SB2437 EngrossedLRB100 16507 HEP 31639 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Marriage and Dissolution of
5Marriage Act is amended by changing Section 503 as follows:
 
6    (750 ILCS 5/503)  (from Ch. 40, par. 503)
7    Sec. 503. Disposition of property and debts.
8    (a) For purposes of this Act, "marital property" means all
9property, including debts and other obligations, acquired by
10either spouse subsequent to the marriage, except the following,
11which is known as "non-marital property":
12        (1) property acquired by gift, legacy or descent or
13    property acquired in exchange for such property;
14        (2) property acquired in exchange for property
15    acquired before the marriage;
16        (3) property acquired by a spouse after a judgment of
17    legal separation;
18        (4) property excluded by valid agreement of the
19    parties, including a premarital agreement or a postnuptial
20    agreement;
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;
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;
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,
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
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.
24    Property acquired prior to a marriage that would otherwise
25be non-marital property shall not be deemed to be marital
26property solely because the property was acquired in

 

 

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1contemplation of marriage.
2    The court shall make specific factual findings as to its
3classification of assets as marital or non-marital property,
4values, and other factual findings supporting its property
5award.
6    (b)(1) For purposes of distribution of property, all
7property acquired by either spouse after the marriage and
8before a judgment of dissolution of marriage or declaration of
9invalidity of marriage is presumed marital property. This
10presumption includes non-marital property transferred into
11some form of co-ownership between the spouses, regardless of
12whether title is held individually or by the spouses in some
13form of co-ownership such as joint tenancy, tenancy in common,
14tenancy by the entirety, or community property. The presumption
15of marital property is overcome by showing through clear and
16convincing evidence that the property was acquired by a method
17listed in subsection (a) of this Section or was done for estate
18or tax planning purposes or for other reasons that establish
19that a transfer between spouses was not intended to be a gift.
20    (2) For purposes of distribution of property pursuant to
21this Section, all pension benefits (including pension benefits
22under the Illinois Pension Code, defined benefit plans, defined
23contribution plans and accounts, individual retirement
24accounts, and non-qualified plans) acquired by or participated
25in by either spouse after the marriage and before a judgment of
26dissolution of marriage or legal separation or declaration of

 

 

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1invalidity of the marriage are presumed to be marital property.
2A spouse may overcome the presumption that these pension
3benefits are marital property by showing through clear and
4convincing evidence that the pension benefits were acquired by
5a method listed in subsection (a) of this Section. The right to
6a division of pension benefits in just proportions under this
7Section is enforceable under Section 1-119 of the Illinois
8Pension Code.
9    The value of pension benefits in a retirement system
10subject to the Illinois Pension Code shall be determined in
11accordance with the valuation procedures established by the
12retirement system.
13    The recognition of pension benefits as marital property and
14the division of those benefits pursuant to a Qualified Illinois
15Domestic Relations Order shall not be deemed to be a
16diminishment, alienation, or impairment of those benefits. The
17division of pension benefits is an allocation of property in
18which each spouse has a species of common ownership.
19    (3) For purposes of distribution of property under this
20Section, all stock options and restricted stock or similar form
21of benefit granted to either spouse after the marriage and
22before a judgment of dissolution of marriage or legal
23separation or declaration of invalidity of marriage, whether
24vested or non-vested or whether their value is ascertainable,
25are presumed to be marital property. This presumption of
26marital property is overcome by a showing that the stock

 

 

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1options or restricted stock or similar form of benefit were
2acquired by a method listed in subsection (a) of this Section.
3The court shall allocate stock options and restricted stock or
4similar form of benefit between the parties at the time of the
5judgment of dissolution of marriage or declaration of
6invalidity of marriage recognizing that the value of the stock
7options and restricted stock or similar form of benefit may not
8be then determinable and that the actual division of the
9options may not occur until a future date. In making the
10allocation between the parties, the court shall consider, in
11addition to the factors set forth in subsection (d) of this
12Section, the following:
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.
19        (ii) The length of time from the grant of the option to
20    the time the option is exercisable.
21    (b-5)(1) As to any existing policy of life insurance
22insuring the life of either spouse, or any interest in such
23policy, that constitutes marital property, whether whole life,
24term life, group term life, universal life, or other form of
25life insurance policy, and whether or not the value is
26ascertainable, the court shall allocate ownership, death

