Gifts and Divorce In Illinois
When considering gifts and divorce in Illinois, we must first acknowledge that all of the property you have at the time of the divorce can be classified as either marital or non-marital for the purpose of division of assets.
In short, marital property get divided and non-marital property stays with the original owner.
Marital property is broadly described as any property that you earned and kept during the marriage. “”[M]arital property” means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
Non-marital property is the exception to marital property and is again broadly defined with many specific categories including “property acquired by gift” 750 ILCS 5/503(a)(1)
What is a “gift” exactly under Illinois law?
A valid gift requires proof of donative intent and delivery of subject matter. In Re Marriage of Schmidt, 610 N.E.2d 673 (Ill. App. Ct. 1993). More simply put, “They wanted to give it to me and they did give it to me.”
For practical purposes, the courts usually assess whether an asset is a gift by classifying what kind of gift it was. For ease, I’ll list the many gifts and not-gifts the courts usually observe.
Engagement rings are conditional gifts. The condition is the marriage. If he or she accepts the engagement ring and then gets married, the engagement ring is a gift.
Wedding rings are gifts (to each other)
Wedding presents are gifts to the couple therefore both parties own them equally and they will be divided as marital property.
Anything from a parent is presumed to be a gift. Loans from parents are usually considered gifts unless the parents made the child actually sign a promissory note. “The law is clear that the transfer of property from a parent to a child is presumed to be a gift, and the presumption may only be overcome by clear and convincing evidence to the contrary.” In re Marriage of Heinze, 257 Ill. App. 3d 782, 790 (1994)
Transfers of property from relatives who are not parents are not presumed to be gifts. In re Marriage of Awan, 902 NE 2d 777 – Ill: Appellate Court, 3rd Dist. 2009
Gifts between spouses are gifts. This gets very fact specific. What’s the difference between, “I bought my wife a car” and “we bought a car for my wife to use?”
“In Illinois there exists a presumption of gift where a transfer of property is made from one spouse to another…but the gift must be proven by clear, convincing, and unmistakable evidence to overcome the presumption that all property acquired subsequent to the marriage is marital.” In re Marriage of Weiler, 629 NE 2d 1216 – Ill: Appellate Court, 5th Dist. 1994
This isn’t very clear but the court seems to say if it’s a transfer it’s a gift…but you’re still going to need something showing that it’s a gift. So, if the asset was transferred on the receiver’s birthday, that’s a good little bit of extra evidence that the asset was a gift.
Gifts between spouses that were made for tax purposes are still gifts. It’s common for estate planning purposes to give your spouse (especially if the spouse is younger) $ 15,000 a year. Even though the motive is to save the family money, these estate planning “gifts” are still a gift and therefore non-marital property to the receiver.
An Inheritance is always a gift and not subject to division during a divorce. An advance on an inheritance needs to have some kind of proof that it was, in fact, an advance on an inheritance. But, if the inheritance was left to both people in the couple, the inheritance will be marital property.
Putting property in your spouse’s name is not automatically a gift.
If you paid taxes because you received an asset that asset is not a gift that asset is income and, therefore, is marital property.
Once it’s established that some asset is a gift, that does not mean that it is automatically non-marital property. The presumption that a gift is non-marital conflicts with the presumption that an asset acquired after marriage is marital property. “There is a conflicting presumption, under section 503(b) of the Act (Ill.Rev.Stat.1991, ch. 40, par. 503(b)), that property acquired after the marriage is marital. When conflicting presumptions are presented, they cancel each other out and the trial court is free to resolve the issue of whether the property acquired by the transaction was marital or nonmarital on the facts.” In Re Marriage of Schmidt, 610 N.E.2d 673 (Ill. App. Ct. 1993)
An asset that’s established as a gift can still become marital property if the asset is subsequently co-mingled with marital property. In re Marriage of Mouschovias, 831 NE 2d 1222 – Ill: Appellate Court, 4th Dist. 2005. For example, depositing gifted money into a marital account.
If you have questions about a gift and divorce we need to know how you or your spouse received that gift to determine how it could effect your divorce. Please contact my Chicago, Illinois law office to discuss the situation with an experienced Chicago divorce lawyer.