Public Act 100-0871
 
SB2437 EnrolledLRB100 16507 HEP 31639 b

    AN ACT concerning civil law.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Marriage and Dissolution of
Marriage Act is amended by changing Section 503 as follows:
 
    (750 ILCS 5/503)  (from Ch. 40, par. 503)
    Sec. 503. Disposition of property and debts.
    (a) For purposes of this Act, "marital property" means all
property, including debts and other obligations, acquired by
either spouse subsequent to the marriage, except the following,
which is known as "non-marital property":
        (1) property acquired by gift, legacy or descent or
    property acquired in exchange for such property;
        (2) property acquired in exchange for property
    acquired before the marriage;
        (3) property acquired by a spouse after a judgment of
    legal separation;
        (4) property excluded by valid agreement of the
    parties, including a premarital agreement or a postnuptial
    agreement;
        (5) any judgment or property obtained by judgment
    awarded to a spouse from the other spouse except, however,
    when a spouse is required to sue the other spouse in order
    to obtain insurance coverage or otherwise recover from a
    third party and the recovery is directly related to amounts
    advanced by the marital estate, the judgment shall be
    considered marital property;
        (6) property acquired before the marriage, except as it
    relates to retirement plans that may have both marital and
    non-marital characteristics;
        (6.5) all property acquired by a spouse by the sole use
    of non-marital property as collateral for a loan that then
    is used to acquire property during the marriage; to the
    extent that the marital estate repays any portion of the
    loan, it shall be considered a contribution from the
    marital estate to the non-marital estate subject to
    reimbursement;
        (7) the increase in value of non-marital property,
    irrespective of whether the increase results from a
    contribution of marital property, non-marital property,
    the personal effort of a spouse, or otherwise, subject to
    the right of reimbursement provided in subsection (c) of
    this Section; and
        (8) income from property acquired by a method listed in
    paragraphs (1) through (7) of this subsection if the income
    is not attributable to the personal effort of a spouse.
    Property acquired prior to a marriage that would otherwise
be non-marital property shall not be deemed to be marital
property solely because the property was acquired in
contemplation of marriage.
    The court shall make specific factual findings as to its
classification of assets as marital or non-marital property,
values, and other factual findings supporting its property
award.
    (b)(1) 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. This
presumption includes non-marital property transferred into
some form of co-ownership between the spouses, regardless of
whether title is held individually or by the spouses in some
form of co-ownership such as joint tenancy, tenancy in common,
tenancy by the entirety, or community property. The presumption
of marital property is overcome by showing through clear and
convincing evidence that the property was acquired by a method
listed in subsection (a) of this Section or was done for estate
or tax planning purposes or for other reasons that establish
that a transfer between spouses was not intended to be a gift.
    (2) For purposes of distribution of property pursuant to
this Section, all pension benefits (including pension benefits
under the Illinois Pension Code, defined benefit plans, defined
contribution plans and accounts, individual retirement
accounts, and non-qualified plans) acquired by or participated
in by either spouse after the marriage and before a judgment of
dissolution of marriage or legal separation or declaration of
invalidity of the marriage are presumed to be marital property.
A spouse may overcome the presumption that these pension
benefits are marital property by showing through clear and
convincing evidence that the pension benefits were acquired by
a method listed in subsection (a) of this Section. The right to
a division of pension benefits in just proportions under this
Section is enforceable under Section 1-119 of the Illinois
Pension Code.
    The value of pension benefits in a retirement system
subject to the Illinois Pension Code shall be determined in
accordance with the valuation procedures established by the
retirement system.
    The recognition of pension benefits as marital property and
the division of those benefits pursuant to a Qualified Illinois
Domestic Relations Order shall not be deemed to be a
diminishment, alienation, or impairment of those benefits. The
division of pension benefits is an allocation of property in
which each spouse has a species of common ownership.
    (3) For purposes of distribution of property under this
Section, all stock options and restricted stock or similar form
of benefit granted to either spouse after the marriage and
before a judgment of dissolution of marriage or legal
separation or declaration of invalidity of marriage, whether
vested or non-vested or whether their value is ascertainable,
are presumed to be marital property. This presumption of
marital property is overcome by a showing that the stock
options or restricted stock or similar form of benefit were
acquired by a method listed in subsection (a) of this Section.
