Division of Pensions After a Long Separation Period

In most situations, the Husband and Wife have lived together up until or very close to the date one of them files a Petition for Dissolution of Marriage. But what about those situations where the parties have been separated for 10 or 20 years prior to the filing of a Petition for Dissolution of Marriage?

 

Pursuant to section 503(a)(2) of the Illinois Marriage and Dissolution of Marriage Act (IMDMA), all property acquired during the marriage, including pension plans, is presumed to be marital. As such, all property acquired after the separation of the parties but prior to a dissolution of marriage is presumed to be marital. The implication of this classification is that the court would likely divide the marital property 50/50 or 60/40, including the assets acquired after the date of separation. With new changes in the law in 2016, however, the courts now have the discretion to value assets and property as of the date of trial, date agreed to by the parties, or such other date as the court determines. As a result, depending on the facts, the court could decide to value property up until the date of separation.

 

This flexibility assists the working spouse where there has been a substantial increase to the value of the marital property after the separation of the parties. The working spouse can argue pursuant to section 503(d)(1)(iii) that the non-working spouse did not contribute to the increase in the value of the marital property after the date of separation. Conversely, the non-working spouse can argue that the increase in value would not have occurred, but for her contributions during the time the parties lived together, continued child care, etc. For couples that have been physically separated 10, 20 years and have only recently filed a Petition for Dissolution of Marriage, this would make more sense. For those parties that have been separated but continue to either live together or continue to combine resources, the working spouse may have a more difficult time getting a judge to value property prior to the date of judgment.

 

There is little to no Illinois case law on this point and, with the new changes to the law, the courts have even more discretion to decide which valuation date they will choose. In the end, Illinois courts are to divide property “equitably”, which may or may not mean an equal division. The test in any situation should be “fairness”, and depending on which side of the equation you stand, the best argument would be

that a certain valuation date or division of property would the most “fair” or “equitable” division in your case.

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