What is non-marital property?
In general terms, all individually-held property which includes assets, debts, and other obligations of either spouse that were acquired prior to the marriage is presumed to be the non-marital property of that party.
The definition of non-marital property includes the following items of property:
- Property acquired by gift, legacy, or descent or property acquired in exchange for such property;
- Property acquired in exchange for property acquired before the marriage;
- Property acquired by a spouse after a judgment of legal separation;
- Property excluded by valid agreement of the parties, including a premarital agreement or a postnuptial agreement;
- 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;
- Property acquired before the marriage, except as it relates to retirement plans that may have both marital and non-marital characteristics;
- 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 provided in subsection (c) of this Section;
- 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; and
- 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.
How are properties with both marital and non-marital characteristics divided?
There are several ways the courts may choose to divide an asset with mixed characteristics. For example, in the case of a pension, the value of the pension at the time of the marriage plus any interest accumulated on that amount could be considered non-marital in character, but the contributions made towards pension and any growth on that amount after the marriage could be considered marital in character. While this example is rather straight-forward, complex issues can arise in characterizing, determining and allocating an asset as marital or non-marital.
Retaining a highly-experienced and knowledgeable Chicago based divorce attorney is important to ensure that the proper characterization and allocation of marital and non-marital assets will occur.. Contact Ward Family Law, LLC today.