They say the two best days in a boater’s life are the day they buy the boat and the day they sell it. Perhaps the same may be said of a marriage.
Boats are a curious asset in an Illinois divorce because they are an extravagance. While a boat has value (if the boat is paid off), a boat requires expensive maintenance throughout the year. Furthermore, boats are often entertainment associated with new paramours. Additionally, the extreme expense of a boat means that the sale of the boat modifies both parties’ financial capacity and needs.
Who Gets The Boat After An Illinois Divorce?
A boat is an asset. If the asset was purchased during the marriage, it is presumed marital and, thus, the boat can be allocated to either party in an Illinois divorce. Or, the boat’s value can be divided between the two parties in an Illinois divorce.
Parties to an Illinois divorce can agree amongst themselves as to who gets the boat and what value the other party should receive in order to offset their marital portion of the boat.
If the parties to an Illinois divorce cannot agree, the parties must turn to the courts to allocate the boat and its value.
“For purposes of distribution of property, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage is presumed marital property.” 750 ILCS 5/503(b)
Illinois divorce courts “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors” 750 ILCS 5/503(d)
The statutory factors which would be specific to allocation of a boat in an Illinois divorce are as follows.
“[E]ach party’s contribution to the acquisition, preservation, or increase or decrease in value of the marital or non-marital property” 750 ILCS 5/503(d)(1)
A boat requires maintenance and storage. The party who has maintained and stored the boat throughout the course of a marriage is more likely to be awarded the boat for the purely practical reason that they know how to keep the boat.
“[T]he relevant economic circumstances of each spouse when the division of property is to become effective”750 ILCS 5/503(d)(5)
Boats are expensive to maintain. Whoever can afford the docking fees, cleaning fees, licenses and gas will likely be awarded the boat.
Even if a boat is awarded to one spouse alone, a portion of the value of the boat can be allocated to the other spouse for the purposes. Illinois divorce courts allocate assets based on “the value of the property assigned to each spouse” 750 ILCS 5/503(d)(3)
Those values will be awarded in “just proportions“ 750 ILCS 5/503(d)
“Just proportions does not mean strict equality but only an equitable division.” In re Marriage of Albrecht, 266 Ill. App. 3d 399, 402 (Ill. App. Ct. 1994)
Equitable division does not mean a 50/50 split. It can be any split of value that a court deems fair. Obviously, the further that split is from 50/50, the less fair the division and thus less likely.
“[E]quitable division depends on more than merely an analysis of dollars and cents.” In re Marriage of Abu-Hashim, 2014 IL App (1st) 122997, ¶ 22, 14 N.E.3d 524.
Debts associated with a boat will typically be allocated to whomever keeps the boat.
If the boat is a post-separation present to oneself, expect the debt to be allocated to the boat purchaser.
In one appellate case “[t]he court refused to consider as marital debt…a purchase money mortgage on a racing boat ($70,000). The court found that the husband incurred these debts in contemplation of divorce and in dissipation of the marital estate” In re Marriage of Block, 441 NE 2d 1283 – Ill: Appellate Court, 2nd Dist. 1982
How Do You Value A Boat In An Illinois Divorce?
If the parties agree to divide the value of the boat or the court decides to apportion part of the value of the boat, that value must be determined.
A boat’s value will often be found by comparing the sales of similar boat models of similar ages. Just like a used automobile’s value is determined.
Parties are likely to stipulate to the value of the boat.
Or, after an internet search, a party can ask the court to take judicial notice of recent sales of similar boats in order to determine the value of the boat.
“[J]udicial notice is a branch of the law of evidence, and authorizes the court, whenever a fact is material, to take judicial notice of the fact, but it must be presented to the court in some way” People ex rel. McCallister v. Keokuk & Hamilton Bridge Co., 287 Ill. 246, 250-51, 122 N.E. 467 (1919)
If there is a dispute as to the value, a print out from a used boat sale website will not suffice to establish the value of the parties’ boat. The print out is an “out of court statement” and is, therefore, impermissible hearsay. Furthermore, the value of the boat is an opinion and cannot be introduced into evidence.
In a court-determined boat value dispute, an expert will be needed to opine on the value of the current boat.
Once the court has reviewed the evidence “[t]he court shall make specific factual findings as to its classification of assets as marital or non-marital property, values, and other factual findings supporting its property award.” 750 ILCS 5/503(a)
The boat owner cannot be expected to complain that boats only lose money and lose value, that a boat is a financial albatross which deserves to be assigned low, no or even negative value due to the boat’s upkeep expenses.
“If one spouse is awarded a piece of artwork and the other is awarded a boat of equal value, it is immaterial that the piece of art may appreciate in value and the boat will depreciate. It is the value of the asset at the time of distribution that the circuit court must consider when dividing marital property.” In re Marriage of Abrell, 923 NE 2d 791 – Ill: Supreme Court 2010
Boats And Dissipation Of Assets In An Illinois Divorce
Let’s be honest, boats are sexy. Those weekends on the boat will no longer be shared by the couple…someone is still going to use that boat. Whoever is using the boat is likely to bring along a romantic interest.
