Unanswered Questions About Spousal Maintenance in Chicago
By M. Scott Gordon
If you are in the process of getting divorced or are considering filing for divorce in Chicago, you may have questions about how the new spousal maintenance formula will apply to you. As an article from the Illinois State Bar Association explains, the new guidelines on spousal maintenance (or alimony), which went into effect on January 1, 2015, aimed to streamline the process of awarding spousal maintenance and to provide some objectivity or uniformity in the process. The changes to the law came about at the same time as a number of alterations to the Illinois Marriage and Dissolution of Marriage Act (IMDMA).
Yet numerous questions and concerns remain. For instance, is the interplay between spousal maintenance and child support calculations fair to the payor spouse or to the children for whom child support is awarded? What happens when part of the payor spouse’s income is also part of the marital assets she received as part of property division? And given that the new guidelines have a threshold gross joint income of under $250,000, at what point should the court make a determination about income when figuring out a spousal maintenance payment?
Financial Implications of Spousal Maintenance and Child Support Calculations
In some respects, the new law did answer some questions and eradicate some difficulties that judges used to have in awarding spousal maintenance payments. For instance, the new law makes clear that courts need to subtract spousal maintenance payments from a payor spouse’s income before calculating what that party owes in child support. In other words, the amount of child support will be determined by a supporting spouse’s net income after the judge calculates spousal maintenance payments. Then, once spousal maintenance payments have been deducted, the judge will use the spouse’s revised net income (minus the spousal support) to determine an appropriate amount of child support.
As such, an award of spousal maintenance can result in a lower child support payment. In addition, payee spouses need to remember that spousal maintenance payments under the law count as taxable income, while child support payments do not. Given that information, in certain cases a spousal maintenance award may not be as helpful as a payee spouse initially assumes.
Assets and Income from the Division of Marital Assets
Another issue that remains is how a court will treat income—for purposes of calculating spousal maintenance—that derives from a marital asset awarded to the payor spouse during the division of marital property. For instance, if a court defines a small business as a marital asset and values it at $200,000, and then awards the business to the payor spouse during the division of marital property, does that $200,000 get counted as part of the gross income of the couple? Generally speaking, courts defined income broadly under the IMDMA, but an experienced Chicago divorce lawyer can help you to better understand your options.
When Does the Court Look at Gross Income?
Given that the new guidelines have a threshold gross income of under $250,000, many Chicago residents want to know when the court will make a determination about income. Why is this important? Does the court take a snapshot of the couple’s joint income at the time of filing for divorce, or at the time it determines whether spousal maintenance is appropriate? Or, differently, will the court look at the couple’s most recent tax returns? Since incomes can change drastically in a short period of time—say one spouse loses a job after filing for divorce or, on the opposite end of the spectrum, gets a much higher-paying job—and changes to income could have a big impact on the amount of spousal maintenance awarded.
The IMDMA does not address this directly, and it is important to seek advice from an experienced spousal maintenance lawyer in the Chicago area. An advocate at our firm can answer your questions today. Contact Gordon & Perlut, LLC to discuss your case.
Check out our Illinois Maintenance Calculator here.