Real Estate in Divorce – The Family Home, Part 1

 Part 1 of 2

Lyn C. Conniff & Elizabeth A. Teague

What will happen with the house? This question can cause a high level of anxiety, stress and, potentially, conflict during a divorce. The answer is not always clear-cut and depends on a number of factors.

Illinois law covers the “Disposition of Property” which means that it governs the allocation and division of all property owned by spouses going through a divorce.

When was the home purchased?

If the home was purchased during the marriage with funds earned during the marriage, then the home is considered marital property and is subject to being divided between the parties.

If the home was purchased prior to the marriage, then the home will be considered non-marital property. Does this mean that a home purchased by one spouse prior to marriage is automatically non-marital and, therefore, automatically awarded to the purchasing spouse? Not necessarily. If one spouse purchased the home prior to the marriage, but in contemplation of living in the home after marriage, then it is possible for the home to be considered marital property.

Whose name is on the title?

Another factor which can weigh in the decision of whether or not the home is marital property is whose name is on the title to the home.

If the home was purchased during the marriage with marital funds, then it is marital property, and it does not matter whose name is on the title to the home. If the home was purchased prior to the marriage, but was put in both spouses’ names, then that can be one factor weighing in favor of causing a home which was otherwise non-marital property to be marital property.

Whose money was used to purchase the home?

What is the effect of the down payment coming from only one spouse? This can happen when only one spouse is working outside of the home or if one spouse receives an inheritance which is then used to purchase the home. Does the provider of the down payment then dictate who will receive the marital home in a divorce? The answer is no.  Just because one spouse contributed the down-payment to purchase the home does not automatically determine who will be awarded the home in a divorce.

If the home was purchased with money earned during the marriage, even if earned by only one spouse, then the home is marital property. If one spouse used funds accrued prior to the marriage to purchase a home during the marriage, then the marital home will be considered a marital asset.

Similarly, if one spouse uses an inheritance for a down-payment, the marital home will be considered a marital asset.  An inheritance received by a spouse, whether received prior to the marriage or during the marriage, is considered to be that spouse’s non-marital property.  However, when an inheritance is used as a down payment towards a home purchased during the marriage, that inheritance might be considered to have been converted into a marital asset.

The issue, however, is not that clear.  Courts have determined, under certain circumstances, that, although the home is considered marital property, the non-marital funds (an inheritance or funds in existence prior to the marriage) contributed to the marital home may be reimbursed to the contributing spouse.

No one factor will be decisive in determining whether a home is marital or non-marital property. A court will look at many factors, including when the home was purchased, whose name is on the title, where the money came from to purchase the home, and when the money was contributed. Once it is determined whether the home is non-marital (and therefore awarded to one spouse), or marital (and therefore an asset to be divided between the spouses) then the parties can consider their options for the house in the divorce.

Contact us today at Conniff Law Offices and we can help you determine what your choices are in unravelling this complex issue.

For a review of options for your home in a divorce, please see our next blog, Real Estate in Divorce – The Family Home, Part 2.

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