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1 | | AN ACT concerning civil law.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Marriage and Dissolution of |
5 | | Marriage Act is amended by changing Section 503 as follows:
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6 | | (750 ILCS 5/503) (from Ch. 40, par. 503)
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7 | | Sec. 503. Disposition of property and debts.
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8 | | (a) For purposes of this Act, "marital property" means all |
9 | | property, including debts and other obligations, acquired
by |
10 | | either spouse subsequent to the marriage, except the following, |
11 | | which is
known as "non-marital property":
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12 | | (1) property acquired by gift, legacy or descent or |
13 | | property acquired in exchange for such property;
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14 | | (2) property acquired in exchange for property |
15 | | acquired before the
marriage;
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16 | | (3) property acquired by a spouse after a judgment of |
17 | | legal separation;
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18 | | (4) property excluded by valid agreement of the |
19 | | parties, including
a premarital agreement or a postnuptial |
20 | | agreement;
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21 | | (5) any judgment or property obtained by judgment |
22 | | awarded to a spouse
from the other spouse except, however, |
23 | | when a spouse is required to sue the other spouse in order |
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1 | | to obtain insurance coverage or otherwise recover from a |
2 | | third party and the recovery is directly related to amounts |
3 | | advanced by the marital estate, the judgment shall be |
4 | | considered marital property;
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5 | | (6) property acquired before the marriage, except as it |
6 | | relates to retirement plans that may have both marital and |
7 | | non-marital characteristics;
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8 | | (6.5) all property acquired by a spouse by
the sole use |
9 | | of non-marital property as collateral for a loan that then |
10 | | is used to acquire property
during the marriage; to the |
11 | | extent that the marital estate repays any portion of the |
12 | | loan, it shall be considered a contribution from the |
13 | | marital estate to the non-marital estate subject to |
14 | | reimbursement; |
15 | | (7) the increase in value of non-marital property, |
16 | | irrespective of whether the
increase results from a |
17 | | contribution of marital property, non-marital property,
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18 | | the personal effort of a spouse, or otherwise, subject to |
19 | | the right of
reimbursement provided in subsection (c) of |
20 | | this Section; and
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21 | | (8) income from property acquired by a method listed in |
22 | | paragraphs (1)
through (7) of this subsection if the income |
23 | | is not attributable to the
personal effort of a spouse.
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24 | | Property acquired prior to a marriage that would otherwise |
25 | | be non-marital property shall not be deemed to be marital |
26 | | property solely because the property was acquired in |
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1 | | contemplation of marriage. |
2 | | The court shall make specific factual findings as to its |
3 | | classification of assets as marital or non-marital property, |
4 | | values, and other factual findings supporting its property |
5 | | award. |
6 | | (b)(1) For purposes of distribution of property, all |
7 | | property acquired by either spouse after the marriage and |
8 | | before a
judgment of dissolution of marriage or declaration of |
9 | | invalidity of marriage is presumed marital property. This |
10 | | presumption includes non-marital property transferred into |
11 | | some form of co-ownership
between the spouses, regardless of |
12 | | whether
title is held individually or by the spouses in some |
13 | | form of co-ownership such
as joint tenancy, tenancy in common, |
14 | | tenancy by the entirety, or community
property. The presumption |
15 | | of marital property is overcome by showing through clear and |
16 | | convincing evidence that
the property was acquired by a method |
17 | | listed in subsection (a) of this Section or was done for estate |
18 | | or tax planning purposes or for other reasons that establish |
19 | | that a transfer between spouses was not intended to be a gift.
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20 | | (2) For purposes of distribution of property pursuant to |
21 | | this Section,
all pension benefits (including pension benefits |
22 | | under the Illinois Pension
Code, defined benefit plans, defined |
23 | | contribution plans and accounts, individual retirement |
24 | | accounts, and non-qualified plans) acquired by or participated |
25 | | in by either spouse after the marriage and before a judgment of
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26 | | dissolution of marriage or legal separation or declaration of |
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1 | | invalidity of the marriage are
presumed to be marital property. |
2 | | A spouse may overcome the presumption that these pension |
3 | | benefits are marital property
by showing through clear and |
4 | | convincing evidence that the pension benefits were acquired by |
5 | | a method
listed in subsection (a) of this Section. The right to |
6 | | a division of pension
benefits in just proportions under this |
7 | | Section is enforceable under Section
1-119 of the Illinois |
8 | | Pension Code.
