98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5825

 

Introduced , by Rep. David R. Leitch

 

SYNOPSIS AS INTRODUCED:
 
750 ILCS 5/503  from Ch. 40, par. 503

    Amends the Illinois Marriage and Dissolution of Marriage Act. Provides that in the case of a life insurance policy that does not constitute marital property, upon the entry of an order for dissolution of marriage or declaration of invalidity of marriage, a beneficiary designation which provides for the payment of a death benefit to the other party is revoked unless the court orders otherwise or the insured affirmatively designates otherwise in a signed writing executed after the entry of the order for dissolution of marriage or declaration of invalidity of marriage. Provides that if a benefit is prevented from passing to a former spouse by the new provisions, the payor shall pay a death benefit in accordance with the contract providing for the death benefit as if the former spouse had predeceased the decedent. Provides that the new provisions do not apply to policies contracted for the purpose of securing a maintenance or child support obligation.


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A BILL FOR

 

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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.
8    (a) For purposes of this Act, "marital property" means all
9property acquired by either spouse subsequent to the marriage,
10except the following, which is known as "non-marital property":
11        (1) property acquired by gift, legacy or descent;
12        (2) property acquired in exchange for property
13    acquired before the marriage or in exchange for property
14    acquired by gift, legacy or descent;
15        (3) property acquired by a spouse after a judgment of
16    legal separation;
17        (4) property excluded by valid agreement of the
18    parties;
19        (5) any judgment or property obtained by judgment
20    awarded to a spouse from the other spouse;
21        (6) property acquired before the marriage;
22        (7) the increase in value of property acquired by a
23    method listed in paragraphs (1) through (6) of this

 

 

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1    subsection, irrespective of whether the increase results
2    from a contribution of marital property, non-marital
3    property, the personal effort of a spouse, or otherwise,
4    subject to the right of reimbursement provided in
5    subsection (c) of this Section; and
6        (8) income from property acquired by a method listed in
7    paragraphs (1) through (7) of this subsection if the income
8    is not attributable to the personal effort of a spouse.
9    (b)(1) For purposes of distribution of property pursuant to
10this Section, all property acquired by either spouse after the
11marriage and before a judgment of dissolution of marriage or
12declaration of invalidity of marriage, including non-marital
13property transferred into some form of co-ownership between the
14spouses, is presumed to be marital property, regardless of
15whether title is held individually or by the spouses in some
16form of co-ownership such as joint tenancy, tenancy in common,
17tenancy by the entirety, or community property. The presumption
18of marital property is overcome by a showing that the property
19was acquired by a method listed in subsection (a) of this
20Section.
21    (2) For purposes of distribution of property pursuant to
22this Section, all pension benefits (including pension benefits
23under the Illinois Pension Code) acquired by either spouse
24after the marriage and before a judgment of dissolution of
25marriage or declaration of invalidity of the marriage are
26presumed to be marital property, regardless of which spouse

 

 

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

 

 

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1declaration of invalidity of marriage recognizing that the
2value of the stock options may not be then determinable and
3that the actual division of the options may not occur until a
4future date. In making the allocation between the parties, the
5court shall consider, in addition to the factors set forth in
6subsection (d) of this Section, the following:
7        (i) All circumstances underlying the grant of the stock
8    option including but not limited to whether the grant was
9    for past, present, or future efforts, or any combination
10    thereof.
11        (ii) The length of time from the grant of the option to
12    the time the option is exercisable.
13    (b-5) As to any policy of life insurance insuring the life
14of either spouse, or any interest in such policy, that
15constitutes marital property, whether whole life, term life,
16group term life, universal life, or other form of life
17insurance policy, and whether or not the value is
18ascertainable, the court shall allocate ownership, death
19benefits or the right to assign death benefits, and the
20obligation for premium payments, if any, equitably between the
21parties at the time of the judgment for dissolution or
22declaration of invalidity of marriage.
23    (b-7) In the case of a life insurance policy that does not
24constitute marital property, upon the entry of an order for
25dissolution of marriage or declaration of invalidity of
26marriage, a beneficiary designation which provides for the

