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Kane County divorce lawyerDivorce involves much more than a couple merely deciding to end their marriage. To complete the divorce, the spouses must address several crucial issues, including the division of their shared assets and debts, child custody, spousal support, child support, and more. Most of these issues involve finances, so one of the first steps in any divorce is to complete a financial disclosure.

The Illinois Marriage and Dissolution of Marriage Act requires both spouses to provide full and accurate financial information to each other and to the court. This is accomplished through the use of a Financial Affidavit, which lists all income, debts, assets, and liabilities. The purpose of the financial disclosure is to give both spouses and the court a complete picture of each person's financial situation so that an equitable division of property can be achieved and support orders, if any, can be accurately calculated.

Some spouses are less than forthcoming with financial information. In cases like these, discovery tools may be used to obtain the necessary information.

What is Transmutation in a Divorce? 

Posted on in Division of Property

Kane County asset division lawyerThe division of marital assets and liabilities is often one of the most complicated and consequential aspects of the divorce process. Marital property is property and debts contained within the marital estate. Both spouses have a legal right to a share of marital property. Non-marital property is property and debts that are not part of the marital estate and are owned solely by one spouse. Non-marital property generally includes property that was acquired by either spouse before the marriage, inheritance or gifts received during the marriage, and property that is excluded by a valid prenuptial agreement. Transmutation of assets is the conversion of non-marital property to marital property or vice versa.

Commingling or Mixing of Property Can Lead to Transmutation

The transmutation of property generally occurs when one spouse commingles or mixes non-marital assets with marital assets. For example, if a wife deposits her separate funds into a joint account, these funds can be converted into marital funds. 

In rare cases, it is also possible for marital property to be converted into non-marital property. Consider an example in which a man owns a home but is still making mortgage payments at the time of his marriage. He and his spouse move into the home together and use marital funds to pay the mortgage payment each month. However, the home remains titled in his name alone. Essentially, marital funds could be considered as being transmuted into the man's non-marital estate. 

St. Charles divorce lawyerUnfortunately, the end of a marriage relationship can sometimes bring out the worst in people. Some divorcing spouses are so angry that they act out maliciously toward the other spouse. They may threaten their spouse, refuse to cooperate with the divorce process, or destroy their spouse's property. 

If your spouse destroyed, ruined, sold, or otherwise wasted money or property during your divorce, you may be able to seek legal recourse through a "dissipation of assets" claim. 

What is Dissipation of Assets? 

Illinois law describes dissipation of assets as  "any act or series of acts resulting in the depletion of marital property for a non-marital purpose." The law goes on to state that dissipation claims can be filed by either spouse during a divorce proceeding.

St. Charles High Asset Divorce LawyerFor art collectors and enthusiasts, paintings, photographs, sculptures, and other artworks may be some of the most valuable assets they own. Fine art has not only substantial financial value, it often has great personal significance. Both spouses may insist on keeping certain pieces which leads to contentious property division disputes. Furthermore, determining the value of a piece of art is not easy, and professional appraisers are often needed to value art assets during divorce. Unfortunately, some spouses may even use art as a vehicle for financial deception during a divorce. All of the factors can complicate the divorce process significantly.

Determining Ownership of Fine Art

Usually, an asset that a spouse acquires during the divorce is a marital asset. Property that a spouse owned prior to the marriage is that spouse’s property alone. Property that a spouse received in an inheritance or gift is also classified as non-marital property. Unfortunately, classifying property is rarely this cut and dry. Countless factors can complicate the process of determining what property is included in the marital estate, including the commingling of assets.

According to Illinois law, both spouses are entitled to an equitable share of the marital assets during divorce. Of course, you cannot physically divide a piece of art. Divorcing spouses may decide to sell their art and divide the proceeds, but this option may be out of the question for some art lovers. Many people who collect fine art have spent years if not decades amassing specific pieces. The thought of parting with their treasured artwork is devastating.  Unsurprisingly, this can lead to considerable conflict during divorce.

shutterstock_1195555699.jpgWhen a couple chooses to end their marriage, they will need to address a variety of issues during the divorce process. Foremost among these is the division of marital property. All assets and debts that a couple owns together must be divided fairly and equitably. In addition to marital property, each spouse will likely have certain assets that are considered separate property, including items they owned before getting married, assets received through inheritances, and property excluded from the marital estate by a prenuptial or postnuptial agreement. Separate property will not be divided between spouses, and each party will be able to retain ownership of the assets they originally possessed. However, there are many situations where marital and separate property may become mixed together or “commingled.” By understanding how to identify marital and separate property and determine how ownership of commingled property will be handled, spouses can ensure that property division will be addressed correctly during their divorce.

Examples of Commingled Property

It is not always easy to determine which assets may be considered separate property vs. marital property, especially when a couple has combined their finances during the years that they were married. When assets become commingled, it may sometimes be possible to trace them back to their source, but if this is not possible, separate property may be “transmuted” into marital property, and it will need to be included during the property division process. Some cases where commingling of assets may occur include:

  • Real estate property - A home or other property that one spouse owned before getting married will be considered separate property. However, some of this asset may be considered marital property if the other spouse made contributions toward its increase in value. For example, if payments on a home’s mortgage were made using income earned by both spouses, the increase in equity in the home may be considered to be a marital asset. Similarly, if a spouse helped make improvements to a home owned by the other spouse, such as by performing work or helping make payments to a contractor, they may be able to claim partial ownership of the home. To ensure that they can maintain full ownership of the property, the spouse who originally owned the home may reimburse the other spouse for the contributions they have made.

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