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.

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.

You may not be surprised to learn that arguments about money are one of the main sources of conflict in many marriages. While some spouses are eventually able to reach an agreement about how to handle finances, others are not able to resolve their differences and end up filing for divorce. According to one 2017 survey, about 21 percent of divorced individuals named money as the cause of their divorce. Interestingly, the higher a person’s income, the more likely they were to report financial conflict as the main reason for ending the marriage. About 33 percent of individuals with an income of $100,000 or greater said that money-related disagreements led to the split. If you are considering divorce, and you are worried about the financial actions your spouse may take before the divorce is finalized, you may want to protect yourself by obtaining a financial restraining order.

Freezing Marital Assets During Divorce

Some divorcing spouses may make extravagant purchases, use marital assets recklessly, intentionally damage marital property, or make other financial decisions that harm the other spouse. In order to protect divorcing spouses’ finances, Illinois law allows spouses to obtain a temporary court order that guards marital assets against waste or misuse until they can be equitably divided during divorce. According to Illinois law, a financial restraining order can prevent a spouse from “transferring, encumbering, concealing, or otherwise disposing of any property except in the usual course of business or for the necessities of life.”

This type of restraining order may prohibit spouses from selling marital property, closing bank accounts, or changing the beneficiaries on accounts. Depending on the situation, the restraining order may also restrict spouses’ access to certain marital accounts. The provisions contained in a financial restraining order apply to both spouses, so it is important to note that you will also be subject to restrictions and rules if you choose to obtain a financial restraining order.

Real estate considerations are often one of the most complex parts of property division during divorce. If you and your spouse own one or more rental properties together, you may be unsure of what will happen to this property after you are divorced. You have probably put a great deal of time, effort, and money into maintaining the property, and you may rely heavily on the income generated by tenants. As with any complex property issues during divorce, it is highly recommended that divorcing spouses who own rental properties receive legal guidance from an experienced attorney.  

Options for Rental Properties During an Illinois Divorce

Divorcing spouses in Illinois have the option of working out their own agreements for property division outside of the courtroom. With help from your lawyer, you and your spouse may be able to negotiate a rental property arrangement that does not leave either of you at a major financial loss. There are several different ways that spouses may divide rental properties during divorce. Some choose to have the rental property appraised so they can sell the property and split the profits. Another option is for one spouse to retain complete ownership of the property and “buy out” the other spouse. The spouses may also agree upon a property division arrangement that assigns ownership of the rental property to one spouse while the other spouse is assigned other marital property of similar value. For example, one spouse may own the rental property, while the other spouse will own the family home. Divorcing spouses may also choose to retain joint ownership of the property and continue to share the rental income.

If spouses cannot reach an agreement regarding their rental property through negotiation or mediation, the court will have to intervene. Illinois courts divide property during divorce according to “equitable distribution.” This means that assets are divided fairly based on each of the spouse’s financial circumstances, contributions to the marital estate, and several other factors. Only marital property is divided in an Illinois divorce. Property that was acquired by either spouse before getting married is considered non-marital property that is not subject to division. Due to the complex issues involved when dividing rental properties and other marital assets, the assistance of an experienced divorce lawyer is often needed.

Property division is often one of the most complex aspects of divorce. The division of retirement plans can be especially complicated. If you are getting divorced, you may have concerns about how your or your spouse’s IRA, 401(k), pension plan, or other retirement benefits will be divided. In Illinois, marital property is divided according to “equitable distribution.” Non-marital property, or property which was obtained by either spouse before the marriage, is not eligible for division. The specifics of how your retirement plan will be handled during divorce will vary depending on your unique circumstances, so it is important to contact an attorney and discuss your legal options.

Is My Retirement Plan Part of the Marital Estate?

Property accumulated during a marriage is typically considered part of the marital estate. Only certain gifts and inheritances are exempt from this rule. So, if you earned retirement funds through work that occurred during the marriage, these funds are marital property. If you started contributing to a retirement plan before you got married and then continued to make contributions during the marriage, part of the retirement plan may be considered marital property, and part of the plan may be considered non-marital property. However, retirement plans excluded from the marital estate through a valid prenuptial or postnuptial agreement are not eligible for division. 

There are several options available for dividing these funds during the property distribution process. One option is for the retirement funds and benefits to be divided between the spouses through a Qualified Domestic Relations Order (QDRO). Another option is for one spouse to keep the retirement funds while the other spouse receives marital assets which are of approximately equal value.