No one wants to think about losing a loved one but when it happens, sometimes it can also bring surviving family members a bit of financial security in the event that they receive an inheritance. During a divorce, people often fear losing that financial security because they believe their inheritance will be divided as part of divorce proceedings. So, what will happen to your inheritance during a divorce?

Property Division During Divorce

Illinois is an equitable distribution state when it comes to divorce. This means that in the event that the couple cannot come to a fair and mutual agreement on their own, a judge will divide the marital property fairly, although not necessarily 50/50. Marital property includes assets that were acquired during the marriage, while separate property includes any assets that one spouse acquired before the wedding and brought into the marriage with them.

Under Illinois law, inheritances are not considered marital property. This holds true even if the inheritance was accepted after the two spouses were already married. However, there are times when inheritances are considered marital property and so, it is important that all individuals know how to protect theirs.

When a couple gets divorced in Illinois, they will have to go through property division proceedings to divide their assets and their debt. Many couples understand this and know how complicated property division can become. To avoid these complexities, many couples decide to keep their property separate even after they have married. They might use separate bank accounts, take out individual lines of credit, and take other measures to ensure their property is not combined.

The question is, will this really help in divorce and does it make property division easier?

Property Division in Illinois

During a divorce, any property the couple acquired during the marriage is typically considered marital property. As such, it will be divided fairly during the proceedings, although not necessarily equally.

Man couples and individuals get confused about the differences between domestic partnership and marriage; the two are definitely not one and the same. While domestic partnership certainly offers legal benefits to a couple, it does not provide the same financial and legal benefits that marriage provides. If you are thinking about entering a domestic partnership or marriage and have questions, or you are planning to divorce or terminate your domestic partnership, call a Hinsdale divorce attorney for help.

Domestic Partnership Benefits

Domestic partnerships were originally created by states to allow some legal benefits to same-sex couples before same-sex marriage was legalized. Now, same-sex couples and different-sex couples get married as well as enter domestic partnerships. Some of the benefits of a domestic partnership include the following:

• Receiving healthcare benefits under a spouse’s employer-sponsored group plan. Many employers across the country are actually doing away with this benefit, but in Illinois, it is required of employers to offer the same health benefits to domestic partnerships that they offer marriages, according to the Illinois Department of Insurance
• Being able to receive medical updates and information of a sick or injured partner in the hospital
• The state of Illinois gives domestic partnerships the same legal benefits that a married couple has

Marriage Benefits

• Roth IRA can roll over to the other spouse when one dies
• Unlimited tax-free gifting between spouses
• Federal healthcare benefits
• Marriage is recognized in all states and countries, unlike domestic partnerships
• Married couples automatically inherit the deceased spouse’s assets if there is no will
• Ability to file joint federal income tax returns

Terminating a Domestic Relationship in Illinois

Just like marriages, domestic relationships do not always last. If a couple decides to terminate the relationship, they must file an affidavit of termination with the court. The domestic partnership is not over once the paperwork is turned in; there is a 30 day waiting period before the relationship is actually terminated legally. This process becomes much more complicated if the couple has children or shared property, as there will be custody and property division issues that must be resolved with a lawyer.

Division of marital assets, or marital property, is a big part of divorce. Illinois is an equitable property division state, which means that all marital property is divided fairly, though not necessarily equally. Income, real property, small business ownership or growth, stocks, and pensions are all examples of property that can be divided equitably between spouses if acquired during the marriage. However, a few types of property do not follow the normal procedure of equitable division. One of these types of property is money from a personal injury settlement or lawsuit.

When Did the Injury Occur?

Usually, all property acquired during an Illinois marriage is considered marital property. Lawsuit verdicts and even out of court settlements for personal injury cases can take multiple years to be awarded or agreed upon, respectively. As such, a settlement check may arrive during a marriage for an injury that occurred before the marriage began. In this case, the court would typically award all of the personal injury settlement money to the spouse who was injured because the money would not be considered marital property. If the accident did occur during the course of the marriage, whenever the verdict is reached or the settlement distributed, it could be considered marital property. This is not always the case, however.

Other types of civil settlements have been considered marital property even when the incident in question occurred before the course of the marriage, such as the Marriage of Rivera, 2016 IL App (1st) 160552, in which the court decided that a wrongful conviction settlement was considered marital property because the lawsuit occurred during the marriage. Yet, the forced coercion that leads to the wrongful conviction occurred before the marriage.