Breaking Down Recent Changes in Divorce Law: Impacts on Property Allocation
Dividing property, assets, and debts is often one of the most complicated components of a divorce case. Attorneys frequently must classify property as either marital (subject to division) or non-marital (not subject to division), figure out how to appropriately value marital property and debts, and make proposals and arguments to the judge on the best way to equitably divide the marital property and debt and set off the nonmarital property and debt. The process can be time-consuming and complicated, but an experienced divorce attorney can help you immeasurably.
In this blog post, we’ll take you through some of the recent developments in case law as it relates to allocation of property, assets, and debts during divorce proceedings, and how these developments could impact your divorce settlement. If you have questions about how to obtain an advantageous divorce settlement, contact one of our experienced divorce attorneys today.
In Re Marriage of Chamberlain
The first case we address, In re Marriage of Chamberlain,[1] deals with the interplay of postnuptial agreements and property allocation. The main take away here is that when a postnuptial agreement is set aside, the court will determine equitable allocation of marital property based on the totality of the circumstances, including the fact that the postnuptial agreement was unconscionable.
This case involved a couple who had been married for nearly 40 years but divorced in 2023. The Wife had previously filed for divorce in 2011, which remained pending and unresolved some time thereafter when the Husband suffered a stroke and became disabled. Unable to care for himself, he asked his Wife to reconcile and allow him to return to the marital residence. The Wife agreed, under the condition that her Husband would execute a quitclaim deed to the marital residence, sign a postnuptial agreement, and execute a new healthcare and property powers of attorney, naming Wife as his attorney-in-fact. As a consideration, Wife agreed to dismiss the pending divorce case and to provide care for Husband at the marital residence. Perhaps unsurprisingly, this postnuptial agreement heavily favored the Wife. Eventually, after a new mortgage on the house and financial misconduct by the Wife, it became clear the caretaking arrangement was not working out and the Husband moved into a veteran’s home for care.
In 2021, the Wife again filed for divorce and asked the court to incorporate the postnuptial agreement into the Judgment of Dissolution. At trial in 2023, the trial court ruled that the postnuptial agreement was procedurally and substantively unconscionable because when Husband executed the documents, he was not likely cognitively capable of doing so and was under duress. The trial court further noted that Wife violated several provisions of the postnuptial agreement. After setting aside the postnuptial agreement and quitclaim deed, the trial court awarded Husband 50% of the value of the marital residence and 50% of the cash payout on the mortgage Wife took out on the residence. The trial court deemed the aforementioned awards as maintenance to Husband not dischargeable by bankruptcy. Wife appealed, arguing that the postnuptial agreement was not unconscionable, that the trial court’s order finding that her payments to Husband were construed as maintenance was improper, and that the trial court’s property award was erroneous. The appellate court affirmed in part and reversed in part. The appellate court first affirmed that the postnuptial agreement was unconscionable, and that Wife violated several provisions of the postnuptial agreement for the reasons set forth by the trial court. As such, the postnuptial agreement was unenforceable. Therefore, the trial court’s setting aside of the postnuptial agreement and allocation of property to Husband was proper. However, the appellate court reversed the trial court’s ruling that such property awards be deemed as maintenance to Husband. The appellate court held that the trial court made no findings regarding the statutory factors pertaining to maintenance awards.
In re Marriage of Meyer-Fiedler and Fiedler[2]
This case underscores the importance of competent, experienced attorneys who are familiar with procedural requirements to advance your case! In this case, the Illinois appellate court addressed a contentious dissolution of marriage between the parties, which involved multiple legal motions and a finding of contempt against the wife for failing to comply with court orders related to financial disclosures. The husband initially filed petitions seeking sanctions for her noncompliance, and the court eventually found the wife in contempt in April 2022. In the final dissolution judgment, the court awarded the marital residence to the husband and the vacation home to the wife, along with the equal division of their pensions. The wife was also ordered to sign quitclaim deeds for both properties, with daily fines for noncompliance.