The court shall allocate stock options and restricted stock or
similar form of benefit between the parties at the time of the
judgment of dissolution of marriage or declaration of
invalidity of marriage recognizing that the value of the stock
options and restricted stock or similar form of benefit may not
be then determinable and that the actual division of the
options may not occur until a future date. In making the
allocation between the parties, the court shall consider, in
addition to the factors set forth in subsection (d) of this
Section, the following:
        (i) All circumstances underlying the grant of the stock
    option and restricted stock or similar form of benefit
    including but not limited to the vesting schedule, whether
    the grant was for past, present, or future efforts, whether
    the grant is designed to promote future performance or
    employment, or any combination thereof.
        (ii) The length of time from the grant of the option to
    the time the option is exercisable.
    (b-5)(1) As to any existing policy of life insurance
insuring the life of either spouse, or any interest in such
policy, that constitutes marital property, whether whole life,
term life, group term life, universal life, or other form of
life insurance policy, and whether or not the value is
ascertainable, the court shall allocate ownership, death
benefits or the right to assign death benefits, and the
obligation for premium payments, if any, equitably between the
parties at the time of the judgment for dissolution or
declaration of invalidity of marriage.
    (2) If a judgment of dissolution of marriage is entered
after an insured has designated the insured's spouse as a
beneficiary under a life insurance policy in force at the time
of entry, the designation of the insured's former spouse as
beneficiary is not effective unless:
        (A) the judgment designates the insured's former
    spouse as the beneficiary;
        (B) the insured redesignates the former spouse as the
    beneficiary after entry of the judgment; or
        (C) the former spouse is designated to receive the
    proceeds in trust for, on behalf of, or for the benefit of
    a child or a dependent of either former spouse.
    (3) If a designation is not effective under paragraph (2),
the proceeds of the policy are payable to the named alternative
beneficiary or, if there is not a named alternative
beneficiary, to the estate of the insured.
    (4) An insurer that pays the proceeds of a life insurance
policy to the beneficiary under a designation that is not
effective under paragraph (2) is liable for payment of the
proceeds to the person or estate provided by paragraph (3) only
if:
        (A) before payment of the proceeds to the designated
    beneficiary, the insurer receives written notice at the
    home office of the insurer from an interested person that
    the designation is not effective under paragraph (2); and
        (B) the insurer has not filed an interpleader.
    (5) The provisions in paragraphs (2), (3) and (4) of this
subsection (b-5) do not apply to life insurance policies
subject to regulation under the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. 100 et seq., the
Federal Employee Group Life Insurance Act, 5 U.S.C. 8701 et
seq., or any other federal law that preempts the application of
those paragraphs.
    (c) Commingled marital and non-marital property shall be
treated in the following manner, unless otherwise agreed by the
spouses:
        (1)(A) If marital and non-marital property are
    commingled by one estate being contributed into the other,
    the following shall apply:
            (i) If the contributed property loses its
        identity, the contributed property transmutes to the
        estate receiving the property, subject to the
        provisions of paragraph (2) of this subsection (c).
            (ii) If the contributed property retains its
        identity, it does not transmute and remains property of
        the contributing estate.
        (B) If marital and non-marital property are commingled
    into newly acquired property resulting in a loss of
    identity of the contributing estates, the commingled
    property shall be deemed transmuted to marital property,
    subject to the provisions of paragraph (2) of this
    subsection (c).
        (2)(A) When one estate of property makes a contribution
    to another estate of property, the contributing estate
    shall be reimbursed from the estate receiving the
    contribution notwithstanding any transmutation. No such
    reimbursement shall be made with respect to a contribution
    that is not traceable by clear and convincing evidence or
    that was a gift. The court may provide for reimbursement
    out of the marital property to be divided or by imposing a
    lien against the non-marital property that received the
    contribution.
        (B) When a spouse contributes personal effort to
    non-marital property, it shall be deemed a contribution
    from the marital estate, which shall receive reimbursement
    for the efforts if the efforts are significant and result
    in substantial appreciation to the non-marital property
    except that if the marital estate reasonably has been
    compensated for his or her efforts, it shall not be deemed
    a contribution to the marital estate and there shall be no
    reimbursement to the marital estate. The court may provide
    for reimbursement out of the marital property to be divided
    or by imposing a lien against the non-marital property
    which received the contribution.
