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Public Act 100-0871
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| SB2437 Enrolled | LRB100 16507 HEP 31639 b |
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AN ACT concerning civil law.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Marriage and Dissolution of |
Marriage Act is amended by changing Section 503 as follows:
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(750 ILCS 5/503) (from Ch. 40, par. 503)
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Sec. 503. Disposition of property and debts.
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(a) For purposes of this Act, "marital property" means all |
property, including debts and other obligations, acquired
by |
either spouse subsequent to the marriage, except the following, |
which is
known as "non-marital property":
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(1) property acquired by gift, legacy or descent or |
property acquired in exchange for such property;
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(2) property acquired in exchange for property |
acquired before the
marriage;
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(3) property acquired by a spouse after a judgment of |
legal separation;
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(4) property excluded by valid agreement of the |
parties, including
a premarital agreement or a postnuptial |
agreement;
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(5) any judgment or property obtained by judgment |
awarded to a spouse
from the other spouse except, however, |
when a spouse is required to sue the other spouse in order |
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to obtain insurance coverage or otherwise recover from a |
third party and the recovery is directly related to amounts |
advanced by the marital estate, the judgment shall be |
considered marital property;
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(6) property acquired before the marriage, except as it |
relates to retirement plans that may have both marital and |
non-marital characteristics;
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(6.5) all property acquired by a spouse by
the sole use |
of non-marital property as collateral for a loan that then |
is used to acquire property
during the marriage; to the |
extent that the marital estate repays any portion of the |
loan, it shall be considered a contribution from the |
marital estate to the non-marital estate subject to |
reimbursement; |
(7) the increase in value of non-marital property, |
irrespective of whether the
increase results from a |
contribution of marital property, non-marital property,
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the personal effort of a spouse, or otherwise, subject to |
the right of
reimbursement provided in subsection (c) of |
this Section; and
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(8) income from property acquired by a method listed in |
paragraphs (1)
through (7) of this subsection if the income |
is not attributable to the
personal effort of a spouse.
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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 |
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contemplation of marriage. |
The court shall make specific factual findings as to its |
classification of assets as marital or non-marital property, |
values, and other factual findings supporting its property |
award. |
(b)(1) For purposes of distribution of property, all |
property acquired by either spouse after the marriage and |
before a
judgment of dissolution of marriage or declaration of |
invalidity of marriage is presumed marital property. This |
presumption includes non-marital property transferred into |
some form of co-ownership
between the spouses, regardless of |
whether
title is held individually or by the spouses in some |
form of co-ownership such
as joint tenancy, tenancy in common, |
tenancy by the entirety, or community
property. The presumption |
of marital property is overcome by showing through clear and |
convincing evidence that
the property was acquired by a method |
listed in subsection (a) of this Section or was done for estate |
or tax planning purposes or for other reasons that establish |
that a transfer between spouses was not intended to be a gift.
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(2) For purposes of distribution of property pursuant to |
this Section,
all pension benefits (including pension benefits |
under the Illinois Pension
Code, defined benefit plans, defined |
contribution plans and accounts, individual retirement |
accounts, and non-qualified plans) acquired by or participated |
in by either spouse after the marriage and before a judgment of
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dissolution of marriage or legal separation or declaration of |
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invalidity of the marriage are
presumed to be marital property. |
A spouse may overcome the presumption that these pension |
benefits are marital property
by showing through clear and |
convincing evidence that the pension benefits were acquired by |
a method
listed in subsection (a) of this Section. The right to |
a division of pension
benefits in just proportions under this |
Section is enforceable under Section
1-119 of the Illinois |
Pension Code.
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The value of pension benefits in a retirement system |
subject to the Illinois
Pension Code shall be determined in |
accordance with the valuation procedures
established by the |
retirement system.
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The recognition of pension benefits as marital property and |
the division of
those benefits pursuant to a Qualified Illinois |
Domestic Relations Order shall
not be deemed to be a |
diminishment, alienation, or impairment of those
benefits. The |
division of pension benefits is an allocation of property in
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which each spouse has a species of common ownership.