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9 | | The value of pension benefits in a retirement system |
10 | | subject to the Illinois
Pension Code shall be determined in |
11 | | accordance with the valuation procedures
established by the |
12 | | retirement system.
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13 | | The recognition of pension benefits as marital property and |
14 | | the division of
those benefits pursuant to a Qualified Illinois |
15 | | Domestic Relations Order shall
not be deemed to be a |
16 | | diminishment, alienation, or impairment of those
benefits. The |
17 | | division of pension benefits is an allocation of property in
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18 | | which each spouse has a species of common ownership.
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19 | | (3) For purposes of distribution of property under this |
20 | | Section, all stock
options and restricted stock or similar form |
21 | | of benefit granted to either spouse after the marriage and |
22 | | before a judgment of
dissolution of marriage or legal |
23 | | separation or declaration of invalidity of marriage, whether
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24 | | vested or non-vested or whether their value is ascertainable, |
25 | | are presumed to
be marital property. This presumption of |
26 | | marital property is overcome by a
showing that the stock |
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1 | | options or restricted stock or similar form of benefit were |
2 | | acquired by a method listed in subsection
(a) of this Section. |
3 | | The court shall allocate stock options and restricted stock or |
4 | | similar form of benefit between the
parties at the time of the |
5 | | judgment of dissolution of marriage or declaration
of |
6 | | invalidity of marriage recognizing that the value of the stock |
7 | | options and restricted stock or similar form of benefit may
not |
8 | | be then determinable and that the actual division of the |
9 | | options may not
occur until a future date. In making the |
10 | | allocation between the parties, the
court shall consider, in |
11 | | addition to the factors set forth in subsection (d) of
this |
12 | | Section, the following:
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13 | | (i) All circumstances underlying the grant of the stock |
14 | | option and restricted stock or similar form of benefit |
15 | | including
but not limited to the vesting schedule, whether |
16 | | the grant was for past, present, or future efforts, whether |
17 | | the grant is designed to promote future performance or |
18 | | employment,
or any combination thereof.
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19 | | (ii) The length of time from the grant of the option to |
20 | | the time the
option is exercisable.
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21 | | (b-5) (1) As to any existing policy of life insurance |
22 | | insuring the life of either spouse, or any interest in such |
23 | | policy, that constitutes marital property, whether whole life, |
24 | | term life, group term life, universal life, or other form of |
25 | | life
insurance policy, and whether or not the value is |
26 | | ascertainable, the court shall allocate ownership, death |
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1 | | benefits or the
right to assign death benefits, and the |
2 | | obligation for premium payments, if any, equitably between the |
3 | | parties at the
time of the judgment for dissolution or |
4 | | declaration of invalidity of marriage. |
5 | | (2) If a judgment of dissolution of marriage is entered |
6 | | after an insured has designated the insured's spouse as a |
7 | | beneficiary under a life insurance policy in force at the time |
8 | | of entry, the designation of the insured's former spouse as |
9 | | beneficiary is not effective unless: |
10 | | (A) the judgment designates the insured's former |
11 | | spouse as the beneficiary; |
12 | | (B) the insured redesignates the former spouse as the |
13 | | beneficiary after entry of the judgment; or |
14 | | (C) the former spouse is designated to receive the |
15 | | proceeds in trust for, on behalf of, or for the benefit of |
16 | | a child or a dependent of either former spouse. |
17 | | (3) If a designation is not effective under paragraph (2), |
18 | | the proceeds of the policy are payable to the named alternative |
19 | | beneficiary or, if there is not a named alternative |
20 | | beneficiary, to the estate of the insured. |
21 | | (4) An insurer that pays the proceeds of a life insurance |
22 | | policy to the beneficiary under a designation that is not |
23 | | effective under paragraph (2) is liable for payment of the |
24 | | proceeds to the person or estate provided by paragraph (3) only |
25 | | if: |
26 | | (A) before payment of the proceeds to the designated |
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1 | | beneficiary, the insurer receives written notice at the |
2 | | home office of the insurer from an interested person that |
3 | | the designation is not effective under paragraph (2); and |
4 | | (B) the insurer has not filed an interpleader. |
5 | | (5) The provisions in paragraphs (2), (3) and (4) of this |