    (d) In a proceeding for dissolution of marriage or
declaration of invalidity of marriage, or in a proceeding for
disposition of property following dissolution of marriage by a
court that lacked personal jurisdiction over the absent spouse
or lacked jurisdiction to dispose of the property, the court
shall assign each spouse's non-marital property to that spouse.
It also shall divide the marital property without regard to
marital misconduct in just proportions considering all
relevant factors, including:
        (1) each party's contribution to the acquisition,
    preservation, or increase or decrease in value of the
    marital or non-marital property, including (i) any
    decrease attributable to an advance from the parties'
    marital estate under subsection (c-1)(2) of Section 501;
    (ii) the contribution of a spouse as a homemaker or to the
    family unit; and (iii) whether the contribution is after
    the commencement of a proceeding for dissolution of
    marriage or declaration of invalidity of marriage;
        (2) the dissipation by each party of the marital
    property, provided that a party's claim of dissipation is
    subject to the following conditions:
            (i) a notice of intent to claim dissipation shall
        be given no later than 60 days before trial or 30 days
        after discovery closes, whichever is later;
            (ii) the notice of intent to claim dissipation
        shall contain, at a minimum, a date or period of time
        during which the marriage began undergoing an
        irretrievable breakdown, an identification of the
        property dissipated, and a date or period of time
        during which the dissipation occurred;
            (iii) a certificate or service of the notice of
        intent to claim dissipation shall be filed with the
        clerk of the court and be served pursuant to applicable
        rules;
            (iv) no dissipation shall be deemed to have
        occurred prior to 3 years after the party claiming
        dissipation knew or should have known of the
        dissipation, but in no event prior to 5 years before
        the filing of the petition for dissolution of marriage;
        (3) the value of the property assigned to each spouse;
        (4) the duration of the marriage;
        (5) the relevant economic circumstances of each spouse
    when the division of property is to become effective,
    including the desirability of awarding the family home, or
    the right to live therein for reasonable periods, to the
    spouse having the primary residence of the children;
        (6) any obligations and rights arising from a prior
    marriage of either party;
        (7) any prenuptial or postnuptial agreement of the
    parties;
        (8) the age, health, station, occupation, amount and
    sources of income, vocational skills, employability,
    estate, liabilities, and needs of each of the parties;
        (9) the custodial provisions for any children;
        (10) whether the apportionment is in lieu of or in
    addition to maintenance;
        (11) the reasonable opportunity of each spouse for
    future acquisition of capital assets and income; and
        (12) the tax consequences of the property division upon
    the respective economic circumstances of the parties.
    (e) Each spouse has a species of common ownership in the
marital property which vests at the time dissolution
proceedings are commenced and continues only during the
pendency of the action. Any such interest in marital property
shall not encumber that property so as to restrict its
transfer, assignment or conveyance by the title holder unless
such title holder is specifically enjoined from making such
transfer, assignment or conveyance.
    (f) In a proceeding for dissolution of marriage or
declaration of invalidity of marriage or in a proceeding for
disposition of property following dissolution of marriage by a
court that lacked personal jurisdiction over the absent spouse
or lacked jurisdiction to dispose of the property, the court,
in determining the value of the marital and non-marital
property for purposes of dividing the property, has the
discretion to use the date of the trial or such other date as
agreed upon by the parties, or ordered by the court within its
discretion, for purposes of determining the value of assets or
property.
    (g) The court if necessary to protect and promote the best
interests of the children may set aside a portion of the
jointly or separately held estates of the parties in a separate
fund or trust for the support, maintenance, education, physical
and mental health, and general welfare of any minor, dependent,
or incompetent child of the parties. In making a determination
under this subsection, the court may consider, among other
things, the conviction of a party of any of the offenses set
forth in Section 11-1.20, 11-1.30, 11-1.40, 11-1.50, 11-1.60,
12-3.3, 12-4, 12-4.1, 12-4.2, 12-4.3, 12-13, 12-14, 12-14.1,
12-15, or 12-16, or Section 12-3.05 except for subdivision
(a)(4) or (g)(1), of the Criminal Code of 1961 or the Criminal
Code of 2012 if the victim is a child of one or both of the
parties, and there is a need for, and cost of, care, healing
and counseling for the child who is the victim of the crime.