 

 

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1benefits or the right to assign death benefits, and the
2obligation for premium payments, if any, equitably between the
3parties at the time of the judgment for dissolution or
4declaration of invalidity of marriage.
5    (2) If a judgment of dissolution of marriage is entered
6after an insured has designated the insured's spouse as a
7beneficiary under a life insurance policy in force at the time
8of entry, the designation of the insured's former spouse as
9beneficiary 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),
18the proceeds of the policy are payable to the named alternative
19beneficiary or, if there is not a named alternative
20beneficiary, to the estate of the insured.
21    (4) An insurer that pays the proceeds of a life insurance
22policy to the beneficiary under a designation that is not
23effective under paragraph (2) is liable for payment of the
24proceeds to the person or estate provided by paragraph (3) only
25if:
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    (c) Commingled marital and non-marital property shall be
6treated in the following manner, unless otherwise agreed by the
7spouses:
8        (1)(A) If marital and non-marital property are
9    commingled by one estate being contributed into the other,
10    the following shall apply:
11            (i) If the contributed property loses its
12        identity, the contributed property transmutes to the
13        estate receiving the property, subject to the
14        provisions of paragraph (2) of this subsection (c).
15            (ii) If the contributed property retains its
16        identity, it does not transmute and remains property of
17        the contributing estate.
18        (B) If marital and non-marital property are commingled
19    into newly acquired property resulting in a loss of
20    identity of the contributing estates, the commingled
21    property shall be deemed transmuted to marital property,
22    subject to the provisions of paragraph (2) of this
23    subsection (c).
24        (2)(A) When one estate of property makes a contribution
25    to another estate of property, the contributing estate
26    shall be reimbursed from the estate receiving the

 

 

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1    contribution notwithstanding any transmutation. No such
2    reimbursement shall be made with respect to a contribution
3    that is not traceable by clear and convincing evidence or
4    that was a gift. The court may provide for reimbursement
5    out of the marital property to be divided or by imposing a
6    lien against the non-marital property that received the
7    contribution.
8        (B) When a spouse contributes personal effort to
9    non-marital property, it shall be deemed a contribution
10    from the marital estate, which shall receive reimbursement
11    for the efforts if the efforts are significant and result
12    in substantial appreciation to the non-marital property
13    except that if the marital estate reasonably has been
14    compensated for his or her efforts, it shall not be deemed
15    a contribution to the marital estate and there shall be no
16    reimbursement to the marital estate. The court may provide
17    for reimbursement out of the marital property to be divided
18    or by imposing a lien against the non-marital property
19    which received the contribution.
20    (d) In a proceeding for dissolution of marriage or
21declaration of invalidity of marriage, or in a proceeding for
22disposition of property following dissolution of marriage by a
23court that lacked personal jurisdiction over the absent spouse
24or lacked jurisdiction to dispose of the property, the court
25shall assign each spouse's non-marital property to that spouse.
26It also shall divide the marital property without regard to

 

 

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1marital misconduct in just proportions considering all
2relevant factors, including:
3        (1) each party's contribution to the acquisition,
4    preservation, or increase or decrease in value of the
5    marital or non-marital property, including (i) any
6    decrease attributable to an advance from the parties'
7    marital estate under subsection (c-1)(2) of Section 501;
8    (ii) the contribution of a spouse as a homemaker or to the
9    family unit; and (iii) whether the contribution is after
10    the commencement of a proceeding for dissolution of
11    marriage or declaration of invalidity of marriage;
12        (2) the dissipation by each party of the marital
13    property, provided that a party's claim of dissipation is
14    subject to the following conditions:
15            (i) a notice of intent to claim dissipation shall
16        be given no later than 60 days before trial or 30 days
17        after discovery closes, whichever is later;
18            (ii) the notice of intent to claim dissipation
19        shall contain, at a minimum, a date or period of time
20        during which the marriage began undergoing an
21        irretrievable breakdown, an identification of the
22        property dissipated, and a date or period of time
23        during which the dissipation occurred;
24            (iii) a certificate or service of the notice of
25        intent to claim dissipation shall be filed with the
26        clerk of the court and be served pursuant to applicable