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(3) For purposes of distribution of property under this |
Section, all stock
options and restricted stock or similar form |
of benefit granted to either spouse after the marriage and |
before a judgment of
dissolution of marriage or legal |
separation or declaration of invalidity of marriage, whether
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vested or non-vested or whether their value is ascertainable, |
are presumed to
be marital property. This presumption of |
marital property is overcome by a
showing that the stock |
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options or restricted stock or similar form of benefit were |
acquired by a method listed in subsection
(a) of this Section. |
The court shall allocate stock options and restricted stock or |
similar form of benefit between the
parties at the time of the |
judgment of dissolution of marriage or declaration
of |
invalidity of marriage recognizing that the value of the stock |
options and restricted stock or similar form of benefit may
not |
be then determinable and that the actual division of the |
options may not
occur until a future date. In making the |
allocation between the parties, the
court shall consider, in |
addition to the factors set forth in subsection (d) of
this |
Section, the following:
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(i) All circumstances underlying the grant of the stock |
option and restricted stock or similar form of benefit |
including
but not limited to the vesting schedule, whether |
the grant was for past, present, or future efforts, whether |
the grant is designed to promote future performance or |
employment,
or any combination thereof.
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(ii) The length of time from the grant of the option to |
the time the
option is exercisable.
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(b-5)(1) As to any existing policy of life insurance |
insuring the life of either spouse, or any interest in such |
policy, that constitutes marital property, whether whole life, |
term life, group term life, universal life, or other form of |
life
insurance policy, and whether or not the value is |
ascertainable, the court shall allocate ownership, death |
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benefits or the
right to assign death benefits, and the |
obligation for premium payments, if any, equitably between the |
parties at the
time of the judgment for dissolution or |
declaration of invalidity of marriage. |
(2) If a judgment of dissolution of marriage is entered |
after an insured has designated the insured's spouse as a |
beneficiary under a life insurance policy in force at the time |
of entry, the designation of the insured's former spouse as |
beneficiary is not effective unless: |
(A) the judgment designates the insured's former |
spouse as the beneficiary; |
(B) the insured redesignates the former spouse as the |
beneficiary after entry of the judgment; or |
(C) the former spouse is designated to receive the |
proceeds in trust for, on behalf of, or for the benefit of |
a child or a dependent of either former spouse. |
(3) If a designation is not effective under paragraph (2), |
the proceeds of the policy are payable to the named alternative |
beneficiary or, if there is not a named alternative |
beneficiary, to the estate of the insured. |
(4) An insurer that pays the proceeds of a life insurance |
policy to the beneficiary under a designation that is not |
effective under paragraph (2) is liable for payment of the |
proceeds to the person or estate provided by paragraph (3) only |
if: |
(A) before payment of the proceeds to the designated |
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beneficiary, the insurer receives written notice at the |
home office of the insurer from an interested person that |
the designation is not effective under paragraph (2); and |
(B) the insurer has not filed an interpleader. |
(5) The provisions in paragraphs (2), (3) and (4) of this |
subsection (b-5) do not apply to life insurance policies |
subject to regulation under the Employee Retirement Income |
Security Act of 1974, as amended, 29 U.S.C. 100 et seq., the |
Federal Employee Group Life Insurance Act, 5 U.S.C. 8701 et |
seq., or any other federal law that preempts the application of |
those paragraphs. |
(c) Commingled marital and non-marital property shall be |
treated in
the following manner, unless otherwise agreed by the |
spouses:
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(1)(A) If marital and non-marital property are |
commingled by one estate being contributed into the other, |
the following shall apply: |
(i) If the contributed property loses its |
identity, the contributed property transmutes to the |
estate receiving the property, subject to the |
provisions of paragraph (2) of this subsection (c). |
(ii) If the contributed property retains its |
identity, it does not transmute and remains property of |
the contributing estate. |
(B) If marital and non-marital property are commingled |
into newly acquired property resulting in a loss of |
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identity of the contributing estates, the commingled |
property shall be deemed transmuted to marital property, |
subject to the provisions of paragraph (2) of this |
subsection (c). |
(2)(A) When one estate of property makes a contribution |
to another estate of property, the contributing estate |
shall be reimbursed from the estate receiving the |
contribution notwithstanding any transmutation. No such |
reimbursement shall be made with respect to a contribution |
that is not traceable by clear and convincing evidence or |
that was a gift. The court may provide for reimbursement |
out of the marital property to be divided or by imposing a |
lien against the non-marital property that received the |
contribution. |
(B) When a spouse contributes personal effort to |
non-marital property, it shall be deemed a contribution |
from the marital estate, which shall receive reimbursement |
for the efforts if the efforts are significant and result |
in substantial appreciation to the non-marital property |
except that if the marital estate reasonably has been |
compensated for his or her efforts, it shall not be deemed |
a contribution to the marital estate and there shall be no |
reimbursement to the marital estate. The court may provide |
for reimbursement out of the marital property to be divided |
or by imposing a lien against the non-marital property |
which received the contribution.