The wife filed a motion to vacate the judgment, claiming improper property division and continued residence in the marital home. However, her motion was plagued by procedural issues, including failure to comply with filing deadlines and required legal formalities. When the husband filed motions to strike her petitions, the court denied her requests, leading to an appeal. The appellate court upheld the lower court's decision, noting the wife’s failure to adhere to procedural rules, such as including a statement of issues and providing sufficient legal analysis. As a result, the appellate court affirmed the judgment in favor of the husband.
In re Marriage of Reed[3]
In this divorce case, the trial court made several rulings regarding the division of assets and maintenance. Wife sought temporary maintenance, but the court awarded her exclusive possession of the marital home until February 2021, while Husband was responsible for the mortgage and insurance. Wife also filed a dissipation claim, alleging Husband dissipated assets from 2015-2020, but the court denied her claim, ruling she was aware of the transactions. The Husband alleged that the marital residence was non-marital because he the downpayment came from his non-marital assets. Though the trial court declared the marital residence as marital property, the court awarded the marital residence and its equity to Husband. It also awarded Husband a Chicago Heights property as his nonmarital property, noting it was inherited. Wife’s request for maintenance was denied due to her income and both parties' ability to support themselves.
On appeal, the appellate court affirmed much of the trial court's decision, but reversed and remanded in a few key areas. It agreed with the trial court's finding that the Chicago Heights property was nonmarital, but it found the trial court erred in its handling of the dissipation claim, remanding for the inclusion of dissipated funds from the separation date. Additionally, the appellate court ruled the trial court abused its discretion by awarding each party their own bank accounts, clarifying that marital funds should be divided at the time of dissolution. The appellate court ultimately upheld the distribution of all other property.
In re Marriage of Robbins[4]
The main issues in this case were 1) whether the Husband’s IRA was a martial asset subject to division, and 2) whether the Wife’s claim for dissipation could proceed. Pertaining to the IRA account, Husband provided testimony, statements, and tax returns, to prove that his IRA account was non-marital. The trial court ultimately found that the IRA was marital, stating that Husband’s evidence and testimony was not sufficient to prove that the account was non-marital. As for the dissipation claim, Husband admitted that he withdrew and transferred funds, but claimed that they were to pay marital bills, his attorneys fees, and $20,000 to Wife’s expert witness. The trial court found that Wife failed to establish a prima facie case for dissipation. However, the trial court subsequently granted Wife’s oral motion for reconsideration in part, citing Husband’s testimony that some of the funds were used for his attorneys’ fees. The trial court reasoned that the portion used for his attorneys’ fees may amount to dissipation. However, the trial court ultimately did not order Husband to reimburse the estate for his attorneys’ fees.
The appellate court reversed and remanded both issues. Pertaining to the classification of Husband’s IRA, the appellate court held that between the documentation and testimony provided by Husband pertaining to his IRA, he established by clear and convincing evidence that the IRA was non-marital. The appellate court therefore reversed the trial court’s findings that remanded directing the trial court to award the IRA to Husband as his non-marital property. Pertaining to Wife’s dissipation claim, the appellate court held that Wife did make a prima facie case by proving that Husband depleted accounts, so the burden then shifted to Husband to demonstrate with clear and specific evidence how the funds were spent. The appellate court reversed and remanded for consideration of the dissipation claim in its entirety.
We hope this post was informative! If you have questions about property allocation in divorce proceedings, please contact O. Long Law, LLC today to speak with one of our knowledgeable, experienced divorce attorneys.
[1] 2024 WL 4590046 (Ill.App. 5 Dist.), October 28, 2024.
[2] 2024 WL 2873802 (Ill.App. 1 Dist.), June 7, 2024.
[3] 2023 WL 8869453 (Ill.App. 1 Dist.), December 22, 2023.
[4] 2024 WL 49886807 (Ill.App. 3 Dist.), December 5, 2024.
