Illinois Spousal Maintenance (Formerly Known as Alimony)
A new law on spousal maintenance (formerly known as alimony) in Illinois goes into effect January 1, 2015. The new law creates a mathematical formula to determine maintenance; much like one has been in use for years in determining child support.
While there undoubtedly will be numerous questions, issues and even unforeseen consequences of the new law, both positive and negative, the purpose of this article is to review the mechanics of the new maintenance formula.
Under the current law, whether a spouse is entitled to maintenance is based on the statutory factors detailed Section 504(a) of the Marriage Act. The factors include: the income of both parties; the property both parties have in their possession, including property granted to them in the divorce; the needs of both parties; the ability of both parties to earn a living, now and in the future; the length of the marriage; the health of both parties; and the standard of living established during the marriage. Currently, the first determination is whether a spouse is entitled to maintenance, then if so, the judge has the discretion to order the amount of maintenance and the amount of time maintenance would continue.
The current statute lists factors to be considered, buy it does not set any guidelines by which the judge is required to set the maintenance amount or duration, other than it has to be “reasonable”. This results in inconsistency as to the amounts and duration of the maintenance from judge to judge, and even from case to case, even when cases have very similar facts and issues.
The new statute is an attempt to eliminate the inconsistency. Both the old and new laws require the judge to first make a threshold finding that a spouse is entitled to maintenance, considering the same factors the court was to consider prior to the passing of the new law. Once the determination is made that maintenance is appropriate, the judge must apply the maintenance formula to set the amount, and the duration is established by a multiplication factor based on the years of marriage.
The formula applies only when the gross combined income of the parties is below $250,000.00. The maintenance formula is as follows: thirty percent (30%) of the payor’s gross income minus twenty percent (20%) of the payee’s gross income, the difference is then added to the payee’s gross income, and if that total is less than forty percent (40%) of the combined gross income of the parties, than the difference becomes the maintenance amount, however, if that total is more than percent (40%) of the combined gross income of the parties, then the maintenance amount will be reduced so that the payee’s income plus maintenance is forty percent (40%) of the combined gross income of the parties.
As an example, presume that the Husband earns $100,000 per year and the Wife earns $20,000 per year. Thirty percent (30%) of the Husband’s gross income is $30,000.00. Twenty percent (20%) of the Wife’s gross income is $4,000. The difference is $26,000. Since $26,000 plus $20,000 equals $46,000 and is less than forty percent (40%) of the total combined income of the parties, $26,000 would be the amount of maintenance to be paid per year.
Alternatively, presume the Husband earns $100,000 and the wife earns $40,000 per year. Thirty percent (30%) of the Husband’s gross income is $30,000.00. Twenty percent (20%) of the Wife’s gross income is $8000. The difference is $22,000. Since $22,000 plus $40,000 equals $62,000, and is more than forty percent (40%) of the combined income of the parties, the Wife’s maintenance award will be reduced so her income plus maintenance would not exceed 40% of the parties’ combined income, or $57,600. The Wife’s maintenance in this situation would be $17,600 per year. ($17,600 + $40,000 gross income = $57,600.)
Prior to the new law, the length of the maintenance was left to the discretion of the judge. Under the new law, the duration of the maintenance is determined by calculating the length of the marriage by a factor determined by the length of the marriage. For marriages lasting 0-5 years, the factor is 0.20; for marriages lasting 5-10 years, the factor is 0.40, for marriages lasting 10-15 years, the factor is 0.60; and for marriages 15-20 years, the factor is 0.80. For marriages 20 years or longer, the court can order permanent maintenance or maintenance equal to the length of the marriage. For example then, under the new guidelines, a marriage lasting 9 years, a maintenance award would be paid for 3.6 years.
Another significant change resulting from the new law is a judge no longer has the authority to order unallocated family support as part of a divorce. Unallocated family support is combining child support and maintenance obligations in one payment, taxable to the payee and deductible by the payor. Unallocated family support has been a strategy used to create tax savings for both parties since the payee normally has a lower tax rate than the payor. Unallocated support may still be awarded if both parties agree or by the Court in pre-dissolution temporary orders, but a judge can no longer order unallocated family support from the Court as part of the final judgment.
One final change is that the court can now order a fixed maintenance term for marriages less than 10 years in length with a fixed termination date. Previously, the court had no authority, absent the parties’ agreement, to order a set date for the termination of maintenance.
The new maintenance calculation is a drastic change in the way maintenance is determined in Illinois. While this formulaic approach to maintenance will certainly create more consistency and predictability, it may prove to be more rigid than parties might desire. It takes income into account, but not debt. As with any new legislation, the strengths and weaknesses will be seen as the new provisions are implemented, and it remains to be seen how the new statute will ultimately impact the resolution of divorce cases.
Divorce Law in Schaumberg IL
If you are contemplating a divorce, involved in one, or involved in post-decree proceedings, the changes in the law need to be addressed immediately in your matter.
Contact Robert M. Kaplan at the Law Offices of Robert M. Kaplan, PC and I will be happy to discuss your situation with you and render you the legal assistance you require.