Trusts And Marital Assets In An Illinois Divorce

I recently saw an advertisement on Facebook that said, “Protect your assets in a divorce with a trust.” Hmm. I am a divorce lawyer who is obsessed with divorce law and strategy. Why had I not heard that a pending divorce could be resolved by simply transferring all of one’s property into a trust? What sounds too good to be true…usually is. Upon further research, I discovered that you can remove marital assets from the marital estate, rendering the assets untouched by a later divorce, by putting those marital assets in a trust…but only if you have NO ill will in your heart (explained later). What Is A Trust In Illinois “”Trust” means…a trust created by will, deed, agreement, declaration, or other written instrument” 760 ILCS 3/103(37) “A trust may be created by:   Property transferred to a trust is now the property of the trust not the property of the person who transferred the property to the trust (until the trust is revoked). Therefore, that property cannot be divided in an Illinois divorce because the person no longer owns the property. The trust owns the formerly marital property after the transfer.   Division Of Assets In An Illinois Divorce Illinois divorce courts “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 5/503(d) “‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a) “For purposes of distribution of property, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage is presumed marital property.” 750 ILCS 5/503(b) Before there is any question as to whether property is marital and thus, divisible in an Illinois divorce, the question is whether the property is even subject to the divorce. Property Held By A Trust Is Not Marital Property “The issue is…whether the assets in [a]…trusts is before the court in the first instance and therefore subject to distribution.” LaRocque v. LaRocque (In re Marriage of LaRocque), 107 N.E.3d 349, 366 (Ill. App. Ct. 2018) Non-marital property “property acquired by gift, legacy or descent or property acquired in exchange for such property” 750 ILCS 5/503(a)(1) “Section 503(a)(1) may apply where a spouse receives property as his or her share of a trust.” In re Marriage of Asta and Pappas, 56 NE 3d 1088 – Ill: Appellate […]

from Russell D. Knight | Family Lawyer Chicago https://rdklegal.com/trusts-and-marital-assets-in-an-illinois-divorce/