In re Marriage of Zamudio, 2019 IL 124676

- Case citation and parties
In re Marriage of Zamudio, 2019 IL 124676. Petitioner/Appellee: Louise Zamudio (formerly Louise Ochoa). Respondent/Appellant: Frank Ochoa Jr.

- Key legal issues
Whether permissive pension service credit purchased during the marriage (to account for respondent’s pre‑marriage active‑duty military service) is marital or nonmarital property under the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/503) and the Illinois Pension Code (40 ILCS 5).

- Holding/outcome
Illinois Supreme Court affirmed the appellate court: the permissive service credit purchased during the marriage with marital funds is marital property. The trial court’s contrary classification was reversed and the cause remanded for equitable apportionment of the pension.

- Significant legal reasoning (concise)
The Court applied statutory construction principles to §503 of the Act. Section 503 presumes property acquired during marriage is marital and separately presumes pension benefits acquired or participated in during marriage are marital; these presumptions can be overcome only by clear and convincing evidence that the property fits a statutory nonmarital category. The Court held that the respondent’s military service alone was not property; the permissive service credit became a pension enhancement only when purchased during the marriage with marital funds. Thus entitlement to the enhanced pension derived from the existing pension right and the purchase transaction during marriage — not from an automatically transferable pre‑marital property interest in military service. The Court rejected the view that enhancement of a nonmarital asset by marital funds automatically preserves the enhanced portion as nonmarital; instead, the timing and method of acquisition (purchase during marriage) controlled. The case relied on the derivative/nonderivative distinction discussed in prior decisions (e.g., Ramsey) and applied §503(b)’s pension presumption. The Court remanded for equitable apportionment consistent with those principles. (The appellate dissent argued for reimbursement rather than transmutation; the majority disagreed.)

- Practice implications for attorneys
- Treat buybacks or permissive service credits purchased with marital funds during marriage as presumptively marital pension assets.
- If asserting nonmarital status, be prepared to overcome the statutory presumption with clear and convincing evidence (traceable documentation showing acquisition falls within §503(a) exceptions).
- Preserve and document source of funds for any pension purchase; plan reimbursement claims under §503(c)(2)(A) when appropriate.
- On valuation and settlement, obtain actuarial valuations showing pension with and without purchased credits to quantify marital share and negotiate or litigate equitable apportionment (or seek QDRO/appropriate remedial orders for public pensions).
- Counsel clients on timing: purchases made during marriage carry risk of inclusion as marital property.