Pursuant to the Illinois Marriage and Dissolution of Marriage Act, marital property is defined as “all property, including debts and other obligations, acquired by either spouse subsequent to the marriage, except the following, which is known as non-marital property . . . .” The statute then lists all items that are considered non-marital property. In January 2016, the State of Illinois amended the definition of non-marital property to include the following items of property: (1) property acquired by gift, legacy, or descent or property acquired in exchange for such property; (2) property acquired in exchange for property acquired before the marriage; (3) property acquired by a spouse after a judgment of legal separation; (4) property excluded by valid agreement of the parties, including a premarital agreement or a postnuptial agreement; (5) any judgment or property obtained by judgment awarded to a spouse from the other spouse except, however, when a spouse is required to sue the other spouse in order to obtain insurance coverage or otherwise recover from a third party and the recovery is directly related to amounts advanced by the marital estate, the judgment shall be considered marital property; (6) property acquired before the marriage, except as it relates to retirement plans that may have both marital and non-marital characteristics; (6.5) all property acquired by a spouse by the sole use of non-marital property as collateral for a loan that then is used to acquire property during the marriage; to the extent that the marital estate repays any portion of the loan, it shall be considered a contribution from the marital estate to the non-marital estate subject to reimbursement; (7) the increase in value of non-marital property, irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effort of a spouse, or otherwise, subject to the right of reimbursement provided in subsection (c) of this Section; and (8) 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 list of items that are considered non-marital property is not much different than the list that existed prior to January 2016. In fact, the items are relatively the same, aside from some additional language set forth in the January 2016 amendments. The pre-amended statute listed the following items as non-marital property: (1) property acquired by gift, legacy or descent; (2) property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, legacy or descent; (3) property acquired by a spouse after a judgment of legal separation; (4) property excluded by valid agreement of the parties; (5) any judgment or property obtained by judgment awarded to a spouse from the other spouse; (6) property acquired before the marriage; (7) the increase in value of property acquired by a method listed in paragraphs (1) through (6) of this subsection, irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effort of a spouse, or otherwise, subject to the right of reimbursement provided in subsection (c) of this Section; and (8) 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.
Although the January 2016 amended non-marital items are not much different than the pre-amended non-marital items, the January 2016 amendments includes a very important provision that is absent from the prior statute. The January 2016 amendments specifically states “[p]roperty acquired prior to a marriage that would otherwise be non-marital property shall not be deemed to be marital property solely because the property was acquired in contemplation of marriage.” This seems to be in line with both the pre-amended and post-amended list of non-marital property, so why is this important? This added provision is very important because, prior to the January 2016 amendments, case law indicated that real estate purchased prior to the actual marriage but in contemplation of marriage was considered marital property. This case law ensured that a party could not purchase the parties' marital home shortly before the marriage in contemplation of marriage, have the parties live in that home as their marital home throughout the marriage, and then subsequently claim the marital home to be that party's sole, non-marital property during divorce. However, the January 2016 amendments make it very clear that any item of property acquired prior to the marriage, including real estate purchased in contemplation of marriage, is considered the non-marital property of the person who purchased it. For example, under the current statute, a party could purchase a home for both parties to live in one day prior to the marriage, and this would be considered that party's non-marital property even if the parties reside in the home throughout their entire marriage. Thus, the amended statute overturns the prior case law which stated otherwise.
Although the above example seems unfair, it is important to know that is currently where the law stands, unless the parties can agree otherwise. A party can protect his or herself against this inequitable result prior to the marriage by negotiating a pre-nuptial agreement which effectively undoes the inequities of the law by agreement. A party can also ensure that his or her name is on the title of the home so that it is owned jointly by the parties and will need to be divided between them as joint owners of the house. However, if you are already married, going through a divorce, and your name is not on the house purchased prior to the marriage, the only way to avoid this law is to attempt to have your spouse agree otherwise. Even if your spouse doesn't agree, there are ways for you to be reimbursed any funds or efforts you made to improve the non-marital home. These laws can be somewhat convoluted so, if you are about to get married and feel there is a problem with the home you are about to purchase and/or reside in with your partner, it is important you speak with an attorney right away in order to preserve your rights to same. Likewise, if you are going through a divorce and feel there may be an issue regarding the home you lived in throughout the marriage, you should also contact an attorney right away. Our attorneys are well-versed on prenuptial agreements as well as marital settlement agreements and thus, are highly qualified to deal with these and other property issues. Feel free to contact our office for your free consultation today!