6 | | subsection (b-5) do not apply to life insurance policies |
7 | | subject to regulation under the Employee Retirement Income |
8 | | Security Act of 1974, as amended, 29 U.S.C. 100 et seq., the |
9 | | Federal Employee Group Life Insurance Act, 5 U.S.C. 8701 et |
10 | | seq., or any other federal law that preempts the application of |
11 | | those paragraphs. |
12 | | (c) Commingled marital and non-marital property shall be |
13 | | treated in
the following manner, unless otherwise agreed by the |
14 | | spouses:
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15 | | (1)(A) If marital and non-marital property are |
16 | | commingled by one estate being contributed into the other, |
17 | | the following shall apply: |
18 | | (i) If the contributed property loses its |
19 | | identity, the contributed property transmutes to the |
20 | | estate receiving the property, subject to the |
21 | | provisions of paragraph (2) of this subsection (c). |
22 | | (ii) If the contributed property retains its |
23 | | identity, it does not transmute and remains property of |
24 | | the contributing estate. |
25 | | (B) If marital and non-marital property are commingled |
26 | | into newly acquired property resulting in a loss of |
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1 | | identity of the contributing estates, the commingled |
2 | | property shall be deemed transmuted to marital property, |
3 | | subject to the provisions of paragraph (2) of this |
4 | | subsection (c). |
5 | | (2)(A) When one estate of property makes a contribution |
6 | | to another estate of property, the contributing estate |
7 | | shall be reimbursed from the estate receiving the |
8 | | contribution notwithstanding any transmutation. No such |
9 | | reimbursement shall be made with respect to a contribution |
10 | | that is not traceable by clear and convincing evidence or |
11 | | that was a gift. The court may provide for reimbursement |
12 | | out of the marital property to be divided or by imposing a |
13 | | lien against the non-marital property that received the |
14 | | contribution. |
15 | | (B) When a spouse contributes personal effort to |
16 | | non-marital property, it shall be deemed a contribution |
17 | | from the marital estate, which shall receive reimbursement |
18 | | for the efforts if the efforts are significant and result |
19 | | in substantial appreciation to the non-marital property |
20 | | except that if the marital estate reasonably has been |
21 | | compensated for his or her efforts, it shall not be deemed |
22 | | a contribution to the marital estate and there shall be no |
23 | | reimbursement to the marital estate. The court may provide |
24 | | for reimbursement out of the marital property to be divided |
25 | | or by imposing a lien against the non-marital property |
26 | | which received the contribution.
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1 | | (d) In a proceeding for dissolution of marriage or |
2 | | declaration of invalidity
of marriage, or in a proceeding for |
3 | | disposition of property following
dissolution of marriage by a |
4 | | court that lacked personal jurisdiction over the
absent spouse |
5 | | or lacked jurisdiction to dispose of the property, the court
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6 | | shall assign each spouse's non-marital property to that spouse. |
7 | | It also shall
divide the marital property without regard to |
8 | | marital misconduct in just
proportions considering all |
9 | | relevant factors, including:
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10 | | (1) each party's contribution to the acquisition, |
11 | | preservation, or
increase or decrease in value of the |
12 | | marital or non-marital property, including
(i) any |
13 | | decrease attributable to an advance from the parties' |
14 | | marital estate under subsection (c-1)(2) of Section 501; |
15 | | (ii) the contribution of a spouse as a homemaker or to the |
16 | | family unit; and (iii) whether the contribution is after |
17 | | the commencement of a proceeding for dissolution of |
18 | | marriage or declaration of invalidity of marriage;
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19 | | (2) the dissipation by each party of the marital |
20 | | property, provided that a party's claim of dissipation is |
21 | | subject to the following conditions:
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22 | | (i) a notice of intent to claim dissipation shall |
23 | | be given no later than 60 days
before trial or 30 days |
24 | | after discovery closes, whichever is later; |
25 | | (ii) the notice of intent to claim dissipation |
26 | | shall contain, at a minimum, a date or period of time |
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1 | | during which the marriage began undergoing an |
2 | | irretrievable breakdown, an identification of the |
3 | | property dissipated, and a date or period of time |
4 | | during which the dissipation occurred; |
5 | | (iii) a certificate or service of the notice of |
6 | | intent to claim dissipation shall be filed with the |
7 | | clerk of the court and be served pursuant to applicable |
8 | | rules; |
9 | | (iv) no dissipation shall be deemed to have |
10 | | occurred prior to 3 years after the party claiming |
