Items that you received as gifts during your marriage are usually considered to be non-marital property. A gift that your spouse gave to you for your birthday or anniversary is non-marital, even though your spouse used marital money to purchase it. However, a divorce court may classify a gift as marital property and subject to division, depending on the intent behind the gift and how you used it. Here are four examples of how a gift can become marital property:

1. Gift for Both: The court will distinguish between gifts that are meant for you only and gifts meant for you and your spouse. Wedding presents are a common example of gifts that are marital property because the giver intended you to use it as a married couple. Your spouse may argue that other gifts were given to you as a couple. You need to explain the reason for the gift and whether your spouse used it.
2. Gift as a Loan: A gift by definition is an asset that someone donates to you with no expectation of compensation. Money that a family member gives you becomes a loan instead of a gift if you agree to pay that money back. Loans that you receive during your marriage are marital debts, which can be divided during a divorce. The best ways to prove that a gift was a loan are showing a promissory note or asking the person who gave the money what his or her intentions were.
3. Gift as a Reward: An asset is not a gift if you received it in exchange for another asset or your services. The circumstances around receiving the asset can determine whether it was a gift or a reward. A court may interpret a monetary gift as compensation if the giver was thanking you for your help or expected you to perform a service soon after.
4. Gift Treated as Marital Property: Even a gift that is meant for you alone can become a marital property depending on what you do with it. For instance, money that you inherit is a non-marital property as long as you keep it separate from your marital money. If you put the money in a shared bank account, it gets mixed in with your marital money and may no longer be an individual asset.

Contact a St. Charles Divorce Attorney

You bear the burden of proof when you claim that an item from your marriage was a gift and is not marital property. A Kane County divorce lawyer at Goostree Law Group can find evidence that the item was intended as a gift to you. To schedule a free consultation, call 630-584-4800.

Source:

Your pension benefits are a marital property during your divorce, with some stipulations. Your spouse has a right to an equitable share of the value of your pension that you accrued during your marriage. If you worked towards your pension before your marriage, the value of those years is non-marital property. You can add value to your pension through means other than the number of years you worked. A recent Illinois divorce case decided whether the military service credits that a man added to his state pension are marital property.

Case Details

In the case of In re Marriage of Zamudio, the spouses had filed for divorce in 2014 after 14 years of marriage. The husband has a state pension from his 22 years of working for the Illinois State Police. During the marriage, the husband purchased four years of credit to add to his pension, based on his active military service from 1974 to 1980. When dividing properties during the divorce, the spouses disagreed on whether those purchased credits are marital properties:

• The husband said that they are not marital property because their value came from his military service that predated their marriage; but
• The wife said that they are marital property because the husband used marital money to purchase them.

The trial court sided with the husband, saying that all he owed the wife was half of the money that he spent to purchase the credits.

It can be difficult to continue to make house mortgage payments on your own after your divorce. However, you may be able to keep your marital home for the foreseeable future if you are able to get a reverse mortgage on your house. Reverse mortgages are available to people who are at least 62 years old and have a large amount of equity in their home – usually at least 50 percent. You use the money you receive from a reverse mortgage to pay off the remainder of what you owe on your home mortgage, with the surplus available for other expenses. Gray divorcees should consider whether a reverse mortgage could help them during the division of property, though there are risks.

How It Works

Assuming that you qualify, you can apply for a reverse mortgage – also known as a Home Equity Conversion Mortgage – with lenders who specialize in this type of loan. The amount of money that you can borrow will increase in conjunction with your age and the value of the property. With a reverse mortgage, you no longer make mortgage payments on your home or payments on the loan as long as you remain in the house. The loan and interest are due when:

• You die;
• You decide to sell or leave the home;
• The home is unoccupied for a stipulated amount of time; or
• The lender forecloses on your home.

The lender recuperates the money from the reverse mortgage when selling the home. You cannot owe more on the loan than your property is worth, but the lender will protect its investment by requiring you to keep up with property taxes, home owner’s insurance, and maintenance of the property. Failing to meet these standards allows the lender to foreclose on the property.

You have a sentimental and monetary decision to make in regards to what you should do with your engagement and wedding rings after your divorce. There are three options:

• Sell the rings;
• Keep the rings; or
• Give the rings back to your former spouse if he or she gave them to you.

Studies have found that Americans spend more than $6,000 on average for an engagement ring, and that average may be more than $8,000 in Illinois. Thus, the fate of your rings is highly valuable to you and your former spouse.

Selling the Rings

Illinois courts consider engagement and wedding rings to be gifts between spouses, which means they are separate from marital property. As the owner of the rings, you have the right to sell them and keep all of the proceeds. A premarital agreement could create an exception if the agreement states that you must either return the ring to the original purchaser or share its value as marital property. The value of your rings can still affect your division of property, even if they are not part of the marital property. The court has the discretion to compensate a spouse in the division of property if the other spouse has significant nonmarital properties.

Choosing where you will live is one of your most immediate concerns when you file for divorce but also one of the most consequential decisions you will make. The spouse who lives in the marital home will have an advantage when deciding who will keep the home during the division of property. When there are children involved, it is logical for the primary parent to stay in the home with the children. Absent children, you have more flexibility in deciding your living arrangements. Each option has its own financial and practical implications.

Keeping the Home

The instinct of many divorcees is to try to stay in the marital home and retain possession of it after divorce. The home is likely the most valuable property in your marriage and something you have greatly invested in. There is also an emotional benefit to keeping some stability in your living situation while going through a turbulent divorce. However, owning the home without your spouse can be expensive. You must consider whether you can afford: