In a Chicago, Illinois divorce, all property held by either of the two parties (or both) is either marital property or non-marital property.
The short rule of thumb is that if either party earned that property and saved that property during the marriage, it’s marital property. Section 503(a) of the Act provides that “[f]or purposes of the Act, ‘marital property’ means all property acquired by either spouse subsequent to the marriage.” 750 ILCS 5/503(a).
If property is gifted to the one of the parties by an outside party, then that property is no longer marital. “When marital and non-marital property are commingled by contributing one estate of property into another resulting in a loss of identity of the contributed property, the classification of the contributed property is transmuted to the estate receiving the contribution.” 750 ILCS 5/503(c)(1)
What happens when non-marital property gets mixed up with marital property, then? It’s very possible that the non-marital property will be considered “transmuted” into marital property or turned into marital property.
Transmutation is based on the presumption that the owner of the non-marital property intended to make a gift of it to the marital estate. In re Marriage of Benz, 165 Ill. App. 3d 273, 279 (1988).
Thus, the placement of non-marital property in joint tenancy or other form of joint ownership with a spouse “will raise a presumption that a gift was made to the marital estate, and the property will become marital property.” Id. at 280. The donor spouse, however, may rebut this presumption with clear and convincing evidence. Id.
So, once the non-marital property has been “mixed” with the marital property, you have to prove that it was never the intent of the non-marital owner to make a gift to marriage or a gift to both spouses, jointly. This is extremely difficult to do. Illinois courts have held that it’s not enough for the “giver spouse” to say “that wasn’t my intent when I did it.” Illinois courts have also implied that the “giver spouse” have to make some crystal-clear message at the time of the transmutation. In re Marriage of Vondra, 2016 Ill App 1st 15073.
The Illinois divorce cases where the courts allowed the “giver spouse” to rebut the presumption of transmutation are when the non-marital funds were put into joint accounts for such a brief period of time. In re Marriage of Heroy, 385 Ill. App. 3d 640, 673 (2008). For example, almost non-marital property held in a joint account for almost two years was held to be not brief enough to rebut the presumption of transmutation.
Once determined that the former non-marital property is now transmuted into marital property we must determine how it is to be divided.
If, however, the non-marital property is deemed to have retained its non-marital character any income from that property will be marital. “[P]roperty acquired before marriage is nonmarital and its increase in value is likewise nonmarital, and income derived from such property during marriage is deemed marital.” In re Marriage of Reed, 100 Ill. App. 3d 873, 877 (1981).
The division of marital property in a divorce proceeding in Illinois does not necessarily mean that the division will be equal or 50/50. The parties may negotiate a different kind of division or the judge may consider other factors in allocating the marital property.
Contact my Chicago, Illinois office to discuss what your property was and what it is now and what it will be after you are divorced.