11 | | dissipation knew or should have known of the |
12 | | dissipation, but in no event prior to 5 years before |
13 | | the filing of the petition for dissolution of marriage; |
14 | | (3) the value of the property assigned to each spouse;
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15 | | (4) the duration of the marriage;
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16 | | (5) the relevant economic circumstances of each spouse |
17 | | when the division
of property is to become effective, |
18 | | including the desirability of awarding
the family home, or |
19 | | the right to live therein for reasonable periods, to the
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20 | | spouse having the primary residence of the children;
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21 | | (6) any obligations and rights arising from a prior |
22 | | marriage
of either party;
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23 | | (7) any prenuptial or postnuptial agreement of the |
24 | | parties;
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25 | | (8) the age, health, station, occupation, amount and |
26 | | sources of income,
vocational skills, employability, |
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1 | | estate, liabilities, and needs of each of the
parties;
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2 | | (9) the custodial provisions for any children;
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3 | | (10) whether the apportionment is in lieu of or in |
4 | | addition to
maintenance;
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5 | | (11) the reasonable opportunity of each spouse for |
6 | | future acquisition
of capital assets and income; and
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7 | | (12) the tax consequences of the property division upon |
8 | | the
respective economic circumstances of the parties.
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9 | | (e) Each spouse has a species of common ownership in the |
10 | | marital property
which vests at the time dissolution |
11 | | proceedings are commenced and continues
only during the |
12 | | pendency of the action. Any such interest in marital property
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13 | | shall not encumber that property so as to restrict its |
14 | | transfer, assignment
or conveyance by the title holder unless |
15 | | such title holder is specifically
enjoined from making such |
16 | | transfer, assignment or conveyance.
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17 | | (f) In a proceeding for dissolution of marriage or |
18 | | declaration of
invalidity of marriage or in a proceeding for |
19 | | disposition of property
following dissolution of marriage by a |
20 | | court that lacked personal
jurisdiction over the absent spouse |
21 | | or lacked jurisdiction to dispose of
the property, the court, |
22 | | in determining the value of the marital and
non-marital |
23 | | property for purposes of dividing the property, has the |
24 | | discretion to use the date of the trial or such other date as |
25 | | agreed upon by the parties, or ordered by the court within its |
26 | | discretion, for purposes of determining the value of assets or |
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1 | | property.
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2 | | (g) The court if necessary to protect and promote the best |
3 | | interests of the
children may set aside a portion of the |
4 | | jointly or separately held
estates of the parties in a separate |
5 | | fund or trust for the support,
maintenance, education, physical |
6 | | and mental health, and general welfare of any minor, dependent,
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7 | | or incompetent child of the parties. In making a determination |
8 | | under this
subsection, the court may consider, among other |
9 | | things, the conviction of a
party of any of the offenses set |
10 | | forth in Section 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60, |
11 | | 12-3.3, 12-4, 12-4.1,
12-4.2, 12-4.3,
12-13, 12-14, 12-14.1, |
12 | | 12-15, or 12-16, or Section 12-3.05 except for subdivision |
13 | | (a)(4) or (g)(1), of the Criminal Code of 1961 or the Criminal |
14 | | Code of 2012 if the
victim is a
child of one or both of the |
15 | | parties, and there is a need for, and cost of,
care, healing |
16 | | and counseling for the child who is the victim of the crime.
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17 | | (h) Unless specifically directed by a reviewing court, or |
18 | | upon good
cause shown, the court shall not on remand consider |
19 | | any increase or
decrease in the value of any "marital" or |
20 | | "non-marital" property occurring
since the assessment of such |
21 | | property at the original trial or hearing, but
shall use only |
22 | | that assessment made at the original trial or hearing.
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23 | | (i) The court may make such judgments affecting the marital |
24 | | property
as may be just and may enforce such judgments by |
25 | | ordering a sale of marital
property, with proceeds therefrom to |
26 | | be applied as determined by the court.
