If you’re wondering who keeps the house in an Illinois divorce, you’re not alone. For many families, the home holds memories and represents their largest investment.
However, the decision becomes more complicated when a vacation home or rental properties are also involved. Each property follows its own rules, so it’s important to review them carefully.
Fortunately, Illinois law doesn’t leave this decision to chance. The judge considers specific factors, and the couple has options for reaching a fair agreement that benefits both parties.
In this guide, you’ll learn how the fate of each property is decided and what alternatives are available. Keep reading to prepare for negotiations with reliable information before signing anything.
How Illinois Determines Who Keeps the Family Home
Illinois doesn’t automatically divide assets 50/50. Instead, state law (750 ILCS 5/503) requires the judge to divide them fairly based on each family’s circumstances.
That’s why determining who keeps the house in an Illinois divorce involves several steps. Understanding them from the beginning helps you negotiate without unexpected surprises.
Is the House Marital or Nonmarital Property?
The first step is determining whether the house is marital property, meaning it belongs to both spouses, or nonmarital property, belonging to just one spouse. As a general rule, the following criteria apply:
- A house purchased during the marriage is marital property, even if the deed is in only one spouse’s name.
- A house one spouse owned before getting married is generally considered nonmarital property.
- A house received as an inheritance or a gift intended solely for one spouse is also generally considered nonmarital property.
However, there are exceptions. For example, if the couple used marital funds to pay for or renovate nonmarital property, the law allows a spouse to seek reimbursement for those contributions.
What the Judge Considers
When the house is marital property, the judge reviews a list of factors established by the same statute. Some of the most important considerations when deciding what happens to the family home include:
- Each spouse’s contributions, including homemaking and childcare.
- The children’s stability and which parent is primarily responsible for their care.
- Each spouse’s income, age, and health.
- The couple’s remaining assets and debts, including the mortgage.
In fact, the law expressly states that the judge considers awarding the house, or the right to live in it, to the parent who has the greater share of parenting responsibilities.
Who Lives in the House While the Divorce Is Pending?
A divorce can take months, and an important question arises in the meantime. Illinois law (750 ILCS 5/701) allows a judge to grant temporary exclusive possession of the family home.
This means that only one spouse lives in the house while the case is pending. However, the judge grants this arrangement only when living together puts someone at risk.
Specifically, there must be a risk to a spouse’s or child’s physical or emotional health. In addition, a protective order is available in cases involving domestic violence.
Your Options for the Family Home
When deciding who keeps the house in an Illinois divorce, couples generally choose among three options. Each comes with different advantages and costs.
At KHK Family Law & Divorce Attorneys, we review these options with each client because the best solution depends on income, children, and each spouse’s plans.
One Spouse Buys Out the Other’s Share
Buying out your ex’s share of the house is common when children are involved. The spouse who keeps the property pays the other spouse their share of the home’s equity. These steps are important:
- Obtain a professional appraisal to determine the home’s actual market value.
- Refinance the mortgage so it is solely in the name of the spouse keeping the property.
- Sign a new deed transferring ownership to one spouse.
Refinancing is especially important. Even if your ex signs a deed transferring the house to you, their name remains on the loan until the lender approves a new mortgage in your name.
Meanwhile, if a payment is missed, both spouses’ credit can suffer. For this reason, the divorce agreement should establish a clear deadline for completing the refinancing process.
Sell the House and Divide the Proceeds
Selling the house makes sense when neither spouse can afford to maintain it alone or both prefer a fresh start. The proceeds are then divided according to the agreement. Before selling, calculate these costs:
- Real estate agent commissions.
- Closing costs and any repairs requested by the buyer.
- Capital gains taxes, if the home’s value has increased significantly.
Regarding taxes, federal law generally allows an exclusion of up to $250,000 in capital gains per eligible individual, or $500,000 for eligible couples filing jointly, subject to certain requirements.
On the other hand, when a house is transferred from one spouse to the other as part of a divorce, federal law generally does not impose taxes on that transfer between them.
Keep the House Together for a While
Some parents decide to keep the house in both spouses’ names until the children finish school. This allows the children to maintain their home, neighborhood, and routine.
However, this arrangement requires clear rules. The agreement should specify who pays the mortgage, property taxes, insurance, and repairs, as well as when the house will be sold.
Vacation Homes and Second Properties
Many Illinois families own vacation homes in Michigan, Wisconsin, or Florida. In general, a vacation home in a divorce follows the same rules as the primary residence.
However, the property’s location changes certain aspects of the process. An Illinois judge can determine how the property should be divided, but cannot directly change a deed recorded in another state.
Instead, the judge can order one spouse to sign the documents needed to transfer the property to the other. For this reason, legal assistance in that state may sometimes be necessary.
It’s also important to review the property’s taxes, insurance, and maintenance costs because those expenses continue while the couple decides who will keep it.
Rental and Investment Properties
Rental properties in a divorce require a more detailed analysis because they have value not only as real estate but also as assets that generate monthly income for the family.
Valuing an Income-Producing Property
To divide a rental property fairly, it’s important to look beyond its sale price. Specifically, the following details deserve careful review:
- The property’s market value based on a professional appraisal.
- The monthly rental income and payment history.
- Fixed expenses, such as the mortgage, taxes, insurance, and maintenance.
- The taxes that would be owed if the property were sold.
With this information, the couple can compare the actual value of keeping the property with the value of receiving other assets. This helps prevent either spouse from accepting a deal that looks attractive but turns out to be costly.
Mortgages, Tenants, and Expenses
While the divorce is pending, tenants remain bound by their leases, and mortgage payments continue to come due. Someone must therefore collect the rent and pay the expenses.
Ideally, the spouses should sign a written temporary agreement or ask the judge to decide these matters. Keeping receipts and financial records also helps prevent disputes and protect the property’s value.
Mistakes to Avoid With Property During a Divorce
Decisions about the family home during a divorce are often emotional. Before determining who keeps the house in an Illinois divorce, consider the following:
- Keeping a house you can’t afford to maintain. The mortgage is only one expense; property taxes, insurance, and repairs also matter.
- Failing to refinance. If your ex remains on the mortgage, both of you remain tied to the same loan.
- Ignoring taxes when selling. A poorly planned sale reduces the money each spouse receives.
- Skipping a professional appraisal. Estimating the home’s value without a proper assessment can lead to an unfair agreement for either spouse.
Avoiding these mistakes is easier with professional guidance. At KHK Family Law & Divorce Attorneys, we review the numbers with you before negotiations so you can make decisions based on accurate information.
FAQ
Does the Wife Automatically Keep the House in Illinois?
No. The law treats both spouses equally. To determine who keeps the house in an Illinois divorce, the judge considers the children, income, and assets.
Can I Keep the House if My Name Isn’t on the Deed?
It’s possible. If the house was purchased during the marriage, the law generally considers it marital property even if only your spouse’s name appears on the deed. The judge can therefore divide it as part of the divorce.
How Is the Value of the House Determined in a Divorce?
Typically, a professional appraiser estimates the home’s market value based on its condition and comparable nearby sales. If the spouses disagree, each can present their own appraisal.
Plan Who Keeps the House in an Illinois Divorce
Your home represents years of hard work, and a poor decision can affect your finances for a long time. That’s why it’s important to plan what to do with each property before negotiations begin.
At KHK Family Law & Divorce Attorneys, we explain who keeps the house in an Illinois divorce based on your circumstances, serving clients in Chicago and Lincolnwood.
Additionally, several members of the KHK Family Law & Divorce Attorneys team speak Spanish and offer a free, confidential evaluation. Contact us today to protect your home.
