Maintenance

The Illinois Maintenance Calculation Conundrum: 2018 v. 2019

Published on: October 14, 2019 | Kollias, P.C.

The Illinois maintenance law went through a major overhaul between 2018 and 2019 in that the calculation for the amount of maintenance changed and the tax treatment of maintenance payments changed because of the new tax laws. Imagine a scenario where a judge enters a divorce judgment in 2018 that awards maintenance (alimony) to the wife, but the amount is not set at the time. The judgment just says that upon the occurrence of a specific event, the wife will be awarded guideline maintenance. The judgement does not specifically state whether the 2018 version or 2019 version of the law should be used to determine the “guideline” amount, however.

Fast forward in this scenario to March of 2019 when specific maintenance triggering event occurs. Using the 2018 version of the law, the wife would receive $400 each month for maintenance, however, using the 2019 version of the law, the wife would not be entitled to any maintenance at all. Which law should be used? Does it matter that the 2018 judgment says that the wife was in need of maintenance?

Case Study: Undue Hardship & the Illinois Uniform Premarital Agreement Act

Published on: July 8, 2019 | Kollias, P.C.

Section 7(b) of the Illinois Uniform Premarital Agreement Act states that if a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the prenuptial agreement undue hardship in light of circumstances not reasonably foreseeable at the time of the execution of the prenuptial agreement, a court, notwithstanding the terms of the prenuptial agreement, may require the other party to provide support to the extent necessary to avoid such hardship. The following is a case study involving the application of these principles.

In the case of In re the Marriage of Barnes, the Appellate Court for the Fourth District analyzed what constitutes undue hardship and unforeseen circumstances. In that case, Edward was the sole shareholder and chief executive officer of a company. He earned in excess of $250,000 per year. His wife, Sandra, quit her office job where she had been earning $19,000 per year in order to spend more time with Edward. Before their marriage, they signed a prenuptial agreement.

What Is My “Income” for Calculating Maintenance and Child Support?

Published on: March 4, 2019 | Kollias, P.C.

Whether it be maintenance to or from your current or former spouse, or support for your child(ren), your income is relevant in divorce and parentage proceedings. The fact that you are the person obligated to pay or the person who receives money from another does not change the need for your income to be defined before an order for support is entered.

“But what is my income? I am on social security benefits, or I run a business, or my income is constantly in flux. Surely, you cannot expect me to truly define my income. I’m special,” you say. Thankfully for you, the good and wise people of the Illinois legislature have defined what income is, and also what it isn’t, and they’ve done so in a way that isn’t confusing or contradictory at all. Rather than use a single definition for all family law purposes, they instead have defined income in three separate-yet-related statutes: the Uniform Interstate Family Support Act (“UIFSA”); the Income Withholding for Support Act, and the Illinois Marriage and Dissolution of Marriage Act (“IMDMA”).

New Illinois Maintenance Guidelines – Effective January 2019

Published on: January 28, 2019 | Kollias, P.C.

It seems like only yesterday that Illinois amended the maintenance statute to put new guidelines in place regarding maintenance, formerly known as alimony. In fact, there were a couple of amendments, one in 2014 and another in 2017, which changed the way the courts calculated the amount and duration which one spouse would have to pay to the other during and after the divorce proceedings. Historically, maintenance paid was tax deductible to the payor and deemed taxable income to the payee.

Then, in 2017, Congress passed the Tax Cuts and Jobs Act, which altered the tax treatment of maintenance payments ordered on or after January 1, 2019. Specifically, under federal law, maintenance would no longer be tax deductible to the payor, and would no longer be treated as taxable income to the payee. This change in federal law made Illinois’ relatively new maintenance guidelines obsolete.

Retirement and the Obligation to Pay Maintenance

Published on: April 16, 2018 | Kollias, P.C.

Congratulations! Your dream of retiring is about to become a reality. You’ve worked hard your whole life. Sure, the divorce set you back financially, but it was years ago. You have prudently saved and invested your money. It wasn’t easy to do, especially having to write that maintenance (alimony) check to the ex each month. Wouldn’t it be nice to finally cash out and spend that money traveling the world or vacationing? The bags are packed, and the tickets have already been paid for. You’ll want to send a postcard to your loved ones from where ever you are. Before you take flight, however, you may want to re-read your judgment for dissolution of marriage.

Upon reading it, you snap out of your dream and you realize that your support obligation remains in full force and effect. Your maintenance obligation doesn’t automatically terminate upon your retirement. Sweat begins to form at your brow, nervousness comes over you, and panic sets in. However, you can rest easy, because Illinois law affords you some relief.

Imputation of Income for the Purposes of Calculating Maintenance in Illinois

Published on: January 9, 2017 | Kollias, P.C.

Section 504 of the Illinois Marriage and Dissolution of Marriage Act addresses maintenance. The Internal Revenue Service calls it “alimony” on tax forms, and it’s sometimes called spousal support.

Under the law, upon the entry of a judgment for dissolution of marriage (a divorce decree), one spouse may be entitled to maintenance, either for a specific duration of time or permanently. Before awarding maintenance to one spouse, the court must first determine whether an award of maintenance would be appropriate. Just because the parties have been married a long time or have disparate incomes,that does not necessarily mean one spouse is entitled to maintenance. Before the court may make a decision about how much maintenance is appropriate and for how long, the law requires the court to first decide whether maintenance is appropriate, after considering the following factors:

In Illinois, When Is a Reduction in Income Sufficient to Reduce Child Support or Maintenance?

Published on: November 19, 2015 | Kollias, P.C.

