Overhaul Nears Approval for Maintenance Calculations in Divorces
Have you heard about Illinois Senate Bill 3231? As of May 20th, 2014, it sits on Governor Quinn’s desk. If you’re in the middle of a divorce, or looking ahead to one, this Bill (if signed) will change your case. A re-write of Sections 504 and 505 of the Illinois Marriage and Dissolution of Marriage Act – that’s maintenance, also known as alimony – will reform the way calculations are done. And for people trying to figure out how much they’ll have to pay a spouse, or receive, it looks like good news.
First, a bit of background. Right now, there are a bunch of factors (below) that a judge should consider. The judge has discretion as to amount and duration of payments. This is why we’ve routinely had to counsel clients that calculating maintenance “is more of an art than a science.” Although over time cases generally establish a typical ballpark range of money/time that a person will have to pay, even for the most skilled attorneys, a loose estimated range is the best anyone could calculate. It’s fair to say maintenance has not always been entirely predictable.
Those factors, by the way, are:
- The income and property of each spouse;
- The needs of each spouse;
- The present and future earning capacity of each spouse;
- Any impairment of the present or future earning capacity of the person seeking maintenance due to that person being a stay at home parent or having forgone or delayed education, training, employment or career opportunities due to the marriage;
- The time necessary to enable the person seeking maintenance to acquire appropriate education, training, and employment, and whether the person seeking maintenance is able to support himself or herself through appropriate employment or is the custodian of a child making it appropriate that the person not seek employment;
- The standard of living established during the marriage;
- The duration of the marriage;
- The age, physical condition, and emotional condition of both parties;
- The tax consequences of the property division upon the economic circumstances of each person;
- The contributions and services by the person seeking maintenance to the education, training, career or career potential, or license of the other spouse;
- Any valid agreement between the spouses; and
- Any other factor the court finds to be just.
Got it? It’s not a quick study.
Those factors aren’t going to disappear, but now there will be guidelines that overlay the factors. The amount of maintenance will be calculated by taking 30% of the paying spouse’s gross income minus 20% of the payee’s (spouse receiving maintenance) gross income. If you and your spouse make under $250k (together) per year, then this is your calculation. One caveat is that the amount of maintenance, when added to the gross income of the spouse receiving maintenance, may not exceed 40% of the combined before gross income of a couple. Judges can deviate from this calculation based upon special circumstances. Basically, if you’re familiar with how child support is calculated (it’s a set equation based on percentages of income, and deviations can occur only for particular reasons), then this is going to feel familiar.
As you can see, the consequence of this change in law is that people are going to have a much better idea of what they’ll pay or get in maintenance. And that means less litigation: we believe maintenance is the most frequently fought-over issue in divorce; with a much clearer formula for both sides to reference, it seems likely that a lot of that fighting goes away. Why go to trial when you have a pretty solid idea of the result?
There are other changes too. For example, the length of your marriage will determine how long you pay maintenance if the proposed law is signed. The duration of maintenance will be calculated by multiplying the number of years married x the applicable factor in parentheses:
- 0-5 years (.20);
- 5-10 years (.40);
- 10-15 years (.60); or
- 15- 20 years (.80).
- In the event that you have been married for 20 or more years, the court has discretion to order permanent maintenance or maintenance for a period equal to the marriage.
To make sure you’re clear, let’s go through an example.
Say we have a couple making a combined gross income of $175,000 per year. The wife works for a local company and grosses $145,000 per year. The husband is a school teacher and grosses $30,000 per year. They’ve been married 18 years.
Step 1: The court determines if an award of maintenance is appropriate, i.e. eligibility, using the original 12 factors.
In our example, let’s say the husband worked while the wife completed her MBA, and then the husband stayed home with the couple’s three children until the youngest began kindergarten. The wife also recently inherited a large amount of property that belongs only to her. Given these facts, the court decides that husband should get maintenance.
Step 2: Apply the proposed formula.
$145,000 x 30% = 43,500 *wife
$30,000 x 20% = 6,000 *husband
43,500 – 6,000 = 37,500
So, the husband would receive $37,500 per year in maintenance from the wife.
Step 3: Figure out the duration (again a formula)
Recall that their length of marriage is 18 years. If you look above, they’re under #4: 15-20 years (0.80).
18 years x 0.80 = 14.4
Under the proposed guidelines, the wife will be paying the husband maintenance for 14 years and 5 months.
If you’re already under a prior order for maintenance, you may have already pulled out a calculator to see what this equation does to the amount. Like most changes in law, we have to figure a lot of people are quickly going to ask for the changes to apply to them. We’ll have to see how the law will apply to older, existing maintenance orders, but it’s obviously an important question. Using the above example again, what about this scenario:
Husband and wife actually divorced back in 2005. The wife was ordered to pay maintenance for 10 years, terminating in 2015. The husband goes back to court, asking for a modification that extends his payments another 4 1/2 years.
Featured photo credit: [Maxine Garrison, “Divorce Group Sheds Tears For Husband Who Pays And Pays – Reform League Opposes System In Which Wife Tosses Away Hard-Earned Cash,” The Pittsburgh Press (Pa.), May 27, 1938, p. 28] at http://unknownmisandry.blogspot.com/2013/08/fighting-alimony-racket-in-1938.html