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How is Property Divided in Divorce? FAQ

You ask: “How is property divided in an Illinois divorce?” If you are interested in an uncontested divorce in Illinois, maybe you wonder about how property is divided in a divorce in Illinois. In an Illinois divorce, the division of property can include dividing bank accounts, retirement accounts, business, real estate, and other assets.

In an uncontested divorce in Illinois, the spouses have the freedom (for the most part) to divide the assets how they see fit.  However, though divorcing people do have a lot of freedom to divide assets how they see fit, their decisions are often guided by a statutes and the  parameters suggested by how a judge might decide a case if it went to trial.

Do we have to agree on every financial issue?

Many people who want an uncontested divorce in Illinois want to know if they can get divorced by only agreeing to some of the financial aspects of a divorce.

For the most part, you must agree on every financial aspect of your divorce to get a judge to finalize the divorce with a judgment for dissolution of marriage.

Why does a judge try to force agreement on all financial aspects of a divorce?

They don’t want people to come back into court later to fight about remaining issues. Court’s are very business. So when a judge grants a dissolution of marriage (divorce) the want it to be the last time you are in court for your Illinois divorce.

As a divorce lawyer in Illinois, one thing I do is to help people generate creative ideas for dividing assets. For example, there are sometimes creative ways that real estate an retirement accounts can be divided to achieve certain goals for the division of assets.

You might like to see my article “How long does it take to get divorced in Illinois?

What if we don’t have any property together?

If I had to pick out one thing that people say to me that is almost always wrong, it’s when a client who wants a divorce tells me “We don’t have any property together.” Unfortunately, that statement is wrong every time because people are not familiar with what it means to have property together in the context of an Illinois divorce.

Truth be told, it is pretty much impossible NOT to have property together. That’s because of the definition of “marital property.” Marital property is that property which married people “have together,” you might say. Check out these simplified definitions of what is marital and non-marital property.

  • Marital property: Marital property is that which is technically owned by both spouses. Marital property is divided in a divorce (non-marital property is not). Generally, all property acquired by either spouse during the marriage is marital property and is subject to equitable division upon dissolution of marriage. It doesn’t really matter who the property is titled to – like when car is titled to one person and not the other – if the property is acquired during the marriage. Here are some things that are often marital property even though people think it is separate property:
    • A bank account titled in one person’s name, acquired during the marriage
    • A car in only one person’s name, acquired during the marriage
    • Any portion of a 401k or pension that was acquired during the marriage
  • Non-Marital property: Non-marital property is the property is not marital property. Generally, non-marital property includes:
    • Property acquired by gift, legacy or descent;
    • Property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, legacy or descent;
    • Property acquired by a spouse after a judgment of legal separation;
    • Property excluded by valid 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 increase in value of property acquired by a method listed above;
    • Income from the property acquired by a method listed above, if the income is not attributable to the personal effort of a spouse.

Do I get to keep my retirement?

I’m not quite sure why, but often people will understand the concepts of marital and non-marital property, but believe that those concepts don’t apply to retirement accounts such as 401ks and pensions.

However, just like other assets, the concepts of marital and non-marital property do apply – it’s just a bit different.

Many assets are either marital or non-marital. And in fact, if a non-marital asset has enough marital money put into it, it can be transmuted into a marital asset (and therefore subject to division upon divorce).

However, retirement assets are a bit different in that on single retirement account can be part marital, and part non-marital. In fact, that’s fairly common.

For example,  suppose a spouse has a 401k started before the marriage, gets married, and then continues to contribute to the 401k. To get even more specific, suppose before the marriage there was $20,000 in the 401k, then twenty years into the marriage the balance reached $120,000. In the case of most assets where so much non-marital money was pumped in, that asset – that started as non-marital – would probably be transmuted into a marital asset. However, a single retirement account can be part marital, and part non-marital.

How are retirement accounts divided?

Some retirement accounts, such as IRA, can be split rather simply without tax consequences or penalties.

However, for other retirement accounts, such as 401ks and pensions, a special court order is needed to handle the division without undue tax consequences and penalties. The special order is called a qualified domestic relations orders, or QDRO (pronounced KWAH-dro).

I also wrote this article about splitting retirement accounts in divorce.

Do I get more property if I was cheated on?

You might have seen divorce court TV shows and people ranting on and on about how they were wronged by a cheating scoundrel. But in the real world, judges don’t want to hear about that stuff.

So is there any context in which cheating matters in a divorce in Illinois? Yes, and it’s called “dissipation.”

Dissipation occurs when, during and after the “breakdown” of the parties’ marriage, one spouse spends money for purposes other than marital purposes.

What is a marital purpose?

I think examples might be in order.

  • Marital purpose: Spouse spent on everyday living expenses just like during the marriage. Not dissipation.
  • Non-marital purpose: Spouse took an extra-marital to Tiffany’s to bought jewelry. Almost certainly dissipation.

It get’s a bit more complicated than that, but I think you get the idea.

Who gets the house?

As with other assets, who gets the house in an uncontested divorce depends upon what the spouses agree to.

T’he basic options of what to do with the house are as follows:

  1. Sell the house: Proceeds to be split as spouses agree
  2. One party keeps it: The person who keeps the house can buy out the other
  3. Foreclosure: It’s not uncommon for a house to be in foreclosure in a divorce. The spouses might agree they should let the house go, but there are still issues to discuss – like what to do about a possible deficiency judgement which could leave the spouses owing money even after foreclosure.

I like to use creative ideas to help people figure out what to do with the house in an uncontested divorce in Illinois.