Honey, I Want the House! – Division of the Marital Residence in Illinois Divorce Matters

In Illinois dissolution (divorce) proceedings, the parties’ property is either “marital” or “non-marital.” Non-marital property is property acquired prior to the marriage or acquired through gift or inheritance. All other property is marital property, regardless of which party acquired it or how it is titled. Typically, one of the biggest marital assets, and therefore one of the biggest points of contention in a dissolution, is the home the parties resided in during the marriage (the “marital residence.”)

With one house and two parties who no longer wish to live together, how do the courts decide who stays and who goes? This answer is not a simple one…but typically, there are three options. 1) Listing the marital residence for sale; 2) a buyout, and 3) awarding the marital residence to one party in dividing the marital estate. These options are explained below.*

LISTING THE MARITAL RESIDENCE FOR SALE:

This option usually occurs by agreement of the parties or by court order when the parties cannot agree on who gets to stay and who has to go, or when the parties cannot afford to maintain the home. The process begins with the mutual (or court-ordered) selection of a Realtor who determines the list price. The parties then equitably divide the costs of listing the home, any necessary repairs, Realtor commissions, and real estate attorney fees. On closing, the parties equitably divide the net proceeds from the sale.  

BUYOUT:

A buyout typically occurs when one party wants to remain in the marital residence and the other does not, or when the parties agree that it is in the best interests of the minor children that one party retain the marital residence. The Court may also order a buyout, as discussed below.

A buyout requires an appraisal to determine the value of the marital residence, the cost for which is typically split between the parties. If the marital residence is encumbered by a mortgage on dissolution, the party remaining in the marital residence will then refinance the home to remove the other party’s name from the loan. Following the refinance, the parties will equitably divide the equity in the marital residence (value of the marital residence as determined by the appraisal minus the mortgage balance) between them. Lastly, the party leaving the marital residence will execute a quitclaim deed, completely releasing their rights in the marital residence to the other party.

AWARDING THE MARITAL RESIDENCE TO ONE PARTY:

This last option usually comes about when the parties cannot agree on the options outlined above, or when the court does not find them appropriate. A court can order the buyout of the marital residence, as outlined above. In ordering such, the court will consider several factors - including, but not limited to:

• Each party’s contribution to the marital residence and/or the marital estate
• Any dissipation or wasting of marital property by a party
• The value of the marital estate assigned to each spouse
• The duration of the marriage
• The relevant economic circumstances of each party
• The custodial provisions for any children
• Maintenance (alimony) awarded to each party
• The tax consequences of the property division

The court may also award the marital residence to one party without requiring any sort of buyout, in consideration of any of the factors outlined above. This does not necessarily mean that the other party gets “nothing” – it simply means that they do not receive any portion of the home in the division of marital property.

If you are considering initiating dissolution proceedings in Illinois, or are involved in the same and have questions regarding the division of the marital estate, please reach out to the attorneys at Lavelle Law to assist you with your case.

Should you have additional questions regarding the subject matter hereinabove, please call us at 847-705-7555 or email Attorney Victoria R. Paton at vpaton@lavellelaw.com to schedule your free and confidential one-hour consultation to discuss your options.



* Please keep in mind that every dissolution matter is different, and the parties’ particular circumstances or agreements can lead to vastly different outcomes than what this article outlines.