    (h) Unless specifically directed by a reviewing court, or
upon good cause shown, the court shall not on remand consider
any increase or decrease in the value of any "marital" or
"non-marital" property occurring since the assessment of such
property at the original trial or hearing, but shall use only
that assessment made at the original trial or hearing.
    (i) The court may make such judgments affecting the marital
property as may be just and may enforce such judgments by
ordering a sale of marital property, with proceeds therefrom to
be applied as determined by the court.
    (j) After proofs have closed in the final hearing on all
other issues between the parties (or in conjunction with the
final hearing, if all parties so stipulate) and before judgment
is entered, a party's petition for contribution to fees and
costs incurred in the proceeding shall be heard and decided, in
accordance with the following provisions:
        (1) A petition for contribution, if not filed before
    the final hearing on other issues between the parties,
    shall be filed no later than 14 days after the closing of
    proofs in the final hearing or within such other period as
    the court orders.
        (2) Any award of contribution to one party from the
    other party shall be based on the criteria for division of
    marital property under this Section 503 and, if maintenance
    has been awarded, on the criteria for an award of
    maintenance under Section 504.
        (3) The filing of a petition for contribution shall not
    be deemed to constitute a waiver of the attorney-client
    privilege between the petitioning party and current or
    former counsel; and such a waiver shall not constitute a
    prerequisite to a hearing for contribution. If either
    party's presentation on contribution, however, includes
    evidence within the scope of the attorney-client
    privilege, the disclosure or disclosures shall be narrowly
    construed and shall not be deemed by the court to
    constitute a general waiver of the privilege as to matters
    beyond the scope of the presentation.
        (4) No finding on which a contribution award is based
    or denied shall be asserted against counsel or former
    counsel for purposes of any hearing under subsection (c) or
    (e) of Section 508.
        (5) A contribution award (payable to either the
    petitioning party or the party's counsel, or jointly, as
    the court determines) may be in the form of either a set
    dollar amount or a percentage of fees and costs (or a
    portion of fees and costs) to be subsequently agreed upon
    by the petitioning party and counsel or, alternatively,
    thereafter determined in a hearing pursuant to subsection
    (c) of Section 508 or previously or thereafter determined
    in an independent proceeding under subsection (e) of
    Section 508.
        (6) The changes to this Section 503 made by this
    amendatory Act of 1996 apply to cases pending on or after
    June 1, 1997, except as otherwise provided in Section 508.
    (k) In determining the value of assets or property under
this Section, the court shall employ a fair market value
standard. The date of valuation for the purposes of division of
assets shall be the date of trial or such other date as agreed
by the parties or ordered by the court, within its discretion.
If the court grants a petition brought under Section 2-1401 of
the Code of Civil Procedure, then the court has the discretion
to use the date of the trial or such other date as agreed upon
by the parties, or ordered by the court within its discretion,
for purposes of determining the value of assets or property.
    (l) The court may seek the advice of financial experts or
other professionals, whether or not employed by the court on a
regular basis. The advice given shall be in writing and made
available by the court to counsel. Counsel may examine as a
witness any professional consulted by the court designated as
the court's witness. Professional personnel consulted by the
court are subject to subpoena for the purposes of discovery,
trial, or both. The court shall allocate the costs and fees of
those professional personnel between the parties based upon the
financial ability of each party and any other criteria the
court considers appropriate, and the allocation is subject to
reallocation under subsection (a) of Section 508. Upon the
request of any party or upon the court's own motion, the court
may conduct a hearing as to the reasonableness of those fees
and costs.
    (m) The changes made to this Section by Public Act 97-941
apply only to petitions for dissolution of marriage filed on or
after January 1, 2013 (the effective date of Public Act
97-941).
    (n) If the court finds that a companion animal of the
parties is a marital asset, it shall allocate the sole or joint
ownership of and responsibility for a companion animal of the
parties. In issuing an order under this subsection, the court
shall take into consideration the well-being of the companion
animal. As used in this Section, "companion animal" does not
include a service animal as defined in Section 2.01c of the
Humane Care for Animals Act.
(Source: P.A. 99-78, eff. 7-20-15; 99-90, eff. 1-1-16; 99-763,
eff. 1-1-17; 100-422, eff. 1-1-18.)