Am I Entitled to Part of My Husband's Family Business if We Divorce?

Full question:

My husband inherited part of his family business, when married, he ended up putting the end of the year earning or profit, in our joint account and my children's account. we also used the earning during our marriage when needed for the past 6 years. he know say, that his part of the business it is non marital, because its an inheritance. can this be concerned community property, because he commingling the funds into our joint bank account? can it then be marital asset?

• Category: Divorce
• Subcategory: Property Settlements
• Date: 04/07/2025
• State: Illinois

Answer:

Difficulties frequently arise when one party places his or her separate property in joint names, when a spouse commingles separate property in an account that contains marital property, or in the case of a business, when one spouse made active contributions to the growth of a business the other owned before the marriage. Generally, however, when separate and marital funds are commingled, the resulting asset is presumptively marital. The spouse who made the separate contributions can establish a claim to it by proving the nature and amount of the separate contribution.

The answer will be a matter of subjective determination for the courts, based on all the circumstances involved. Generally, separate property acquired before the marriage or by gift or inheritance during the marriage may be excluded from the marital estate if neither the property nor its income has been used for the common benefit of the parties during their marriage. Where the parties regularly use property acquired by one party before marriage for the common benefit of the parties, it is more likely to be available for consideration in dividing property. The frequency of use may be considered by the court in making the decision. in the case of a separate business, the court may consider contributions made by the other spouse to the business.

Marital property is generally considered to be all property acquired by a couple during their marriage or earned by either spouse during their marriage. It is all property owned by the marital estate. Generally, gifts or inheritances to either spouse along with any money or property earned prior to the marriage are the separate property of that spouse unless it is somehow "converted" into marital property. Joint property is property with more than one owner. In divorce law, joint property is distinguished from a marital asset, which refers to all property acquired during the course of the marriage, regardless of ownership or who holds the title to it. Marital assets may consist at least partly of joint assets. Joint property may be owned under different forms of ownership.

In cases where the asset is claimed to be converted to marital property by commingling, in order to prove the separate nature of the property, the other spouse may attempt to trace the funds used to separate property, such as when funds from a spouse's separate property home owned before marriage are used to purchase a joint home after marriage. In such cases, having documentation regarding the source of funding is used to trace the separate funds used to purchase the marital asset.

Generally, separate property acquired before the marriage or by gift or inheritance during the marriage may be excluded from the marital estate if neither the property nor its income has been used for the common benefit of the parties during their marriage. Where the parties regularly use property acquired by one party before marriage for the common benefit of the parties, it is more likely to be available for consideration in dividing property. The frequency of use may be considered by the court in making the decision.

The court makes a distinction between marital assets and separate assets Marital assets are assets acquired during the marriage. Separate assets are asset which one party acquired prior to a marriage and maintained as separate property, property inherited during the marriage and property received as a gift by one party during the marriage. A party can turn a separate asset into marital asset by commingling the asset. Examples include: adding a new spouse's name to a bank account, car title, or deed to the home as joint tenants with right of survivorship.

Gifts between spouses pose problems. Many courts presume gifts from one spouse to another to remain marital, rather than separate, property. Some courts allow this presumption to be rebutted with clear evidence that the gift was intended to be the property only of the recipient. Courts can also look at factors such as the intention of the giver, along with whether the gift is subsequently used by one or both spouses.

Illinois is a so-called "equitable distribution" state. This means that the division of property and debts between the divorcing parties should be fair and equitable, but not necessarily equal. While the trial court's discretion will not be disturbed on appeal without a showing of clear abuse, the court will consider the following factors:

1. The contribution of each spouse to the acquisition and preservation of the marital and non-marital property;
2. The dissipation by each party of the marital and non-marital property;
3. The value of the property set aside to each spouse;
4. The duration of the marriage;
5. The economic circumstances of the parties at the time the division of property takes effect;
6. Any pre-existing rights and obligations from previous marriages;
7. Any antenuptial agreement between the parties;
8. The age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each party;
9. The custodial provisions for any children;
10. Whether the apportionment is in lieu of or in addition to alimony;
11. The reasonable opportunities of each spouse for future acquisition of capital assets and income;
12. The tax circumstances of the property division.