The default rule in an Illinois divorce is whatever you came into a marriage with…you can leave the marriage with. The distinction between premarital and marital (thus, divisible) assets is crucial to determining who gets what in an Illinois divorce.
The subrule is that premarital assets that become blended or commingled with marital assets, those premarital assets take on the marital character and become divisible…much to the chagrin of the person who used to own the formerly premarital asset.
Transmutation In An Illinois Divorce
This blending of assets is called transmutation. Transmutation is “A change in the nature of something; esp., in family law, the transformation of separate property into marital property, or of marital property into separate property.” Black’s Law Dictionary (11th ed. 2019)
“Transmutation is based on the presumption that the owner of the nonmarital property intended to make a gift of it to the marital estate.” In re Marriage of Vondra, 2016 IL App (1st) 150793
“The placing of nonmarital property in joint tenancy or some other form of co-ownership with the other spouse will raise a presumption that a gift was made to the marital estate, and the property will become marital property.” In re Marriage of Benz, 165 Ill. App. 3d 273, 280 (Ill. App. Ct. 1988)
Once the transmutation occurs, is the property transmuted now completely divisible in an Illinois divorce?
Perhaps.
There may be a way to claw back the property into a non-marital, non-divisible status: by making a conversion claim.
A Conversion Claim As A Way To Undo Transmutation
A claim is “the assertion of an existing right” Black’s Law Dictionary (11th ed. 2019)
An Illinois resident’s rights are found in both the constitutions, the statutes and the case law.
The petition for dissolution of marriage is only one claim. There are many other claims available to a person getting divorced in Illinois. Conversion is a separate claim, a separate existing right that a divorcing Illinois resident can invoke.
“To state a cause of action for conversion, a plaintiff must prove that: (1) she has a right to the property at issue; (2) she has an absolute and unconditional right to the immediate possession of that property; (3) the defendant wrongfully and without authorization assumed control, dominion, or ownership over the property; and (4) she made a demand for the return of the property.” Weisberger v. Weisberger, No. 1-10-1557, 12-13 (Ill. App. Ct. 2011)
It is not difficult to imagine a spouse that has used either duress or fraud to transmute non-marital funds into marital and, thus, divisible property.
A conversion claim could allow a spouse to reassert individual control over an asset that they 1) have a right to the property (it was theirs first after all), 2) there is no special condition keeping them from having access and control of that property (like a contract with their spouse), 3) the other spouse used fraud, duress or some other wrongful method to have access and control of the property, 4) that a demand has been made for the property (the conversion claim itself).
Asserting a conversion claim would be unusual in an Illinois divorce court. The average Illinois divorce lawyer has never asserted a claim other than a petition for dissolution of marriage. It would certainly get the judge’s attention. In reality, a conversion claim in a divorce case lets you be clever by half. A conversion claim would allow the judge to “split the baby” by rejecting your conversion claim and making the exact same ruling under a contribution argument available via the more familiar Illinois Marriage and Dissolution of Marriage Act.
Contribution As An Alternative To A Conversion Claim
An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:
(1) each 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)
The courts are free to consider or not consider contribution when allocated marital assets.
“A party’s greater financial contribution might support a disproportionate property award in favor of the contributing spouse.” In re Marriage of Brill, 87 NE 3d 302 – Ill: Appellate Court, 2nd Dist. 2017
Alternatively, ““[A] spouse’s greater financial contributions do not necessarily entitle him or her to a greater share of the marital assets” In re Marriage of Scoville, 233 Ill.App.3d 746, 758, 174 Ill.Dec. 394, 598 N.E.2d 1026 (1992).
An Illinois divorce litigant should be able to effectively reverse transmutation by properly tracing the premarital assets that were transmuted into marital assets.
“When one estate of property makes a contribution to another estate of property,…the contributing estate shall be reimbursed from the estate receiving the contribution notwithstanding any transmutation; provided, that no such reimbursement shall be made with respect to a contribution that is not retraceable by clear and convincing evidence or that was a gift[.]” 750 ILCS 5/503(c)(2)(emphasis mine)
The spouse that benefits from the transmutation is sure to claim that the transmutation was a gift to the marriage to avoid this statutorily required reimbursement not withstanding transmutation. Gifts require evidence of intent.
“A valid gift requires proof of donative intent and delivery of subject matter.” In re Marriage of Schmidt, 242 Ill. App. 3d 961, 968 (Ill. App. Ct. 1993) (emphasis mine)
The spouse that allowed their premarital property to be transmuted can then explain how that was never their intent.
In the end, it all depends on the facts of the case. “[E]ach case rests on its own facts” In re Marriage of Jones, 187 Ill. App. 3d 206, 222 (Ill. App. Ct. 1989)
As the old yet creepy saying goes, “there is more than one way to skin a cat.” Does your Illinois divorce lawyer know more than one way to accomplish your goals? If not, contact my Chicago, Illinois family law firm to schedule a free consultation with an experienced Illinois divorce attorney.
