What Happens to My House in a Divorce

As more and more people get married at a later age, many already own real estate.  How real estate is treated in a divorce is treated in the divorce depends on many factors, including the course of conduct before and during marriage.  I will illustrate with a few examples:

Example 1

Adam and Brenda both own condos before the marriage.  They want to sell their condos and purchase a home once they are married.  Brenda nets $100,000 from the sell of her condo, and Adam nets $40,000.  They use the full $140,000 as a down payment on the marital home, which they buy after the marriage, and place in joint tenancy.  Five years later they get divorce.  The property has gained no equity, but the initial investment of $140,000 is intact.  Brenda wants her $100,000 back when the house is sold, as she believes this is her non-marital property.  Is Brenda entitled to her full $100,000 towards the down payment?

The answer is:  NO.

When Brenda took her non-marital money and placed it in a marital asset, she made a marital gift to Adam.  Therefore, each is now entitled to 1/2 of the equity in the home.  Brenda loses $30,000, while Adam gains $30,000.

Example 2

Larry marries Jane and they move into his home.  It is clear that this is his non-marital home, and Larry had never done anything to put Jane’s name on the title or the mortgage and note.  When Jane lived in the home, she contributed towards the mortgage and helped with household expenses, not including upkeep of the house.  After a few years of marriage, Jane moves out.  She lives on her own for two years before filing for divorce.  After she moved out, Larry lost his job and struggled financially.  His home went into foreclosure.  Now that they are getting divorced, he claims that Jane should be responsible for any deficiency that results from the foreclosure because she abandoned him.   Is Jane responsible for any of the debt related to Larry’s house?

The answer is:  NO.

This is Larry’s non-marital property.  Jane is not on the mortgage or the note.  In Illinois one can own non-marital property free and clear of any interest in the other, and this is what the parties did.  The fact that Jane left and Larry fell on hard times does not turn Larry’s debt into a marital debt.

Are you contemplating divorce and wonder how property will  be divided?  Give me a call.  I practice in Cook, Lake and Dupage counties and can be reached at (708) 466-6912.