For most, their home is the single most valuable asset of the marriage. But did you know that in Illinois, if one owns a house prior to marriage, it is considered his or her non-marital property? Upon divorce, the owning spouse takes back the entire asset (including all the equity accumulated during the marriage).
Whether you are already married to somebody who owned a home before the marriage or are planning to marry somebody who currently owns a home, you have a few options to protect yourself:
• If you have not yet married, use a prenuptial agreement to protect yourself. You can contractually agree to an equitable arrangement reimbursing you for a portion of the contributions to (or increased value) the real estate during the marriage. If you are already married, you could achieve the same result using a postnuptial agreement. Please see our website about postnuptial and prenuptial agreements for more information.
• Additionally, whether you have married yet or not, your spouse may add your name to the title of the house, making you a joint owner, and thus, entitling you to a share of the equity in the event of a divorce. By conveying an interest to you for his or her non-marital home, your spouse converts that asset into a “marital asset,” thus including the equity in the marital pot in the event of a divorce. This works both ways obviously, so consider the consequence if you add your spouse to the title.
• If you or your spouse owned a non-marital residence, sold it, and put the proceeds into a jointly owned residence, the contributed money is gifted to the marital estate. As such, the contributing spouse is not likely entitled to any reimbursement, even though the source of the funds derived from his or her non-marital real estate.
If you or your spouse own a non-marital residence, please contact us to discuss your options. Likewise, if you are planning to marry someone who owns real estate, contact us know if you have any questions about your rights. Don’t enter into the marriage blind to your rights. Make informed decisions to protect yourself.