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(d) In a proceeding for dissolution of marriage or |
declaration of invalidity
of marriage, or in a proceeding for |
disposition of property following
dissolution of marriage by a |
court that lacked personal jurisdiction over the
absent spouse |
or lacked jurisdiction to dispose of the property, the court
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shall assign each spouse's non-marital property to that spouse. |
It also shall
divide the marital property without regard to |
marital misconduct in just
proportions considering all |
relevant factors, including:
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(1) each party's contribution to the acquisition, |
preservation, or
increase or decrease in value of the |
marital or non-marital property, including
(i) any |
decrease attributable to an advance from the parties' |
marital estate under subsection (c-1)(2) of Section 501; |
(ii) the contribution of a spouse as a homemaker or to the |
family unit; and (iii) whether the contribution is after |
the commencement of a proceeding for dissolution of |
marriage or declaration of invalidity of marriage;
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(2) the dissipation by each party of the marital |
property, provided that a party's claim of dissipation is |
subject to the following conditions:
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(i) a notice of intent to claim dissipation shall |
be given no later than 60 days
before trial or 30 days |
after discovery closes, whichever is later; |
(ii) the notice of intent to claim dissipation |
shall contain, at a minimum, a date or period of time |
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during which the marriage began undergoing an |
irretrievable breakdown, an identification of the |
property dissipated, and a date or period of time |
during which the dissipation occurred; |
(iii) a certificate or service of the notice of |
intent to claim dissipation shall be filed with the |
clerk of the court and be served pursuant to applicable |
rules; |
(iv) no dissipation shall be deemed to have |
occurred prior to 3 years after the party claiming |
dissipation knew or should have known of the |
dissipation, but in no event prior to 5 years before |
the filing of the petition for dissolution of marriage; |
(3) the value of the property assigned to each spouse;
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(4) the duration of the marriage;
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(5) the relevant economic circumstances of each spouse |
when the division
of property is to become effective, |
including the desirability of awarding
the family home, or |
the right to live therein for reasonable periods, to the
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spouse having the primary residence of the children;
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(6) any obligations and rights arising from a prior |
marriage
of either party;
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(7) any prenuptial or postnuptial agreement of the |
parties;
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(8) the age, health, station, occupation, amount and |
sources of income,
vocational skills, employability, |
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estate, liabilities, and needs of each of the
parties;
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(9) the custodial provisions for any children;
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(10) whether the apportionment is in lieu of or in |
addition to
maintenance;
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(11) the reasonable opportunity of each spouse for |
future acquisition
of capital assets and income; and
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(12) the tax consequences of the property division upon |
the
respective economic circumstances of the parties.
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(e) Each spouse has a species of common ownership in the |
marital property
which vests at the time dissolution |
proceedings are commenced and continues
only during the |
pendency of the action. Any such interest in marital property
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shall not encumber that property so as to restrict its |
transfer, assignment
or conveyance by the title holder unless |
such title holder is specifically
enjoined from making such |
transfer, assignment or conveyance.
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(f) In a proceeding for dissolution of marriage or |
declaration of
invalidity of marriage or in a proceeding for |
disposition of property
following dissolution of marriage by a |
court that lacked personal
jurisdiction over the absent spouse |
or lacked jurisdiction to dispose of
the property, the court, |
in determining the value of the marital and
non-marital |
property for purposes of dividing the property, has the |
discretion to use the date of the trial or such other date as |
agreed upon by the parties, or ordered by the court within its |
discretion, for purposes of determining the value of assets or |
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property.
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(g) The court if necessary to protect and promote the best |
interests of the
children may set aside a portion of the |
jointly or separately held
estates of the parties in a separate |
fund or trust for the support,
maintenance, education, physical |
and mental health, and general welfare of any minor, dependent,
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or incompetent child of the parties. In making a determination |
under this
subsection, the court may consider, among other |
things, the conviction of a
party of any of the offenses set |
forth in Section 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, |
12-3.3, 12-4, 12-4.1,
12-4.2, 12-4.3,
12-13, 12-14, 12-14.1, |
12-15, or 12-16, or Section 12-3.05 except for subdivision |
(a)(4) or (g)(1), of the Criminal Code of 1961 or the Criminal |
Code of 2012 if the
victim is a
child of one or both of the |
parties, and there is a need for, and cost of,
care, healing |
and counseling for the child who is the victim of the crime.