Imagine the following scenario: Donald and his wife Melania decide they want to get a divorce. Donald has been employed as the President of the United States for the past two years, where he earns a salary of $400,000, and receives travel, expense, and entertainment perks. Melania mostly spends her days shopping on QVC, pampering herself at the spa, and taking tennis lessons while the nanny watches their son, Junior. In the judgment of dissolution of marriage, the court orders Donald to pay Melania $20,000.00 each month for child support until Junior attains the age of 18.

Two years pass after the divorce, and Donald finds himself running for reelection. However, because the stress of the first presidency took its toll on Donald, he goes to the barber and gets a buzzcut, in a vain attempt to assert some semblance of control over his life. Without his signature hairstyle, his polling numbers plummet, and he loses the election in a landslide so dramatic that even Walter Mondale has to laugh.

Donald now finds himself out of work, and struggles to find a suitable career in which to apply his unparalleled talent for bombast and bluster. He applies for a slew of entry level positions on monster.com, to no avail. Every prospective employer tells him that he’s overqualified. Destitute and feeling like he’s run out of options, Donald decides to start an extermination business called “Cockroach, You’re a Loser.” Donald exhibits a newly-discovered knack for the entrepreneurial, and nets a tidy profit of about $25,000.00 in his first full year of business. Because it is a far cry from his former earnings, Donald files a petition to reduce his child support obligation based on an involuntary reduction in income. Fearing a drastic reduction in her own standard of living, Melania asks the court to deny Donald’s request.

Non-Marital Property Under Illinois Law: How It Can Affect Maintenance and Property Division

Published on: July 12, 2015 | Kollias, P.C.

In a divorce, the Court has the obligation to equitably divide the marital assets and debts, and determine whether maintenance would be appropriate. While non-marital property is not subject to being divided in a divorce, it may have a profound impact on the appropriate division of the marital assets and debts. It may also be considered in determining how much maintenance should be paid.

Therefore, the first question is what is “marital property?”

Section 503(a) of the Illinois Marriage and Dissolution of Marriage Act defines marital property as all property acquired by either spouse subsequent to the marriage, except the following, which is known as non-marital property:

property acquired by gift or inheritance;
property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift or inheritance;
property acquired after a judgment of legal separation;
property exclude by valid agreement of the parties (e.g., pursuant to a prenuptial agreement);
any judgment or property obtained by judgment awarded to a spouse from the other spouse;
property acquired before the marriage;
the increase in value of property acquired by a method listed in paragraphs (1) through (6), irrespective of whether the increase results from a contribution of marital property, non-marital property, the personal effect of a spouse, or otherwise, subject to the right of reimbursement provided in subsection (c) of this Section; and
income from property acquired by a method listed in paragraphs (1) through (7) of this subsection if the income is not attributable to the personal effort of a spouse.

The law is clear: both inheritance and property acquired before marriage are non-marital. This means that the party who owns the non-marital property will be keep it in the divorce, and the other party will have no claim to it. In cases where one spouse has a sizeable amount of non-marital property this may seem unfair, particularly in the case of a long-term marriage. Also, unlike property, a spouse’s non-marital income may be considered when determining the maintenance award to the other spouse.

Termination of Maintenance Due to Cohabitation Under Illinois Law

Published on: January 25, 2015 | Kollias, P.C.

In Illinois, maintenance can be terminated if the party receiving maintenance “cohabits with another person on a resident, continuing conjugal basis.” What does that mean? The answer is not as straightforward as it might seem.

To illustrate the analysis, an example is helpful. Let’s assume Danny married Sandy in 2008. During their marriage, Danny has earned a decent income. Sandy is unemployed. Danny believes that Sandy has been unfaithful, and he wants a divorce. Sandy also wants a divorce, and asks Danny if he would help her financially so she could get her own apartment while the divorce is pending. Danny refuses to give her a dime. At first glance, Sandy would seem to be a strong candidate to receive maintenance.

Subsequently, Sandy moves out of the marital residence and into the home of her long-time friend, Johnny. Danny believes that Sandy may be having an affair with Johnny because he saw a picture of Johnny kissing her on the cheek on Facebook. He has always suspected that she had feelings for him. Sandy denies that she is in a romantic relationship with Johnny. Rather, she claims they are simply friends and roommates.

After about a month of living with Johnny, it is clear that Sandy spends a few nights each week with Johnny. She sleeps in her own, separate room. She does not pay anything toward Johnny’s household bills, and she does not have any joint accounts with him. Sandy has, however, gone on a weekend trip to Galena with Johnny, and has spent Thanksgiving with him. Under this set of facts, would Sandy be entitled to maintenance from Danny? Or would her right to receive maintenance be terminated due to her cohabitation with Johnny. Continue Reading ›

The Law On Maintenance (a/k/a Alimony) Is Changing in Illinois: How It Will Be Calculated and What the Changes Mean For You

Published on: August 27, 2014 | Kollias, P.C.

Senate Bill 3231 was approved this month and will take effect January 1, 2015. It amends the current divorce law in Illinois on spousal support, the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/504. This means changes are coming regarding maintenance, which is also known as spousal support (also referred to as alimony by the Internal Revenue Service).

Unlike child support, in a divorce proceeding, the judge has discretion to determine whether or not to order maintenance. In order to decide whether maintenance is appropriate, the court will weigh several factors, such as the duration of the marriage, the standard of living established during the marriage, and the income and needs of each party. The court will also look at whether one spouse forwent higher education or career opportunities to stay home, and the amount of time it will take that spouse to achieve sufficient education or job training to become financially self-sufficient.

If the court decides to order maintenance, it can do so either in accordance with guidelines or not in accordance with guidelines. The court must use specific guidelines if the combined gross income of the parties is less than $250,000 and there is no multiple family situation. Interestingly, the definition of “multiple family situation” is nowhere to be found in the new statute. Presumably, it refers to a situation where a spouse has support obligations in more than one case.