 

 

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1        rules;
2            (iv) no dissipation shall be deemed to have
3        occurred prior to 3 years after the party claiming
4        dissipation knew or should have known of the
5        dissipation, but in no event prior to 5 years before
6        the filing of the petition for dissolution of marriage;
7        (3) the value of the property assigned to each spouse;
8        (4) the duration of the marriage;
9        (5) the relevant economic circumstances of each spouse
10    when the division of property is to become effective,
11    including the desirability of awarding the family home, or
12    the right to live therein for reasonable periods, to the
13    spouse having the primary residence of the children;
14        (6) any obligations and rights arising from a prior
15    marriage of either party;
16        (7) any prenuptial or postnuptial agreement of the
17    parties;
18        (8) the age, health, station, occupation, amount and
19    sources of income, vocational skills, employability,
20    estate, liabilities, and needs of each of the parties;
21        (9) the custodial provisions for any children;
22        (10) whether the apportionment is in lieu of or in
23    addition to maintenance;
24        (11) the reasonable opportunity of each spouse for
25    future acquisition of capital assets and income; and
26        (12) the tax consequences of the property division upon

 

 

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1    the respective economic circumstances of the parties.
2    (e) Each spouse has a species of common ownership in the
3marital property which vests at the time dissolution
4proceedings are commenced and continues only during the
5pendency of the action. Any such interest in marital property
6shall not encumber that property so as to restrict its
7transfer, assignment or conveyance by the title holder unless
8such title holder is specifically enjoined from making such
9transfer, assignment or conveyance.
10    (f) In a proceeding for dissolution of marriage or
11declaration of invalidity of marriage or in a proceeding for
12disposition of property following dissolution of marriage by a
13court that lacked personal jurisdiction over the absent spouse
14or lacked jurisdiction to dispose of the property, the court,
15in determining the value of the marital and non-marital
16property for purposes of dividing the property, has the
17discretion to use the date of the trial or such other date as
18agreed upon by the parties, or ordered by the court within its
19discretion, for purposes of determining the value of assets or
20property.
21    (g) The court if necessary to protect and promote the best
22interests of the children may set aside a portion of the
23jointly or separately held estates of the parties in a separate
24fund or trust for the support, maintenance, education, physical
25and mental health, and general welfare of any minor, dependent,
26or incompetent child of the parties. In making a determination

 

 

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1under this subsection, the court may consider, among other
2things, the conviction of a party of any of the offenses set
3forth in Section 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60,
412-3.3, 12-4, 12-4.1, 12-4.2, 12-4.3, 12-13, 12-14, 12-14.1,
512-15, or 12-16, or Section 12-3.05 except for subdivision
6(a)(4) or (g)(1), of the Criminal Code of 1961 or the Criminal
7Code of 2012 if the victim is a child of one or both of the
8parties, and there is a need for, and cost of, care, healing
9and counseling for the child who is the victim of the crime.
10    (h) Unless specifically directed by a reviewing court, or
11upon good cause shown, the court shall not on remand consider
12any increase or decrease in the value of any "marital" or
13"non-marital" property occurring since the assessment of such
14property at the original trial or hearing, but shall use only
15that assessment made at the original trial or hearing.
16    (i) The court may make such judgments affecting the marital
17property as may be just and may enforce such judgments by
18ordering a sale of marital property, with proceeds therefrom to
19be applied as determined by the court.
20    (j) After proofs have closed in the final hearing on all
21other issues between the parties (or in conjunction with the
22final hearing, if all parties so stipulate) and before judgment
23is entered, a party's petition for contribution to fees and
24costs incurred in the proceeding shall be heard and decided, in
25accordance with the following provisions:
26        (1) A petition for contribution, if not filed before

