Purchases Anticipating Marriage
by Wes Cowell; updated 5 June 2016 -- suggest a correction
Don't be confused by pre-2016 cases. Assets purchased in anticipation of marriage are, by definition, non-marital property. It doesn't end there, however. Need advice? Call, leave your info., or scheduleschedule a consultation.
When couples plan for marriage, they often buy things to feather their nest . . . sometimes they buy the nest, itself. They also receive gifts -- everything from cars and houses to cups and saucers. It used to be that the court could consider assets "purchased in contemplation of marriage" to be marital property. If you bought a house, a nice TV, and two cars to prepare for married life, the court would say those assets were marital property and should be divided.
Under Illinois' new (1/1/2016) divorce law [750 ILCS 5/503(a)], assets and debts acquired prior to the marriage are non-marital property and not subject to division in divorce. The law says:
Disposition of property and debts.
(a) For purposes of this Act, "marital property means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage . . . .
. . .
Property acquired prior to a marriage that would otherwise be non-marital property shall not be deemed to be marital property solely because the property was acquired in contemplation of the marriage.
The Old Law: Under the old (pre-2016) law property acquired prior to the marriage usually was characterized as non-marital but courts could ignore the technicality and make a finding of marital property. In In re: Marriage of Jacks, 200 Ill.App.3d 112, 558 N.E.2d 106, 146 Ill.Dec. 143 (2d Dist., 1990), Mr. Jacks bought a house literally an hour prior to the exchange of vows. Sounds like marital property to me.
Most cases under the old law saw properties acquired within about 90 days of the marriage. In In re: Marriage of Leisner, 219 Ill. App. 3d 752, 162 Ill.Dec. 277, 579 N.E.2d 154 (1st Dist., 1991), the wife wanted the marital residence characterized as marital property. The court found the home to be the husband's non-marital property, however, as it was purchased some 15 months prior to the couple's engagement.
The New Law: Although an asset purchased prior to the marriage is characterized as non-marital property, the law still works fairness. Under the new law, the home in Jacks (above) would be his non-marital property, but only the downpayment would be set aside as his -- all subsequent mortgage payments made from marital property will constitute a right of reimbursement to the marital estate. Moreover, if the home is placed into co-ownership it will be characterized as marital property.
When a person makes a downpayment on an asset, marries, and the marriage pays off the loan, in a divorce the asset goes to the spouse who made the non-marital downpayment, but the marriage must be reimbursed for its contribution (the retirement of the loan). See my article on Commingling Property and Transmutation.
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> Marital Property Division Factors
> "Marital" & "Non-Marital" Property
> Purchases Anticipating Marriage
> Dissipation — Stolen & Wasted Assets
> Commingling Property and Transmutation
> 401(k)s and Retirement Investments
> Military Pensions and Divorce
> Saving the House – Injunctions
> Dividing S-Corp Retained Earnings
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