to place the other spouse’s name on the property title or uses the other spouse’s funds for house upkeep.

Property is also considered non-marital property if it was given as a gift or inherited by one spouse only. This is the case if the individual who inherited the property does not place the other spouse’s name on the title or use common funds to maintain the house. In awarding a family home, the judge will consider who has the ownership right to live in the home.

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Complex/High-Asset Asset Division

High-asset divorce often involves complex and extensive financial portfolios. Addressing unique challenges requires specialized knowledge, especially when dealing with substantial investments, real estate holdings, or complex business structures.

Valuing businesses, professional practices, and intellectual property plays a major role in asset division. Expert appraisers may be needed to determine the fair market value of these assets, ensuring an equitable distribution.

Implementing effective strategies is essential for protecting and maximizing financial interests. This may involve negotiation, proper documentation, and considering tax implications to secure the most favorable outcomes.

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Debt Allocation

Debt accumulated during the marriage is also subject to division. Understanding the nature and extent of debts is vital to achieving equitable distribution, as it impacts the overall financial picture of each spouse. Marital debts include financial obligations incurred during a marriage. Examples of marital debts can vary but often include:

  • Credit card balances: Debt accrued on joint credit cards or those used for family expenses during the marriage.
  • Mortgages: Loans taken out to finance the family home or other properties owned jointly by the spouses
  • Auto loans: Debts associated with financing vehicles purchased during the marriage
  • Personal loans: Any loans taken out for joint purposes, such as home improvements or education expenses
  • Medical bills: Unpaid medical expenses incurred by either spouse during the marriage
  • Student loans: Educational loans taken out for the benefit of either spouse during the marriage
  • Tax debts: Unpaid taxes owed jointly by the spouses, such as income taxes
  • Home equity loans: Loans secured by the equity in the family home, often used for major expenses
  • Business debts: Debts related to jointly owned businesses or professional practices

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Negotiation and Settlement

Negotiation plays a pivotal role in property division. An experienced divorce lawyer with keen negotiation skills can lead to mutually agreeable settlements, avoiding protracted court battles and reducing emotional stress.

Reaching a settlement has numerous advantages, including cost savings, quicker resolution, and greater control over the outcome. It allows spouses to actively participate in decision-making rather than relying on a court judgment.

Mediation and collaborative divorce processes offer alternative dispute-resolution methods. These options emphasize open communication, cooperation, and finding amicable solutions, as well as fostering a more positive post-divorce relationship.

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Additional Considerations

While the timing of property acquisition is important, there are other considerations. The contributions of each spouse toward property acquisition and the caretaking of the property, including contributions of either spouse as a homemaker, are essential to property division.

The judge will consider the duration of the marriage, as well as each spouse’s age, health, occupation, ability for employment, ability to acquire vocational skills, and possible sources of income. The judge will also consider any obligations resulting from a prior marriage. An example of this would be a spouse who has child support to pay from a previous relationship.

While property division in divorce is a state matter in Illinois, there may be federal tax consequences of the property division. After divorce, spouses may have equal tax burdens but unequal means to pay the taxes owed.

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Facing Divorce in Chicago? Contact Nottage and Ward, LLP

If you are looking at a divorce and worried about the outcome, don’t hesitate to seek assistance from the experienced Chicago divorce attorneys at Nottage and Ward, LLP. We’re here to guide you through any trials and tribulations so that you can face your new future with confidence.

For a comprehensive consultation, give us a call at (312) 332-2915 today.

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