Thursday, August 21, 2014

Spousal maintenance guidelines become law in Illinois

A new public act dramatically changes how spousal maintenance is determined for divorcing couples whose combined gross income is less than $250,000.

The law, P.A. 98-0961, which was crafted by the ISBA Family Law Section Council, creates a formula for calculating maintenance based on the gross income of the parties and the length of the marriage. Up till now, judges calculated maintenance without using a statutory formula similar to the one that applies to child support awards, instead relying on a list of factors that appear at sections 504 and 505 of the Illinois Marriage and Dissolution of Marriage Act. As a result, maintenance decisions vary widely, and lawyers have found it difficult to predict what a court will do when awarding maintenance.

The new formula will change that, once a court makes the threshold decision that maintenance is appropriate in a given case. Although judges aren't required to use the formula, they must make a finding explaining why they did not.

Under the formula, a maintenance award should equal 30 percent of the payor's gross income minus 20 percent of the payee's gross income, not to exceed 40 percent of the parties' combined gross income when added to the payee's gross. Here's an illustration of how the math works.

Assume the soon-to-be-ex-husband grosses $50,000 a year, and his wife earns $30,000. Thirty percent of $50,000 is $15,000, and 20 percent of $30,000 is $6,000. Subtract $6,000 from $15,000, and voila – the husband owes the wife $9,000 a year in maintenance. Simple enough.

But things aren't so simple in this example, because that $9,000 payment would push the wife's annual gross over the 40-percent-of-combined-income limit. How? If you add $50,000 plus $30,000, you get $80,000, 40 percent of which is $32,000. That $32,000 – $2,000 more than the wife's annual gross – thus constitutes the cap on her income after maintenance. Therefore, the husband in this case owes the wife only $2,000 per year under the formula. (Note that the higher the payor's income is in relation to the payee's, the less likely the 40-percent rule is to limit the payee's award.)

A separate formula based on the length of the marriage establishes the duration of the maintenance award. For example, for a marriage that lasted five years, the maintenance award would continue for 20 percent of that span, or one year. On the other end of the continuum, maintenance could be permanent or last the length of the marriage for a couple that has been married 20 years or more.

"In Illinois, awards of maintenance have become increasingly and disturbingly inconsistent," ISBA Director of Legislative Affairs Jim Covington wrote in a letter to Governor Quinn before the law was enacted. "Even when facts and circumstances are remarkably similar, maintenance awards vary widely and unpredictably – from case to case, from courtroom to courtroom, from circuit to circuit, from region to region.

"Thus, with the best of intentions, judges, lawyers, and clients are routinely forced to reinvent the wheel with each and every case, wasting valuable time and money of courts and clients," Covington wrote. "Appellate cases often aren't as helpful as they should be because only the knotty and contentious cases get appealed – hard cases make bad law."

Covington noted that the law makes the following changes in addition to the formula:

  • Prevents a judge from ordering unallocated maintenance unless the parties agree to it;
  • Authorizes a judge to permanently bar maintenance for marriages of 10 years or fewer, something that is now only available when the parties agree or maintenance is paid in a lump sum;
  • Specifies that judges must subtract maintenance payments from the payor's income for purposes of calculating child support.

The bill "doesn't change the primary judicial responsibility – determining whether maintenance is appropriate" in the first place, Covington wrote. "If maintenance is appropriate, then guidelines can serve as a reference to assist judges and promote settling of cases."

The law takes effect January 1, 2015.

Posted on Aug 18, 2014 by Mark Mathewson

Jon D. McLaughlin
Bloomington Law Group LLC
Flanagan State Bank Building
2401 East Washington Street
Bloomington Illinois 61704
Skype: jmclaug2