Background
Laura Jennings sought dissolution of her marriage to Danny Jennings. During the marriage, Danny operated JENCO of IL Inc., which ran Subway franchises, and AJEM, Inc., which held real estate used by the franchises. The parties stipulated that JENCO was Danny’s nonmarital business.
The circuit court classified real estate acquired after the marriage as marital property, awarded Danny AJEM subject to a payment to Laura reflecting 40% of its appraised real-estate value, divided other assets, and awarded Laura permanent maintenance. It did not classify or otherwise address Laura’s retirement account, stipulated to be worth about $42,700.
The Court’s Holding
The appellate court affirmed the classification of AJEM’s real estate as marital property. Although Danny argued that the properties were acquired with funds from his nonmarital business, he did not provide documentation tracing the funds used for the purchases to nonmarital sources. He therefore failed to overcome Illinois’s marital-property presumption by clear and convincing evidence.
The court reversed in part and remanded because the circuit court made no factual finding whether Laura’s retirement account was marital or nonmarital, as required before property may be distributed. Because that determination could alter the marital estate, asset-and-debt division, and maintenance award, the appellate court declined to reach Danny’s remaining challenges to those rulings.
Key Takeaways
- A spouse claiming property acquired during marriage is nonmarital must trace its acquisition to a nonmarital source by clear and convincing evidence.
- Testimony without supporting tracing documentation did not overcome the marital-property presumption here.
- A dissolution court must classify a retirement account as marital or nonmarital before distributing the estate.
Why It Matters
The decision underscores that a nonmarital business does not, by itself, establish that later-acquired property funded through that business is nonmarital. Parties asserting a nonmarital source need records sufficient to trace the funds.
It also illustrates that an omitted asset classification can require remand and leave related property-division and maintenance issues open for reconsideration.