 

 

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1payment of a death benefit to the other party is revoked unless
2the court orders otherwise or the insured affirmatively
3designates otherwise in a signed writing executed after the
4entry of the order for dissolution of marriage or declaration
5of invalidity of marriage. If a death benefit is prevented from
6passing to a former spouse by this subsection (b-7), the payor
7shall pay the benefit in accordance with the contract providing
8for the death benefit as if the former spouse had predeceased
9the decedent. This subsection (b-7) does not apply to insurance
10policies contracted for the purpose of securing a maintenance
11or child support obligation.
12    (c) Commingled marital and non-marital property shall be
13treated in the following manner, unless otherwise agreed by the
14spouses:
15        (1) When marital and non-marital property are
16    commingled by contributing one estate of property into
17    another resulting in a loss of identity of the contributed
18    property, the classification of the contributed property
19    is transmuted to the estate receiving the contribution,
20    subject to the provisions of paragraph (2) of this
21    subsection; provided that if marital and non-marital
22    property are commingled into newly acquired property
23    resulting in a loss of identity of the contributing
24    estates, the commingled property shall be deemed
25    transmuted to marital property, subject to the provisions
26    of paragraph (2) of this subsection.

 

 

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1        (2) When one estate of property makes a contribution to
2    another estate of property, or when a spouse contributes
3    personal effort to non-marital property, the contributing
4    estate shall be reimbursed from the estate receiving the
5    contribution notwithstanding any transmutation; provided,
6    that no such reimbursement shall be made with respect to a
7    contribution which is not retraceable by clear and
8    convincing evidence, or was a gift, or, in the case of a
9    contribution of personal effort of a spouse to non-marital
10    property, unless the effort is significant and results in
11    substantial appreciation of the non-marital property.
12    Personal effort of a spouse shall be deemed a contribution
13    by the marital estate. The court may provide for
14    reimbursement out of the marital property to be divided or
15    by imposing a lien against the non-marital property which
16    received the contribution.
17    (d) In a proceeding for dissolution of marriage or
18declaration of invalidity of marriage, or in a proceeding for
19disposition of property following dissolution of marriage by a
20court which lacked personal jurisdiction over the absent spouse
21or lacked jurisdiction to dispose of the property, the court
22shall assign each spouse's non-marital property to that spouse.
23It also shall divide the marital property without regard to
24marital misconduct in just proportions considering all
25relevant factors, including:
26        (1) the contribution of each party to the acquisition,

 

 

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

 

 

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1        (3) the value of the property assigned to each spouse;
2        (4) the duration of the marriage;
3        (5) the relevant economic circumstances of each spouse
4    when the division of property is to become effective,
5    including the desirability of awarding the family home, or
6    the right to live therein for reasonable periods, to the
7    spouse having custody of the children;
8        (6) any obligations and rights arising from a prior
9    marriage of either party;
10        (7) any antenuptial agreement of the parties;
11        (8) the age, health, station, occupation, amount and
12    sources of income, vocational skills, employability,
13    estate, liabilities, and needs of each of the parties;
14        (9) the custodial provisions for any children;
15        (10) whether the apportionment is in lieu of or in
16    addition to maintenance;
17        (11) the reasonable opportunity of each spouse for
18    future acquisition of capital assets and income; and
19        (12) the tax consequences of the property division upon
20    the respective economic circumstances of the parties.
21    (e) Each spouse has a species of common ownership in the
22marital property which vests at the time dissolution
23proceedings are commenced and continues only during the
24pendency of the action. Any such interest in marital property
25shall not encumber that property so as to restrict its
26transfer, assignment or conveyance by the title holder unless

 

 

