Anderson & Boback Logo
gifts or transfers to child during divorce

Do I Have to Disclose Any Gifts or Transfers to My Child During a Divorce? 

Published
Categorized as Property Division

Right before a divorce is filed, spouses are usually in a hurry to try and protect their assets from a possible distribution at the time of a divorce.  Sometimes this is done clearly in a bad-faith manner, such as gifts or transfers of money to a sister or girlfriend’s account.  However, other times, the parties are not aware that certain transfers or gifts, such as the transfer of an account to a child either of or outside of the marriage are problematic.

Gifts or Transfers of Funds to a Child and Dissipation

While transferring or gifting money or assets to a child may sound harmless, these types of transfers or funds or “gifts” are considered dissipation of marital assets.  Dissipation is briefly explained in Section 750 ILCS 5/503 of the Illinois Marriage and Dissolution of Marriage Act. Generally, expenditures held to constitute dissipation are extraordinary expenses that clearly do not further common marital interests. If the gifts or funds are marital assets then they must be included as part of the division of assets in the divorce.

Transfers to Children of the Marriage

A typical example is the transfer of an asset to that child, such as a savings account, CD, money market account, car purchases, or actual cash funds to a child.  The issue does not usually become contested for children that are of the marriage as the award can be counted as part of child support or college contribution.  However, for children that are outside of the marriage, a court may consider the transfer as dissipation and may award the other party a portion of the amount that was transferred.

Were the Funds a Marital Asset?

An important point to realize, however, is if this money was in fact a marital asset to begin with, or if marital money was added during the marriage.  If the funds that were used were acquired prior to the marriage or through a non-marital source, then the court will not consider the transfer as dissipation.  However, if the funds were acquired prior to the marriage, but income acquired during the marriage was used to fund the account, then 50% of the amount contributed would be considered the other party’s contribution amount.  This can be problematic for larger contributions if the funds given to a child have already been used or cannot be returned to the parent.

If you are concerned about a certain savings account that was being held for the benefit of your child but was not under the child’s name, seek trusted legal advice first.  Speaking to an experienced divorce attorney first will about the best way to preserve these funds from being distributed at the divorce.  For one, your spouse may agree to leave the funds to the children.  Secondly, you may be better off using these funds to pay off your debts, which will free up money to re-fund the savings account.  Before you actually transfer these accounts, it is important to be fully advised of the consequences. If you have already transferred or gifted accounts to your children, it is important to disclose it in Court than to hide it and face possible sanctions.

Anderson & Boback
Anderson & Boback is here to provide trusted legal advice in all divorce and family law matters, including questions about gifts or transfers of funds to your child during divorce.  Contact us today to schedule a confidential consultation and speak with a top Chicago divorce attorney.

Was this information helpful?

You May Also Like

A cohabitation agreement is an agreement or contract entered into between two people living together in the same household who are in a romantic relationship but not married. With more millennial couples choosing to live together, whether planning to marry…

When going through a divorce it's not uncommon to think "I never want to get married again!" But later, you may fall in love again and be ready to venture into marriage again. If you are planning to remarry, you…

While doing an initial consultation with an individual looking to get divorced, I have found it is common to get questions about whether it is possible for a divorcing couple to work together with an attorney to do a collaborative…

No one likes to pay spousal maintenance (formally called "alimony" or referred to as spousal support). When you are employed and your ex refuses to work, there is a greater reluctance to want to pay maintenance. In Chicago divorces, there…

Finding the best child custody lawyer in Chicago may seem like a daunting and intimidating process if you have never been involved in a legal dispute. This is especially true when it comes to a custody case involving your children…

Parenting disputes, and accusations of being a bad or unfit parent, are extremely common in the world of divorce, juvenile, and family law. Many parents enter the courtroom with a laundry list of accusations of poor parenting against the other…

RECENT POST
Categories
Archives
Anderson & Boback small logo

Download our Divorce Planning Guide today!

Get the information you need to prepare for divorce with our free resource Guide to Planning for Your Divorce.

What our clients are saying

Why Choose
ANDERSON & BOBACK?

Schedule a Discreet Consultation Today!

    Firm Overview
    ANDERSON & BOBACK?

    Anderson & Boback is a highly-respected, experienced Chicago family law firm, skilled in negotiation and litigation. When divorce and other family law issues make your life chaotic and uncertain, you want your case resolved as quickly and fairly as possible. Call Now 312-715-0870