When a relationship ends, it presents the opportunity to make life changes. For many, that change is a move to take a new job or be closer to family and friends. However, when kids and the courts are involved, a post-breakup move can create significant complications. When parents live in different states, and file parenting cases in different courts, it creates a dilemma as to which state can, and should, hear the case. And that question must be answered before the judge can make any actual decisions about the child. To resolve the dispute, the judges in those states are expected to communicate and agree on which state should hear the case. When facing this kind of situation, parents living in separate states need to know the court will look to rules in the Uniform Child Custody Jurisdiction and Enforcement Act to make this decision, the exceptions to that rule, and how both are considered and applied by the courts.
How Jurisdiction Works Under the UCCJEA In order to proceed with a case, a judge must first determine whether the court has a sufficient relationship to the child to allow the court to hear the case. This is called personal jurisdiction. Generally, personal jurisdiction is determined based on where someone lives. In child custody or parenting cases, the rule is that jurisdiction is based on where the child lives or has recently lived. When a child has moved during the six months prior to filing, jurisdiction is determined by applying the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA). What is the UCCJEA? The UCCJEA is a uniform state law applied throughout the United States to deal with cases involving children that have recently moved prior to the filing of a child custody or parenting case. Under the UCCJEA, the state where the child has lived for six months is the child’s home state and has jurisdiction over the child, which means that the court will hear the parenting case. If the child has recently moved with one parent, but the other parent stayed behind, the state where the child previously lived during that six-month period is the child’s home state. The purpose of the UCCJEA is to ensure that the state where the case is heard has “significant connections” with the child. Those connections can provide the judge with information about the child’s well-being, which assists the judge in deciding how to allocate time and responsibility between the parents. The Illinois Compiled Statutes sets forth the UCCJEA at 750 ILCS 36. Exceptions to the UCCJEA Rule While on its face the UCCJEA appears clear cut, there are exceptions to this rule that can make it worth litigating. Under the UCCJEA, the home state can decline jurisdiction if they determine that the other court is the more appropriate forum. Under the UCCJEA, when there is a jurisdictional question or dispute, the judges are tasked with communicating with each other about the case in order to decide which state has jurisdiction over the child. This communication allows the judges to discuss the facts and review evidence about the child and parents’ connections to each state. This communication presents an opportunity to challenge the rule by presenting evidence about the child’s significant connections to the non-home state and reasons why the case should not be heard in the child’s home state. Challenging Home State Jurisdiction When deciding whether to challenge home state jurisdiction, it’s important to understand what kinds of challenges are likely to be successful. One reason why a home state might decline jurisdiction is that important recent events have occurred in the other state that involve the child. If the family has had significant involvement with state authorities like the courts, police, school district, child protective services, or other government agencies tasked with caring for or protecting children, those agencies can provide important evidence about the family that will likely impact the judge’s decisions. The location of evidence, and of witnesses who might be called to testify about that evidence, is also a critical consideration to avoid excessive cost and inconvenience to the parties and their witnesses. Another reason for a home state to decline jurisdiction is if the child and parents have a significant relationship to the new state. For example, if the family recently relocated to a state where one or both parents have lived before, or have other long-term connections, the judges might decide that the new state is a more appropriate forum because of that history and those significant connections. A Divorce Attorney Can Help You Decide When and Where to File If you are planning to file a custody or parenting case in a state where you have lived for less than six months, it’s important to know that challenging home state jurisdiction is a separate legal battle. To avoid unnecessary legal costs and time spent, it’s critical to understand the UCCJEA home state rule and its exceptions. Talking to an experienced family law attorney about a potential challenge to jurisdiction can help you decide when and where to file and whether the facts of your case are compelling enough to warrant litigation. At Anderson & Boback, our Chicago family law attorneys have experience winning UCCJEA jurisdictional challenges and can help you decide the best way to move forward with your case. Contact us today to schedule a free consultation. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-custody/uccjea-jurisdiction-parenting-child-custody-cases/
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If you are looking at filing for divorce and bankruptcy, which do you do first? Couples may choose to file for bankruptcy jointly before getting a divorce. This will allow them to discharge both parties’ debts before filing for divorce and taking the issue of debt division out of the divorce process as much of their unsecured debts have been eliminated or discharged. The exemptions allowed also play a role in whether you file for bankruptcy before or after a divorce. If there is a joint filing, you may be able to double the allowable exemptions which may also be an incentive to file for bankruptcy before a divorce if you have assets to protect.