 

 

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1    the final hearing on other issues between the parties,
2    shall be filed no later than 14 days after the closing of
3    proofs in the final hearing or within such other period as
4    the court orders.
5        (2) Any award of contribution to one party from the
6    other party shall be based on the criteria for division of
7    marital property under this Section 503 and, if maintenance
8    has been awarded, on the criteria for an award of
9    maintenance under Section 504.
10        (3) The filing of a petition for contribution shall not
11    be deemed to constitute a waiver of the attorney-client
12    privilege between the petitioning party and current or
13    former counsel; and such a waiver shall not constitute a
14    prerequisite to a hearing for contribution. If either
15    party's presentation on contribution, however, includes
16    evidence within the scope of the attorney-client
17    privilege, the disclosure or disclosures shall be narrowly
18    construed and shall not be deemed by the court to
19    constitute a general waiver of the privilege as to matters
20    beyond the scope of the presentation.
21        (4) No finding on which a contribution award is based
22    or denied shall be asserted against counsel or former
23    counsel for purposes of any hearing under subsection (c) or
24    (e) of Section 508.
25        (5) A contribution award (payable to either the
26    petitioning party or the party's counsel, or jointly, as

 

 

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1    the court determines) may be in the form of either a set
2    dollar amount or a percentage of fees and costs (or a
3    portion of fees and costs) to be subsequently agreed upon
4    by the petitioning party and counsel or, alternatively,
5    thereafter determined in a hearing pursuant to subsection
6    (c) of Section 508 or previously or thereafter determined
7    in an independent proceeding under subsection (e) of
8    Section 508.
9        (6) The changes to this Section 503 made by this
10    amendatory Act of 1996 apply to cases pending on or after
11    June 1, 1997, except as otherwise provided in Section 508.
12    (k) In determining the value of assets or property under
13this Section, the court shall employ a fair market value
14standard. The date of valuation for the purposes of division of
15assets shall be the date of trial or such other date as agreed
16by the parties or ordered by the court, within its discretion.
17If the court grants a petition brought under Section 2-1401 of
18the Code of Civil Procedure, then the court has the discretion
19to use the date of the trial or such other date as agreed upon
20by the parties, or ordered by the court within its discretion,
21for purposes of determining the value of assets or property.
22    (l) The court may seek the advice of financial experts or
23other professionals, whether or not employed by the court on a
24regular basis. The advice given shall be in writing and made
25available by the court to counsel. Counsel may examine as a
26witness any professional consulted by the court designated as

 

 

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1the court's witness. Professional personnel consulted by the
2court are subject to subpoena for the purposes of discovery,
3trial, or both. The court shall allocate the costs and fees of
4those professional personnel between the parties based upon the
5financial ability of each party and any other criteria the
6court considers appropriate, and the allocation is subject to
7reallocation under subsection (a) of Section 508. Upon the
8request of any party or upon the court's own motion, the court
9may conduct a hearing as to the reasonableness of those fees
10and costs.
11    (m) The changes made to this Section by Public Act 97-941
12apply only to petitions for dissolution of marriage filed on or
13after January 1, 2013 (the effective date of Public Act
1497-941).
15    (n) If the court finds that a companion animal of the
16parties is a marital asset, it shall allocate the sole or joint
17ownership of and responsibility for a companion animal of the
18parties. In issuing an order under this subsection, the court
19shall take into consideration the well-being of the companion
20animal. As used in this Section, "companion animal" does not
21include a service animal as defined in Section 2.01c of the
22Humane Care for Animals Act.
23(Source: P.A. 99-78, eff. 7-20-15; 99-90, eff. 1-1-16; 99-763,
24eff. 1-1-17; 100-422, eff. 1-1-18.)