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1 | | (j) After proofs have closed in the final hearing on all |
2 | | other issues
between the parties (or in conjunction with the |
3 | | final hearing, if all parties
so stipulate) and before judgment |
4 | | is entered, a party's petition for
contribution to fees and |
5 | | costs incurred in the proceeding shall be heard and
decided, in |
6 | | accordance with the following provisions:
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7 | | (1) A petition for contribution, if not filed before |
8 | | the final hearing
on other issues between the parties, |
9 | | shall be filed no later than 14 days after
the closing of |
10 | | proofs in the final hearing or within such other period as |
11 | | the
court orders.
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12 | | (2) Any award of contribution to one party from the |
13 | | other party shall be
based on the criteria for division of |
14 | | marital property under this Section 503
and, if maintenance |
15 | | has been awarded, on the criteria for an award of
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16 | | maintenance under Section 504.
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17 | | (3) The filing of a petition for contribution shall not |
18 | | be deemed to
constitute a waiver of the attorney-client |
19 | | privilege between the petitioning
party and current or |
20 | | former counsel; and such a waiver shall not constitute a
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21 | | prerequisite to a hearing for contribution. If either |
22 | | party's presentation on
contribution, however, includes |
23 | | evidence within the scope of the
attorney-client |
24 | | privilege, the disclosure or disclosures shall be narrowly
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25 | | construed and shall not be deemed by the court to |
26 | | constitute a general waiver
of the privilege as to matters |
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1 | | beyond the scope of the presentation.
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2 | | (4) No finding on which a contribution award is based |
3 | | or denied shall be
asserted against counsel or former |
4 | | counsel for purposes of any hearing under
subsection (c) or |
5 | | (e) of Section 508.
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6 | | (5) A contribution award (payable to either the |
7 | | petitioning
party or the party's counsel, or jointly, as |
8 | | the court determines) may be in
the form of either a set |
9 | | dollar amount or a percentage of fees and costs (or a
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10 | | portion of fees and costs) to be subsequently agreed upon |
11 | | by the petitioning
party and counsel or, alternatively, |
12 | | thereafter determined in a hearing
pursuant to subsection |
13 | | (c) of Section 508 or previously or thereafter
determined |
14 | | in an independent proceeding under subsection (e) of |
15 | | Section
508.
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16 | | (6) The changes to this Section 503 made by this |
17 | | amendatory Act of 1996
apply to cases pending on or after |
18 | | June 1, 1997, except as otherwise provided
in Section 508.
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19 | | (k) In determining the value of assets or property under |
20 | | this Section, the court shall employ a fair market value |
21 | | standard. The date of valuation for the purposes of division of |
22 | | assets shall be the date of trial or such other date as agreed |
23 | | by the parties or ordered by the court, within its discretion. |
24 | | If the court grants a petition brought under Section 2-1401 of |
25 | | the Code of Civil Procedure, then the court has the discretion |
26 | | to use the date of the trial or such other date as agreed upon |
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1 | | by the parties, or ordered by the court within its discretion, |
2 | | for purposes of determining the value of assets or property. |
3 | | (l) The court may seek the advice of financial experts or |
4 | | other professionals, whether or not employed by the court on a |
5 | | regular basis. The advice given shall be in writing and made |
6 | | available by the court to counsel. Counsel may examine as a |
7 | | witness any professional consulted by the court designated as |
8 | | the court's witness. Professional personnel consulted by the |
9 | | court are subject to subpoena for the purposes of discovery, |
10 | | trial, or both. The court shall allocate the costs and fees of |
11 | | those professional personnel between the parties based upon the |
12 | | financial ability of each party and any other criteria the |
13 | | court considers appropriate, and the allocation is subject to |
14 | | reallocation under subsection (a) of Section 508. Upon the |
15 | | request of any party or upon the court's own motion, the court |
16 | | may conduct a hearing as to the reasonableness of those fees |
17 | | and costs. |
18 | | (m) The changes made to this Section by Public Act 97-941 |
19 | | apply only to petitions for dissolution of marriage filed on or |
20 | | after January 1, 2013 (the effective date of Public Act |
21 | | 97-941). |
22 | | (n) If the court finds that a companion animal of the |
23 | | parties is a marital asset, it shall allocate the sole or joint |
24 | | ownership of and responsibility for a companion animal of the |
25 | | parties. In issuing an order under this subsection, the court |
26 | | shall take into consideration the well-being of the companion |