Separating Marital and Non-Marital Property in an Illinois Divorce

Separating Marital and Non-Marital Property in an Illinois Divorce

Illinois follows an “equitable distribution” rule when it comes to divorce. This means that if the divorcing spouses cannot reach a voluntary agreement, the judge will divide any marital property in a manner that is considered fair and just under the circumstances, which does not necessarily mean a 50/50 split.

Divided Appeals Court Holds Purchase of Pre-Marital Pension Credits Qualify as Marital Property

However, the court still needs to decide what qualifies as “marital property.” Normally this refers to any asset acquired during the marriage itself (with some exceptions). Conversely, assets held by either spouse prior to marriage is generally considered separate (or nonmarital) property.

There are some cases in which the line between marital and non-marital property is not immediately apparent. Consider this recent decision by the Illinois Third District Appellate Court, In re Marriage of Zamudio and Ochoa. The parties in this divorce case married in 2000. The wife filed a divorce petition in 2014. The husband and wife apparently managed to resolve most of their outstanding issues before heading to court. But one point of dispute that remained was the husband’s pension.

The husband served on active duty in the U.S. armed forces from 1974 to 1980–more than 20 years before his marriage. He later worked for the Illinois State Police. While he was married, the husband “used marital assets to purchase 48 months of permissive military service credit,” according to court records.

Basically, the husband was allowed to purchase these credits and thus increase the amount of his pension based on his prior military service. The wife argued that she was entitled to one-half of these additional benefits, as they were marital property. The husband replied that the wife was entitled to reimbursement for the marital funds he spent to purchase the service credits, but not the additional pension benefits acquired.

The divorce court agreed with the husband’s position. A divided three-judge panel of the Third District disagreed and sided with the wife. As the majority saw it, the husband’s “military service had no relationship to his pension benefit until (sic) he exercised the option of purchasing the 48 months of additional credits, which was done during the marriage and with the use of marital funds.”

The dissenting judge said the trial court got it right and that, as far as he could tell, the majority had issued the “first decision in the free world ordering a trial court to consider a four-year period that occurred 20 years prior to the marriage, as though the parties were married during those four years.” Like the trial court, the dissenting judge said the husband was only obligated to reimburse his wife for the use of marital funds spent in purchasing the service credits.

Speak with a Rolling Meadows Divorce Lawyer Today

As the divided appellate panel illustrates, separating marital and non-marital assets in a divorce can be a tricky proposition. That is why it is important to work with a qualified Rolling Meadows divorce lawyer when resolving any outstanding property issues with your spouse. Contact the SAM LAW OFFICE LLC today to schedule a free consultation with a member of our family law team today.