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Types of Marital Assets

Many of the different types of marital assets are not specifically addressed by the code, but are rather effected by the factors of what constitutes marital property, and how it should be divided. There are some types of marital assets that require more specific consideration (retirement accounts and contingent injury claims), but for the most part, common sense application of the factors applies.

Valuation of the property is an evidentiary question, which can be addressed by either the owner of the property, or by expert testimony. Expert testimony is not required, as it is assumed that the owner has some familiarity with the property. Nonetheless, if the owner can be shown to be incompetent due to unfamiliarity with the underlying facts regarding the property’s valuation, expert testimony may be needed. (In Re: Vucic). Expert testimony is advisable for more complex situations, such as complex retirement accounts, or even for real estate (an appraiser or realtor). The timing of valuation should be either the date of dissolution, or as close to trial as possible when valuation involves a fair degree of complexity (In re: Benkendorf- See also IMDMA 5/503(f)). In cases where the value has increased substantially between the filing of the case and the trial, one must still use the increased value. However, it can be argued that the other, non-working spouse did not contribute to the increase in value after the parties separated (with the rebuttal being that the increase would not have occurred without the other spouse’s contributions while still living together).

Tangible personal property division basically falls into two categories: what judges actually care about, and everything else. Judges typically will only want to get involved in personal property division if it involves vehicles. Obviously, vehicles are fairly major assets, which also bear upon factors such as the parties ability to work, or to effectively transport children to and from school/day care. However, property such as end tables and chairs are considered to be “piddling matters”, and judges would rather have the parties work out those specific issues.

Bank accounts, of course, are particularly affected by such factors as dissipation, as the parties will have access to any joint accounts not only during the marriage proper, but potentially during the separation period if no one takes steps to close and divide any accounts. The larger the account, the more likely a judge will want to be involved. Obviously, that TCF account which has had a typical balance of $5.00 for the past 8 years is something the judge will consider beneath notice.

Real estate is usually the major point of contention. Much case law regarding both what constitutes marital property, valuation, and how it should be divided, revolves around real estate. It should be noted that the court can order the sale of real estate (5/503(i)); however, a party must ask for the sale of a marital home, even if the request is only vaguely worded. For real estate which is not a marital home, judge-ordered sales are often threatened, but rarely actually executed.

A court may order the reorganization of marital debt in the context of assets. Excessive credit card use by one party, evinced by the accumulation of assets on credit, can result in that party being ordered to shoulder the burden of that debt. Accepting a benefit of a debt, however, may result in someone who did not take out the loan or debt still having to pay some of the debt. Even though the court has the power to order debt reorganization, this does not alter any existing obligations between the parties and their creditors. It is always important to remind the client that any order of dissolution and related settlement agreement does not in itself eliminate their existing obligations- the client must still make arrangements with the creditors to alter any existing obligations (if that is possible). Any court orders are typically only effective against one of the parties to the divorce.

Professional licenses or degrees are NOT marital assets. Instead, a spouse’s license or degree is a factor involved in the division of marital assets (e.g. the economic potential of a spouse may be higher due to having a law degree). This position makes sense, as a license cannot be simply bought or sold (notwithstanding George Ryan’s running of the DMV).

If a spouse is an attorney, his/her contingent fees are not marital assets. This is due to the fact that there are restrictions on the splitting of fees with non-attorneys. However, said contingent fees may be considered in the setting of maintenance.

Workers’ compensation and personal injury awards which accrue during the course of a marriage are marital assets. While this means that said awards are divisible between the parties, it should also noted that the pain and suffering of the injured spouse is a factor to be considered. This typically means that the injured spouse will still receive the greater part of the contingent award. Note that even if the injury occurred before the marriage, any part of the award which would replace wages lost after the marriage is still marital property (the thinking being that this money is a substitute for income which would have been part of the marital estate).

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