When a married couple decides to divorce, they must divide their assets and debts between them. For this division of property, Illinois law follows a model known as “equitable distribution,” which, put simply, requires the division to meet guidelines of fairness. In some cases, a 50-50 split may meet everyone’s needs, but equitable distribution is usually a lot more complicated than that. It requires a lot of negotiation.
It’s important to note that equitable distribution calls for the division of marital property. This means before you can start dividing the property between the soon-to-be ex-spouses, you must divide the marital property from any separate property. Generally, assets and debts acquired during the marriage are considered marital property. Separate property consists simply of assets and debts acquired before the marriage. However, there are some exceptions, and once you get into the details, there are types of property that fit in both categories. These can be difficult to divide.
Illinois law lists just eight types of separate property that can be acquired during the marriage. These include inheritances and gifts given to just one of the spouses during the marriage, and property acquired after a legal separation and before divorce.
More complicated are the mixed-category items such as retirement accounts, which can be partly separate and partly marital property. Since they are partly marital property, they must be divided pursuant to a divorce. However, most retirement accounts trigger taxes and other penalties when they are withdrawn before a set age or milestone, and so a divorcing couple can’t simply take out the money and split it without seriously damaging the value of the account. Skilled attorneys help their clients get around this problem through Qualified Domestic Relations Orders and other complicated instruments.