While the emotional implications of divorce can certainly be difficult to contend with, the logistical and financial consequences of divorce are often just as taxing. If you and your spouse have recently split up, you are probably looking for a new place to stay. Many people choose to rent an apartment or stay with family or friends while their divorce is pending, but others choose to actually purchase a home. If you would prefer to buy rather than rent, you may be wondering how the decision to purchase a new home will affect your divorce. Before making any major financial decisions during your divorce, It is crucial to understand how Illinois law affects the division of assets.  

Equitable Distribution of Marital Assets

Before we can discuss the consequences of buying a home while going through a divorce, it is important to understand how Illinois courts divide marital property. Illinois is an equitable distribution state. Courts divided marital property equitably, or fairly, based on several factors, including the spouses’ employment and financial circumstances, their future earning capacity, the standard of living established during the marriage, and more. Unlike in community property states, it is possible that one spouse may receive a greater share of the marital estate than the other during an Illinois divorce. 

Marital assets include any property or debts accumulated by either spouse during the course of the marriage. If you buy a home while you are still legally married and before a legal separation, the home will likely be considered marital property, and therefore, the value of the home will be subject to division during divorce. This is true even if the home is only titled in your name.

If you are like many people, your car, truck, or other vehicle is an essential component of your everyday life. You may have also spent a great deal of time, effort, and money making payments on your vehicle and keeping it maintained. It is therefore understandable to have concerns about who will retain ownership of your vehicle after divorce. You may question whether your spouse has the right to keep a car that is only titled in your name or worry that you will be forced to sell the vehicle and split the proceeds. Understanding the laws that govern asset distribution during divorce is key to reaching a fair divorce settlement.

Illinois Laws Regarding Ownership of Vehicles and Divorce

You and your spouse may be able to resolve property division concerns such as vehicle ownership through negotiations, mediation, or collaborative law. However, not every divorcing couple is able to reach a property distribution arrangement without court intervention. If your divorce case is litigated, a legal doctrine called “equitable distribution” will be used to determine which spouse gets what assets. Separate property, meaning property acquired by a party before getting married, is typically assigned to the original owner of the property. Property received in an inheritance is also usually classified as separate property. Assets that are acquired by either spouse during the marriage are considered marital property. If you purchased your vehicle after you got married, it is part of the marital estate and subject to division. This means that even if your vehicle is titled in your name alone, your spouse will have the same rights to the vehicle as you do.

Factors Considered by the Court During Division of Motor Vehicles

There are a few different ways that vehicles may be handed during the property division process. The vehicle may be sold and the profits split between the spouses, or one spouse may keep the car, while the other spouse keeps assets of similar value. When determining who will own a vehicle after divorce, Illinois courts may consider a number of different factors. The amount of money that each spouse contributed to the acquisition of the vehicle is one consideration. Each spouse’s income and employment circumstances as well as the spouses’ transportation needs are also considered. Parental responsibilities and parenting time arrangements may also influence who gets a vehicle, since a parent may need a larger vehicle to transport children to school or activities.

Whether it is from medical bills, student loans, credit cards, or another source, most adults have debt. In fact, the average American is about $38,000 in debt. If your spouse has a high amount of debt, you may have questions about who is responsible for paying this debt after you get divorced. You may assume that any credit cards or loans that are in your spouse’s name will be his or her sole responsibility after you end the marriage. Unfortunately, this is not always the case. There are several different factors that influence how debt is divided in an Illinois divorce.

Debt is Divided Similarly to Property

Illinois is an equitable distribution state. Any property that was obtained during the marriage is considered part of the marital estate and is subject to division during divorce. Property that a spouse obtained before getting married is considered separate property and is not subject to division. Debt is handled in a similar way. Any debts that were acquired by either spouse during the marriage are generally considered to be marital debts shared by both spouses. Debts acquired before the spouses got married are typically considered separate and are assigned to the spouse who acquired the debt.

However, there are exceptions to these generalities. For example, if a spouse’s student loans led to a higher salary and therefore increased standard of living for both spouses, it is possible that both spouses would be responsible for repaying the loans. On the other hand, if a spouse’s gambling addiction accumulated significant debt, the other spouse may not be responsible for paying it off since the debt did not benefit both spouses.

Asset division during divorce involves much more than simply splitting a couple’s bank accounts. Complex assets, such as stocks and retirement funds, must also be accounted for. If you are considering getting a divorce in Illinois, you may have concerns about how your combined property will be divided between you and your spouse. You may also be unsure of which assets your spouse is entitled to and which assets are yours alone. Retirement account assets may be the result of years, if not decades, of hard work so they are often a significant portion of the marital estate. Understanding how these assets are divided during divorce is essential to ensure a fair settlement of the marital estate.

Classifying Retirement Assets as Marital or Separate

Illinois is an “equitable distribution” state, which means that property is distributed in an equitable, but not always even, manner during a divorce. Property division is based on many factors, including each spouse’s financial circumstances, their contributions to the acquisition of property, child custody arrangements, and much more. Only marital property is divided during an Illinois divorce. Marital property includes any assets that were acquired during the marriage. Nonmarital, or separate property, includes property acquired through inheritance or gift as well as property obtained by either spouse before the marriage. Retirement funds that a spouse accumulated before getting married are classified as nonmarital, and therefore, not subject to division. However, the portion of the retirement assets that were accumulated during the marriage is considered a marital asset and will need to be divided. It is essential to note that retirement plans will not be divided if a divorcing couple has signed a valid prenuptial agreement that excludes retirement assets.

When a married couple decides to divorce, one of the most pressing questions is often, “What should we do with the family home?” Some individuals decide to stay in the family home and “buy out” their soon-to-be ex-spouse. Other times, one spouse takes ownership of the home while the other spouse receives property that is roughly equal in value. For some divorcing couples, the choice that makes the most sense is to sell the home and split the profits. Selling your home while going through a separation or divorce can be very complicated both personally and legally. There are several things you should keep in mind when deciding how to handle your family home when it comes to the division of property in your Illinois divorce.

Financial Concerns Regarding the Sale of Your Home

Before proceeds from the sale of your home can be divided, you will need to pay off the mortgage as well as any second mortgage or home equity line of credit. You must also pay the brokers’ fees and any capital gains tax that applies. Tax liability may not be high on your list of concerns, but it can have major financial ramifications during the sale of a house.