How To Turn A Non-Marital Property Into A Marital Property In An Illinois Divorce

One of the most common scenarios in an Illinois divorce is finding that one spouse has non-marital property from before the marriage. The allegedly non-marital property is usually a house that both people live in, pay for, and keep repaired over the course of years.

Of course, after a divorce has been filed, the owner of the non-marital property will proudly claim that the property is non-marital and, therefore, they are going to keep the property 100%.

This is tough pill to swallow for someone who has treated the non-marital property as their home and even paid for the mortgage and repairs to the home. All is not lost, however. With some good lawyering, the non-marital property or a portion thereof may be declared marital.

“The 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

[T]he following…is known as “non-marital property”:

“property acquired before the marriage” 750 ILCS 5/503

The non-marital property MUST stay with the party in whose name that non-marital property remains.

“[T]he court shall assign each spouse’s non-marital property to that spouse.” 750 ILCS 5/503(d)

Marital property, however, gets divided. An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 5/503(d)

To turn non-marital property into marital property you need to “muddy the waters” sufficiently to make the presumably non-marital property marital-ish enough where a court can declare it marital and thus divide it equitably. 

It’s not a black and white distinction. It’s like pee in pool. Even a little bit of a marital character is enough to taint the entire non-marital property. If you cannot determine if a property is marital or non-marital, it must be marital. “Any doubt as to the nature of the property must be resolved in favor of the finding that it is marital” In re Marriage of Steel, 2011 IL App (2d) 080974

This is fair. If the property is just a little marital, you can tell the court, “I’m not looking for a 50/50 split. My spouse owned it before the marriage, I just want to get the equitable portion that’s fair and you need to declare the property marital to do that. Anything else would be an injustice.”

The way to make the property marital is for the court to find that the property became a gift to the estate via the property owner’s actions. 

A Gift Turns Non-Marital Property Into Marital Property In An Illinois Divorce

A gift can transmute a presumably non-marital property into a marital property.

You can prove that the spouse intended to make a gift of the property to the marriage via testimony about the things they said and the way they acted.

“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

“A gift is a voluntary, gratuitous transfer of property by one to another where the donor manifests an intent to make such a gift and absolutely and irrevocably delivers the property to the donee.” In re Marriage of Cook, 117 Ill. App. 3d 844, 849 (Ill. App. Ct. 1983)

Without putting a spouse on the title of a home, car or anything, it does not look irrevocable. An argument could be “They’re married. Everything you do in a marriage is irrevocable. Everything moves toward becoming more and more marital” But then again, we are in a divorce proceeding to stem that pattern toward marital-ness.

Once an allegation of a gift is made, it is the alleged giver’s duty to prove that they did not make a gift. Even a little bit of a gift means he MUST prove he did not gift enough to transmute the non-marital property into marital property. “In dissolution proceedings, the “donor” spouse may rebut the presumption of gift with clear, convincing and unmistakable evidence” In re Marriage of Rink, 136 Ill. App. 3d 252, 257 (Ill. App. Ct. 1985)

So without the proof to rebut the gift, the gift remains in existence. This mere hint of existence of a gift may mean that the property MUST be marital. If the true nature of the gift is at all unclear “any doubts as to the nature of the property are resolved in favor of finding that the property is marital.” In re Marriage of Schmitt, 391 Ill. App. 3d 1010, 1017 (Ill. App. Ct. 2009)

A gift need not be proven by the alleged giver’s actions alone. If there was significant contribution to the non-marital property by the other spouse, a gift to the marital estate can be presumed. 

“The commingling of marital and nonmarital assets, and the contribution of marital assets to nonmarital property must be sufficiently significant to raise a presumption of a gift of the property to the marital estate.” In re Marriage of Olson, 451 NE 2d 825 – Ill: Supreme Court 1983

This contribution doesn’t have to be financial. Contribution can be non-financial effort of a homemaker’s maintenance of a non-marital home or a spouse’s rehabilitation and repair of the non-marital home can create “a rebuttable presumption that the contribution is intended to change the character of the property to marital.” In re Marriage of Smith, 86 Ill. 2d 518, 531 (Ill. 1981)

Stress to the court that there is no injustice to the spouse alleging the property is non-marital when declaring that the actions of the parties constituted a gift. A finding that the property is marital does not automatically constitute an even 50/50 split of the newly marital property.

“The Act does not require an equal division of marital property, but an equitable division” In re Marriage of Jones, 543 NE 2d 119 – Ill: Appellate Court, 1st Dist. 1989

The judge can still award an equitable portion to each party that reflects the fact that a portion of the property was once non-marital.

Once marital, the court can consider “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)

Finally, to expose the absurdity of declaring properties completely non-divisible, allege that if the house is non-marital then any money that spouse put into the house during the marriage is, by definition, dissipation. 

“Dissipation is defined as the use of marital property for one spouse’s 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.

While dissipation is not a great argument because the other spouse got to live in the house therefore payments were for a marital purpose, it might make the judge lean into the concept that a finding of a gift should be a more appropriate way to arrive at a just final decision.

The allegation of a gift when title has not been transferred will be a stretch. There are numerous counterarguments which I do not address in this article (this way your opponent won’t read the same article and bring those arguments to court)

The failure of the judge to find that there was a gift does not mean you are completely out of luck.

Judges have been known to “split the baby” and deny one claim and then award you a portion of the house based on the next claim: commingling which requires reimbursement.

Commingling, Reimbursement And Non-Marital Property In An Illinois Divorce

If there is non-marital property that was acquired before marriage are NOT two estates: One non-marital house and their marital contributions to the non-marital homes. There are THREE estates. The husband’s non-marital estate, the wife’s non-marital estate and the marital estate.

“All the property of the parties to a marriage belongs to one of three estates, the estate of the husband, the estate of the wife, or the marital estate. Property brought to the marriage by the husband belongs to him. Property brought to the marriage by the wife belongs to her.” In re Marriage of Werries, 247 Ill. App. 3d 639, 641-42 (Ill. App. Ct. 1993)

Marital money flowing into a non-marital property are “proceeds attributable to the improvements to which both parties contributed constitutes marital property, thereby creating the presumption, unrebutted in this case, that the entire residence was transmuted into marital property” In re Marriage of Lee, 87 Ill. 2d 64, 67-68 (Ill. 1981)

A spouse is entitled to reimbursement under two theories: 1) they made a contribution during the marriage which must be divided equitably and 2) that they are entitled to reimbursement for their contribution to the non-marital estate from their own pre-marriage non-marital estate. 

If a gift is denied by the Illinois divorce judge…then there MUST be reimbursement. 

“While there is no right to reimbursement when a gift has been made, there is a right to reimbursement when assets have changed character by reason of commingling as long as the contributions between estates can be traced by clear and convincing evidence.” In re Marriage of Werries, 247 Ill. App. 3d 639, 642 (Ill. App. Ct. 1993)

Again, if there was no gift, the other spouse must receive reimbursement from the non-marital estate. 

“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.” 750 ILCS 5/503(c)(2)(A)

“When a spouse contributes personal effort to non-marital property, it shall be deemed a contribution from the marital estate, which shall receive reimbursement for the efforts if the efforts are significant and result in substantial appreciation to the non-marital property” 750 ILCS 5/503(c)(2)(B)

Nothing is black and white in divorce law. With the help of a good lawyer, everything bleeds into grey and can be subsequently allocated by an Illinois divorce judge. Contact my Chicago, Illinois family law firm today to speak with an experienced Chicago divorce attorney.

source https://rdklegal.com/how-to-turn-a-non-marital-property-into-a-marital-property-in-an-illinois-divorce/