Freezing Assets During an Illinois Divorce

When a divorce begins, there is a fundamental lack of trust between the two spouses. This lack of trust is especially strong when it comes to finances. There will always be suspicion that one spouse will try to hide or remove assets from the marriage. Because of this, parties will try to ask the court to freeze all of the marriage’s assets during the divorce until those assets can be appropriately allocated in the divorce process. “In a marriage dissolution proceeding, it is proper to prevent one spouse from secreting or disposing of marital assets” Erlich v. Lopin-Erlich, 553 NE 2d 21 – Ill: Appellate Court, 1st Dist. 1990 How do you freeze assets in an Illinois divorce? The Automatic Stay In many states, there is an “automatic stay” in the statutes that prevents parties to a divorce from doing anything to diminish or conceal any assets. In addition or in the alternative, other states also will allow judges to issue standing orders that are automatically issued at the beginning of a divorce case. Those standing orders can personally order the parties to a divorce to essentially freeze their assets until further order of court. There used to be a provision in the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/501.1), providing for the automatic restraint against transferring, encumbering or disposing of any property without bond the moment a divorce was filed until further order of court. This provision of the act automatically freezing assets in an Illinois divorce has since been removed after the provision was found to be unconstitutional by the Illinois Supreme Court. Messenger v. Edgar, 623 N.E.2d 310 (Ill. 1993) The court found that the provision was overly broad because there are almost always non-marital assets that would also be frozen under this Illinois statute. Furthermore, any legal restriction by the state or a court must require “due process” under the U.S. constitution and the Illinois constitution. Due process is the fair application of the law. The court held that automatically freezing someone’s assets without notice, hearing or even a signed affidavit by someone familiar with the facts is a direct violation of due process. So, there is no automatic freezing of assets in an Illinois divorce.  Temporary Restraining Order or Preliminary Injunction Assets can eventually be frozen in an Illinois divorce, just not automatically.  A motion must be filed in order to freeze […]

from Russell D. Knight | Family Lawyer Chicago https://rdklegal.com/freezing-assets-during-an-illinois-divorce/