Written by Admin | Aug 24, 2017 5:00:00 AM
CHICAGOLAWBULLETIN.COM TUESDAY, AUGUST 22, 2017 ® Volume 163, No. 163 Serving Chicago’s legal community for 162 years Two courts reject creative way to shelter husband’s marital assets W hen one party go- As defined in Section 503(a) of i m b u rs e m e n t . ing through a di- MODERN FAMILY the Illinois Marriage and Disso- •The increase in value of non- vorce has already lution of Marriage Act, “marital marital property, irrespective of moved on to a p ro p e r ty ”means all property, in- whether the increase results from new romantic re- cluding debts and other obliga- a contribution of marital property, lationship, this often adds to the tions, acquired by either spouse nonmarital property, the personal sense of betrayal that a divorce subsequent to the marriage, ex- effort of a spouse, or otherwise, can cause. While this emotional ANDREA K. cept the following, which is known subject to the right of reimburse- aspect can be devastating to the MUC H I N as “nonmarital property”: ment provided in Subsection (c) of other spouse, the financial con- •Property acquired by gift, this section. sequences of a spouse spending legacy or descent or property ac- •Income from property ac- money on a new paramour must Andrea K. Muchin is a partner of Schiller quired in exchange for such prop- quired by a method listed in Para- be examined. DuCanto & Fleck LLP whose practice e r ty. graphs (1) through (7) of this sub- In legal terms, this is called concentrates on resolving complex family •Property acquired in exchange section if the income is not at- law and divorce cases —both through dissipation (750 ILCS 5/503(d) for property acquired before the tributable to the personal effort of settlement and litigation. Muchin focuses (2)). “D i s s i p at i o n”is defined as a on the custodial needs of wealthy m a r r i age. a spouse. 750 ILCS 5/503(a). p e rs o n’s use of marital property individuals and the complex financial •Property acquired by a spouse The trial court in Br i l l ag re e d for his or her sole benefit for a issues regarding their estates and after a judgment of legal sepa- with the wife that the house was a purpose unrelated to the mar- business interests. She can be reached at rat i o n . marital asset and awarded her the riage during a time when the a m u c h i n @ s d f l a w.c o m . •Property excluded by valid value of half of the husband’s in- marriage is undergoing an irre- agreement of the parties, includ- terest in the house. trievable breakdown. In re Mar- trates a creative attempt to avoid ing a premarital agreement or a The appellate court affirmed riage of Hubbs, 363 Ill.App.696 a dissipation claim which ulti- post-nuptial agreement. the trial court, holding that since (5th Dist. 2006). mately backfired. •Any judgment or property ob- it was undisputed that the hus- What specifically constitutes In Br i l l , a husband purchased a tained by judgment awarded to a band acquired the house during dissipation depends on the facts of house with his girlfriend while still spouse from the other spouse ex- the marriage, it was presumptive- each case. Generally, however, ex- married to his wife. The girlfriend cept, however, when a spouse is ly marital property and the hus- traordinary expenditures that provided the funds for the down required to sue the other spouse band failed to prove by clear and clearly do not further common payment, and the husband and to obtain insurance coverage or convincing evidence that he ac- marital interests are considered girlfriend agreed that the girl- otherwise recover from a third quired the house by one of the to be dissipation. friend would be paid back when party and the recovery is directly means specified in Section 503(a) Spending marital money on a the house was sold and the re- related to amounts advanced by of the marriage act. boyfriend or girlfriend is the most In doing so, the appellate court commonly known example. (See rejected the husband’s claim that In re Marriage of Awan, 388 his interest in the house was a gift Ill.App.3d 204 (3rd Dist. 2009), While the husband in B rill may have avoided from his girlfriend, finding that and In re Marriage Tabassum and the down payment by the girl- a dissipation claim, the court recognized that Yo u n i s , 377 Ill.App.3d 761 (2nd friend was not a gift because she Dist. 2007).) the wife still had a monetary interest in the was to be repaid when the house However, other examples of dis- was sold, noting that neither the house when it included some in the marital sipation include gambling losses husband nor the girlfriend even (see In re Marriage of Morrical, 216 assets that were being divided. testified that the down payment Ill.App.3d 643 (3rd Dist. 1991), and was intended to be a gift to the In re Marriage of Sobo, 205 husband. Ill.App.3d 357 (1st Dist. 1990)); the While the husband in Br i l l m ay - payment of legal fees —a l t h o u gh maining proceeds would be divid- the marital estate, the judgment have avoided a dissipation claim, under the current statute they ed equally between the husband shall be considered marital prop- the court recognized that the wife may be deemed an advance (He a d and girlfriend. e r ty. still had a monetary interest in v. Head, 168 Ill.App.3d 697 (1st Based on the cases cited above, •Property acquired before the the house when it included some Dist. 1988)); some investment loss- had the husband contributed marriage, except as it relates to in the marital assets that were es and payments of mortgage and funds to the down payment, this retirement plans that may have being divided. certain loans (see In re Marriage of would have constituted dissipa- both marital and nonmarital char- The Br i l l case should serve as a Pe t ro v i c h , 154 Ill.App.3d 881 (2d tion, and if so, those funds would ac t e r i s t i c s . warning to spouses going through Dist. 1987), and In re Marriage of have been treated as an advance •All property acquired by a a divorce that regardless of what G u rd a , 304 Ill.App.3d 1019 (1st to him from the marital estate. spouse for the sole use of non- you call it, whether you spend Dist. 1999)). Presumably this is why the hus- marital property as collateral for a marital money on a nonmarital All of these examples of dis- band did not make any contri- loan that then is used to acquire purpose during the marriage or sipation involve situations where a bution to the down payment. property during the marriage; to you acquire property during the spouse spends marital funds or In response, the wife argued the extent that the marital estate marriage even if you did not pay depreciates the value of an ex- that the husband’s one-half in- repays any portion of the loan, it for it, the money spent or the isting marital asset. The recent terest in the house was marital shall be considered a contribution property acquired will be taken case of In re Marriage of Brill, 2017 property in which she had an in- from the marital estate to the into consideration when dividing IL App (2d) 160604 (2017), illus- t e re s t . nonmarital estate subject to re- the marital estate. 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