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1such title holder is specifically enjoined from making such
2transfer, assignment or conveyance.
3    (f) In a proceeding for dissolution of marriage or
4declaration of invalidity of marriage or in a proceeding for
5disposition of property following dissolution of marriage by a
6court that lacked personal jurisdiction over the absent spouse
7or lacked jurisdiction to dispose of the property, the court,
8in determining the value of the marital and non-marital
9property for purposes of dividing the property, shall value the
10property as of the date of trial or some other date as close to
11the date of trial as is practicable.
12    (g) The court if necessary to protect and promote the best
13interests of the children may set aside a portion of the
14jointly or separately held estates of the parties in a separate
15fund or trust for the support, maintenance, education, physical
16and mental health, and general welfare of any minor, dependent,
17or incompetent child of the parties. In making a determination
18under this subsection, the court may consider, among other
19things, the conviction of a party of any of the offenses set
20forth in Section 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60,
2112-3.3, 12-4, 12-4.1, 12-4.2, 12-4.3, 12-13, 12-14, 12-14.1,
2212-15, or 12-16, or Section 12-3.05 except for subdivision
23(a)(4) or (g)(1), of the Criminal Code of 1961 or the Criminal
24Code of 2012 if the victim is a child of one or both of the
25parties, and there is a need for, and cost of, care, healing
26and counseling for the child who is the victim of the crime.

 

 

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1    (h) Unless specifically directed by a reviewing court, or
2upon good cause shown, the court shall not on remand consider
3any increase or decrease in the value of any "marital" or
4"non-marital" property occurring since the assessment of such
5property at the original trial or hearing, but shall use only
6that assessment made at the original trial or hearing.
7    (i) The court may make such judgments affecting the marital
8property as may be just and may enforce such judgments by
9ordering a sale of marital property, with proceeds therefrom to
10be applied as determined by the court.
11    (j) After proofs have closed in the final hearing on all
12other issues between the parties (or in conjunction with the
13final hearing, if all parties so stipulate) and before judgment
14is entered, a party's petition for contribution to fees and
15costs incurred in the proceeding shall be heard and decided, in
16accordance with the following provisions:
17        (1) A petition for contribution, if not filed before
18    the final hearing on other issues between the parties,
19    shall be filed no later than 30 days after the closing of
20    proofs in the final hearing or within such other period as
21    the court orders.
22        (2) Any award of contribution to one party from the
23    other party shall be based on the criteria for division of
24    marital property under this Section 503 and, if maintenance
25    has been awarded, on the criteria for an award of
26    maintenance under Section 504.

 

 

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1        (3) The filing of a petition for contribution shall not
2    be deemed to constitute a waiver of the attorney-client
3    privilege between the petitioning party and current or
4    former counsel; and such a waiver shall not constitute a
5    prerequisite to a hearing for contribution. If either
6    party's presentation on contribution, however, includes
7    evidence within the scope of the attorney-client
8    privilege, the disclosure or disclosures shall be narrowly
9    construed and shall not be deemed by the court to
10    constitute a general waiver of the privilege as to matters
11    beyond the scope of the presentation.
12        (4) No finding on which a contribution award is based
13    or denied shall be asserted against counsel or former
14    counsel for purposes of any hearing under subsection (c) or
15    (e) of Section 508.
16        (5) A contribution award (payable to either the
17    petitioning party or the party's counsel, or jointly, as
18    the court determines) may be in the form of either a set
19    dollar amount or a percentage of fees and costs (or a
20    portion of fees and costs) to be subsequently agreed upon
21    by the petitioning party and counsel or, alternatively,
22    thereafter determined in a hearing pursuant to subsection
23    (c) of Section 508 or previously or thereafter determined
24    in an independent proceeding under subsection (e) of
25    Section 508.
26        (6) The changes to this Section 503 made by this

 

 

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1    amendatory Act of 1996 apply to cases pending on or after
2    June 1, 1997, except as otherwise provided in Section 508.
3    The changes made to this Section by this amendatory Act of
4the 97th General Assembly apply only to petitions for
5dissolution of marriage filed on or after the effective date of
6this amendatory Act of the 97th General Assembly.
7(Source: P.A. 96-583, eff. 1-1-10; 96-1551, Article 1, Section
8985, eff. 7-1-11; 96-1551, Article 2, Section 1100, eff.
97-1-11; 97-608, eff. 1-1-12; 97-941, eff. 1-1-13; 97-1109, eff.
101-1-13; 97-1150, eff. 1-25-13.)