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(h) Unless specifically directed by a reviewing court, or |
upon good
cause shown, the court shall not on remand consider |
any increase or
decrease in the value of any "marital" or |
"non-marital" property occurring
since the assessment of such |
property at the original trial or hearing, but
shall use only |
that assessment made at the original trial or hearing.
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(i) The court may make such judgments affecting the marital |
property
as may be just and may enforce such judgments by |
ordering a sale of marital
property, with proceeds therefrom to |
be applied as determined by the court.
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(j) After proofs have closed in the final hearing on all |
other issues
between the parties (or in conjunction with the |
final hearing, if all parties
so stipulate) and before judgment |
is entered, a party's petition for
contribution to fees and |
costs incurred in the proceeding shall be heard and
decided, in |
accordance with the following provisions:
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(1) A petition for contribution, if not filed before |
the final hearing
on other issues between the parties, |
shall be filed no later than 14 days after
the closing of |
proofs in the final hearing or within such other period as |
the
court orders.
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(2) Any award of contribution to one party from the |
other party shall be
based on the criteria for division of |
marital property under this Section 503
and, if maintenance |
has been awarded, on the criteria for an award of
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maintenance under Section 504.
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(3) The filing of a petition for contribution shall not |
be deemed to
constitute a waiver of the attorney-client |
privilege between the petitioning
party and current or |
former counsel; and such a waiver shall not constitute a
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prerequisite to a hearing for contribution. If either |
party's presentation on
contribution, however, includes |
evidence within the scope of the
attorney-client |
privilege, the disclosure or disclosures shall be narrowly
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construed and shall not be deemed by the court to |
constitute a general waiver
of the privilege as to matters |
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beyond the scope of the presentation.
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(4) No finding on which a contribution award is based |
or denied shall be
asserted against counsel or former |
counsel for purposes of any hearing under
subsection (c) or |
(e) of Section 508.
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(5) A contribution award (payable to either the |
petitioning
party or the party's counsel, or jointly, as |
the court determines) may be in
the form of either a set |
dollar amount or a percentage of fees and costs (or a
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portion of fees and costs) to be subsequently agreed upon |
by the petitioning
party and counsel or, alternatively, |
thereafter determined in a hearing
pursuant to subsection |
(c) of Section 508 or previously or thereafter
determined |
in an independent proceeding under subsection (e) of |
Section
508.
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(6) The changes to this Section 503 made by this |
amendatory Act of 1996
apply to cases pending on or after |
June 1, 1997, except as otherwise provided
in Section 508.
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(k) In determining the value of assets or property under |
this Section, the court shall employ a fair market value |
standard. The date of valuation for the purposes of division of |
assets shall be the date of trial or such other date as agreed |
by the parties or ordered by the court, within its discretion. |
If the court grants a petition brought under Section 2-1401 of |
the Code of Civil Procedure, then the court has the discretion |
to use the date of the trial or such other date as agreed upon |
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by the parties, or ordered by the court within its discretion, |
for purposes of determining the value of assets or property. |
(l) The court may seek the advice of financial experts or |
other professionals, whether or not employed by the court on a |
regular basis. The advice given shall be in writing and made |
available by the court to counsel. Counsel may examine as a |
witness any professional consulted by the court designated as |
the court's witness. Professional personnel consulted by the |
court are subject to subpoena for the purposes of discovery, |
trial, or both. The court shall allocate the costs and fees of |
those professional personnel between the parties based upon the |
financial ability of each party and any other criteria the |
court considers appropriate, and the allocation is subject to |
reallocation under subsection (a) of Section 508. Upon the |
request of any party or upon the court's own motion, the court |
may conduct a hearing as to the reasonableness of those fees |
and costs. |
(m) The changes made to this Section by Public Act 97-941 |
apply only to petitions for dissolution of marriage filed on or |
after January 1, 2013 (the effective date of Public Act |
97-941). |
(n) If the court finds that a companion animal of the |
parties is a marital asset, it shall allocate the sole or joint |
ownership of and responsibility for a companion animal of the |
parties. In issuing an order under this subsection, the court |
shall take into consideration the well-being of the companion |