What better date for the almost divorced person than a day out on the water? That day still costs money, though. Hundreds of dollars of gas, most likely.
That gas money and any additional boat expenses could be deemed a dissipation of assets.
“Dissipation is defined as the use of marital property for one spouse’s sole benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.” In re Marriage of Tietz, 605 NE 2d 670 – Ill: Appellate Court, 4th Dist. 1992
If the divorce is proceeding apace “the marriage is undergoing an irreconcilable breakdown.” If marital money is used to purchase gas for the boat or pay for other boating expenses, that’s a dissipation of assets.
Once established a court can allocate assets after adjusting for “the dissipation by each party of the marital property” 750 ILCS 5/503(d)(2)
“The general principle is that a person charged with the dissipation is under an obligation to establish by clear and specific evidence how the funds were spent.”In re Marriage of Petrovich, 507 NE 2d 207 – Ill: Appellate Court, 2nd Dist. 1987
The case of In Re Marriage of Hubbs has a perfect dissipation via boat example. Therein, the appellate court describes how “Mark contends that the circuit court erred in finding a dissipation of $11,760, which consisted of expenses associated with his use of a boat and a jet ski after the parties separated. The evidence presented at the hearing shows that after the marriage had undergone an irreconcilable breakdown, Mark purchased a 29-foot boat and a jet ski. Although Peggy had been on the boat between two and five times, she had always been on the boat in the presence of Mark. In fact, Peggy could not operate the boat by herself. In addition, the evidence reveals that Mark’s female companion had been on the boat on a much more regular basis than Peggy. On appeal, Mark essentially claims that because Peggy was on the boat a couple of times, it is error for the circuit court to find that Mark purchased the boat for his “sole” benefit. We do not believe, based on the facts presented, that the circuit court’s finding that Mark purchased the boat and the jet ski for his personal benefit is against the manifest weight of the evidence. Merely because Peggy was on the boat a couple of times does not mean that the circuit court cannot find that Mark did not purchase the boat for his sole benefit. In light of the record in this case, the circuit court’s finding that Mark’s purchases of the boat and the jet ski constituted dissipation was not against the manifest weight of the evidence.” In re Marriage of Hubbs, 363 Ill. App. 3d 696, 702 (Ill. App. Ct. 2006)
Boats And Maintenance In An Illinois Divorce
The sheer expense of a boat is an excellent argument for two factors that impact maintenance, 1) that the lessor earning spouse was used to enjoying a boat, 2) If the boat is sold, the maintenance paying spouse has that expense of the boat now available to pay maintenance.
Maintenance awards are usually made via the guidelines formula (33% of the net income of the payor less 25% of the net income of the payee not to exceed 40% of the parties total incomes)
Guidelines maintenance is only awarded “[i]f the combined gross annual income of the parties is less than $500,000” or if “the court makes a finding that the application of the guidelines would be inappropriate.” 750 ILCS 5/504(b-1)(1)
Boats are expensive. If the parties are making more than $ 500,000 together the factors determine maintenance. Those factors include “the needs of each party” 750 ILCS 5/504(a)(2)
The “needs of each party” is in the eye of the beholder. If a boat was needed before the divorce, a boat can be considered needed after the divorce.
“[M]aintenance is designed to allow the recipient spouse to maintain the standard of living enjoyed during the marriage.” In re Marriage of Micheli, 2014 IL App (2d) 121245
If the boat is sold, the eased expense for both the payor and the payee may be taken into consideration when awarding maintenance.
Another factor in determining non-guidelines maintenance is “the income and property of each party, including marital property apportioned and non-marital property assigned to the party seeking maintenance as well as all financial obligations imposed on the parties as a result of the dissolution of marriage” 750 ILCS 5/504(a)(1)
Boats can be a problem when modifying maintenance after the divorce is over.
When modifying maintenance, a divorce court can consider “the property acquired and currently owned by each party after the entry of the judgment of dissolution of marriage” 750 ILCS 5/510(a-5)(8)
It is very hard to say you do not have enough money to pay your ex-spouse when you have enough money to pay for a boat.
For example, In Re Marriage of Mostofi v. Mostofi, “[e]vidence was presented that after [the husband] petitioned the court to modify his maintenance payments, he purchased half of a $600,000 boat. [The husband[ testified that the costs for keeping a boat in the harbor were around $7,000, and the costs for storing the boat also amounted to about $7,000.” IN RE MARRIAGE OF MOSTOFI v. MOSTOFI, 2022 IL App (1st) 210324 – Ill: Appellate Court, 1st Dist., 5th Div. 2022
Interesting assets, like boats, require creative solutions so that you can get the most value from the boat at the end of your divorce. Contact my Chicago, Illinois family law firm to learn more about your options.