How Investments Are Divided During Divorce in Illinois
All stocks, bonds, mutual funds, and commodity accounts purchased or acquired during the course of the marriage are marital property unless proven otherwise. That means they will need to be allocated as well, but this can be difficult as the value of these assets can significantly fluctuate.
The new law tries its best to compensate for this difficulty by considering the vesting schedule of the stock, whether it was granted for “past present or future efforts” at a job, and the length of time between the grant of the option to when it can be exercised. This could mean a judgment under the law works on a “wait and see” model – also known as “deferred distribution”, meaning the option will be allocated up later down the road when it's exercised.
This might mean that a stock is determined to have “no value” until the time it's exercised, in which case a prorated amount would be paid out to the other spouse.
Contrary to popular belief, stock options are not the only form of deferred compensation. Other such examples include performance-based compensation, bonuses, as well as paid time off and vacation. These forms of compensation should be considered a marital asset when it comes to dividing property considering they were awarded for work done during the marriage.
With regard to paid time off and vacation time, courts will only see these types of deferred compensation as marital property if the employee is likely to receive cash in lieu of using the time off. If the company will not pay the employee cash in exchange for the unused time off it should not be considered a marital asset.
Cash Deposit Accounts
Just like deferred compensation cash and cash deposit accounts (checking and saving accounts) should be split. This includes cash accounts that are only in one spouse's name.
Property Division Articles & Frequent Questions
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