Home Improvements And Divorce In Illinois
A house is often a married couple’s greatest asset. How they treated that house during the course of their marriage will determine the value of the house and the subsequent allocation of that value during an Illinois divorce. Home improvements can be a factor in determining the equitable distribution of marital assets in an Illinois divorce.
Is The House Marital?
Before any questions about home improvements are asked, one first must determine if the house, itself, has a marital or non-marital character.
“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.” 750 ILCS 5/503
If the house was purchased during the marriage, no matter whose name the property is in, the house will be deemed a marital asset.
“‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
“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.” 750 ILCS 5/503(b)
Once the house is determined to be marital, the house and/or its value may be divided by an Illinois divorce court.
Illinois divorce courts “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:
(1) each party’s contribution to the acquisition, preservation, or increase or decrease in value of the marital or non-marital property” 750 ILCS 5/503(d)(1)
The party who did or paid for the home improvements could certainly make the argument that they made a “contribution to the…preservation, or increase…in value of the marital…property.”
“Just proportions does not mean strict equality but only an equitable division.” In re Marriage of Albrecht, 266 Ill. App. 3d 399, 402 (Ill. App. Ct. 1994)
If an Illinois divorce judge does award extra home equity due to home improvements, the judge will not count the screws, paint buckets and labor hours. The judge will merely consider what is fair…which is always a round number or proportion. “[E]quitable division depends on more than merely an analysis of dollars and cents.” In re Marriage of Abu-Hashim, 2014 IL App (1st) 122997, ¶ 22, 14 N.E.3d 524.
But the counterargument to that is that the money or labor for the home improvements (if earned or done during the course of the marriage) is also marital…so it’s a wash.
Don’t let that dissuade you from making an argument for inequitable division of the marital assets based on home improvements. It costs nothing (well, almost nothing after attorney’s fees) to make an argument. “[E]ach case rests on its own facts” In re Marriage of Jones, 187 Ill. App. 3d 206, 222 (Ill. App. Ct. 1989)
While numerous, quality improvements to a house are admirable, Illinois courts will not let the handyman keep his own work merely for its own sake. The only times Illinois courts let a spouse keep the entire house without forcing a sale is when one spouse can afford to maintain the property and the other cannot or if the children of the marriage would be better served by the primary residential parent keeping the house.
Illinois courts can consider the “desirability of awarding the family home, or the right to live therein for reasonable periods, to the spouse having the primary residence of the children” 750 ILCS 5/503(d)(5)
If The House Is Non-Marital In An Illinois Divorce
In an Illinois divorce, a house can be considered non-marital property for a variety of reasons:
A non-marital house can be “property acquired before the marriage” 750 ILCS 5/503(a)(3), “property acquired in exchange for property acquired before the marriage” 750 ILCS 5/503(a)(3), “property acquired by gift, legacy or descent or property acquired in exchange for such property” 750 ILCS 5/503(a)(1), and post-marital house purchases which are “property excluded by valid agreement of the parties, including a premarital agreement or a postnuptial agreement” 750 ILCS 5/503(a)(4)
If there’s any confusion as to whether the house is marital or non-marital…the house will be deemed marital property.
“Any doubt as to the nature of the property must be resolved in favor of the finding that it is marital” In re Marriage of Steel, 2011 IL App (2d) 080974
But, if the house is deemed non-marital, that house (and all the house’s value) will remain with the party who owns the house.
“[T]he court shall assign each spouse’s non-marital property to that spouse.” 750 ILCS 5/503(d)
If a house is deemed non-marital, can the handyman or home-improvement payor claw back their contribution to the house in an Illinois divorce?
The increase in a non-marital house’s value will be deemed non-marital DESPITE any marital home improvements.
“[T]he increase in value of non-marital property, irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effort of a spouse” 750 ILCS 5/503(7)
This seems extreme…and it is. So, there’s a concept called commingling that can be considered in the case of home improvements which appends 750 ILCS 5/503(7) with “subject to the right of reimbursement provided in subsection (c) of this Section” 750 ILCS 5/503(7)
“If marital and non-marital property are commingled into newly acquired property resulting in a loss of 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).” 750 ILCS 5/503(c)(1)(b)
Does this mean that every home improvement from a spouse turns non-marital property into marital property? No.
Home improvements to a non-marital house are simply reimbursed to the marital estate. “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.” 750 ILCS 5/503(c)(2)(A)
“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” 750 ILCS 5/503(c)(2)(B)
Please be advised that the reimbursement is to the marital estate not the individual. So, if you made $ 50,000 of improvements to a non-marital house, you would only be reimbursed, individually for your share of that marital contribution (probably half or $25,000).
Furthermore, those improvements to a non-marital house must be proven with specific facts. “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.” 750 ILCS 5/503(c)(2)(A)
Proof of improvements means receipts for contractors paid from the marital estate or specific descriptions and pictures of the improvements if done by one of the spouses. There needs to be “evidence that any money, property or service beyond the duties imposed by the marital relationship contributed in any way towards the acquisition or improvement of [a] property.” Debrey v. Debrey, 270 NE 2d 43 – Ill: Appellate Court, 4th Dist. 1971
Women always lament that they “want a man who is handy around the house.” This is no great comfort to the men who prefer to spend their weekends writing legal articles. But, perhaps, those of us who are inept at home improvement will realize that our efforts were not wasted if there’s a non-marital home and subsequent divorce.
Is A Mortgage Payment On A Non-Marital House A Home Improvement In Illinois?
Money is fungible. A dollar that pays for a contractor to build a bonus room is the same as a dollar which pays a mortgage payment…which purchases a slice of the equity in the home.
In Illinois, mortgage payments from spouses who do not own a non-marital home are considered spent and gone.
“[A] marital estate is not entitled to reimbursement for mortgage payments toward nonmarital property when the marital estate has already been compensated for its contributions by use of the property during marriage.” In re Marriage of Crook, 813 NE 2d 198 – Ill: Supreme Court 2004
The theory is that a mortgage payment is no contribution at all…because the spouse would have had to spend that money on someplace to live. So, living in the house is their reimbursement for the mortgage payment.
“[T]he parties benefited from living in the house for a substantial period of time, [so] the court could reasonably have found that the marital estate had already been compensated for its contributions.” In re Marriage of Snow, 660 NE 2d 1347 – Ill: Appellate Court, 4th Dist. 1996
It is no secret that home renovation projects are a cause of great stress during a marriage. Sadly, as you’ve read, they can be a cause of great stress after the marriage as well. If you’d like to learn more about how a home improvement project will affect your divorce, contact my Chicago, Illinois family law firm to speak with an experienced Chicago, Illinois divorce attorney.
Article Source : rdklegal.com/home-improveme...