What is Exempt in Illinois (What You Can Keep When Filing Bankruptcy) If you are filing for bankruptcy in Illinois, the law allows you to keep certain personal property and excludes them from the bankruptcy. Here is a list of those exemptions:
In Chapter 7 bankruptcy, a bankruptcy trustee sells property that is not exempt and uses the proceeds of the sale to pay your debts. In Chapter 13 bankruptcy, you keep all your assets and pay the value of the property that is not exempt to unsecured creditors (credit cards, utility bills, etc.) over a period of time which is generally a repayment plan that takes 3 to 5 years. How long does bankruptcy take? If a couple is filing a Chapter 7 bankruptcy it can be completed in a few months. However, if they are filing for Chapter 13 bankruptcy, the process takes several years to complete since a repayment plan that has to be completed before discharge and that generally takes between three to five years. Impact of the Bankruptcy Abuse Prevention & Consumer Protection Act of 2005 People used to file Chapter 7 frequently, but in 2005 an amended to the Bankruptcy Laws changed this. Known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), it is now more difficult to file for bankruptcy under Chapter 7 (which is where most of the debtors’ debts are forgiven or “discharged”). Instead, more bankruptcy filings under Chapter 13 where debts are discharged only after repayment of some portion of the debts. Another change under BAPCPA is that you may not be able to discharge an obligation to pay a debt listed as property division in a marital settlement agreement or Judgment for Dissolution of Marriage. Bankruptcy Cannot Discharge Spousal Support or Child Support Obligations Domestic Support Obligations generally cannot be discharged in bankruptcy. Under the Bankruptcy Code states that: “A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) does not discharge an individual debtor from any debt- to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit.” Paragraph (5) is the exception known as “domestic support obligation”. Domestic Support Obligation is defined as a debt that accrues before, on, or after the date of bankruptcy discharge, that is (A) owed to or recoverable by a spouse, former spouse, their child or their child’s parent, legal guardian, or responsible relative or a governmental unit. (B) in the nature of alimony, maintenance, or support (including government assistance) of a spouse, former spouse, their child or child’s parent. © established or subject to establishment before, on, or after the date of bankruptcy discharge by a (i) a separation agreement, divorce decree, or property settlement agreement or (ii) an order of court; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and (D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child or child’s parent, legal guardian, or responsible relative for the purpose of collecting the debt. [11 U.S.C. 523(a)(15)] Creditors and Dividing Debts in Divorce You should be aware that the division of debts in a divorce does not affect each spouse’s liability to a third-party creditor like a credit card company. The credit card company is not a party to your divorce and the divorce court cannot undo any contract you have with your creditors. Even if there is an agreement that one party will pay certain debts or the court orders one party to pay a certain credit card, a creditor can attempt to collect a debt from either spouse. If the spouse who agreed to pay the debt fails to pay, the credit card company will come after the other spouse — for sure if that other spouse is listed as a cardholder on the credit card. You may have a right to seek reimbursement from your ex-spouse who failed to pay the debt they were ordered to pay, but this can be time-consuming and expensive. To avoid this problem, the spouses may want to get their debts discharged through bankruptcy before getting a divorce. Addressing Division of Debt in the Marital Settlement Agreement However, if there is debt to be divided, thoughtful drafting of a Marital Settlement Agreement is required. If one spouse agreed to pay credit card debt and discharges those debts in bankruptcy — this leaves the other spouse open to have to pay those if the credit card company comes after the other spouse. It is not always safe if the credit card is only in the name of the spouse that assumes the debt. In that case, if that spouse files for bankruptcy and the credit card debt is discharged, the Credit Card Company can still come after the other spouse who was not named on the credit card account under provisions of the Family Expense Act. Impact of the Family Expense Act The Family Expense Act provides that the expenses of the family and of the education of the children shall be chargeable upon the property of both husband and wife in favor of creditors and may be sued jointly or separately. First, it has to be a family expense that was incurred on the credit cards or, if it was not a family expense, that the expense was agreed to by the other spouse, or was for goods or merchandise purchased by or is in the possession of the other spouse. It may be rare for a creditor to come after a spouse that was not a named cardholder but it can happen and you must be aware. Family Expenses under Illinois Law
This list is not all-inclusive but just an example of those things that are considered family expenses in Illinois. Filing Bankruptcy During the Divorce Process When a spouse files for bankruptcy during the pendency of a divorce case — when the divorce is not yet final — there is an automatic stay provision that goes into effect that will likely delay the division of property until the bankruptcy is complete or the automatic stay is lifted by the bankruptcy court. This requires a continuance for any trial or court date to finalize a divorce so that the attorneys can go into Bankruptcy Court and lift the Automatic Stay that goes into effect as soon as someone files for Bankruptcy. The automatic stay stops collectors from contacting you once you file but also precludes a divorce court from diving the property which is now part of your bankruptcy estate. Bankruptcy and Discharge of Student Loan Debt An interesting decision came down recently where a bankruptcy judge ruled that $220,000 in student loan debt can be discharged. It has often been said that you cannot discharge student loan debt to the Federal Government. However, in this case, the debtor had an annual income less than $38,000, and his monthly income after expenses left him short $1,500 so according to the January 7, 2020 opinion by Chief U.S. Bankruptcy Judge Cecelia Morris of the Southern District of New York, the student loan debt was in fact dischargeable. Judge Morris considered whether the debtor could maintain a minimal standard of living if forced to repay the loans, whether an inability to maintain the minimal standard is likely to persist for a significant portion of the repayment period, and whether the debtor had made a good faith effort to repay the loans. Based on these factors, the debtor was entitled to discharge the student loan debt. Consult with an Experienced Chicago Divorce Attorney Before Your File There is not one best approach for everyone as each case has its own facts and set of circumstances that require consideration. If you are in the middle of a divorce or plan on filing for divorce and believe that bankruptcy will also be an issue, these matters should be discussed with your divorce attorney and a qualified bankruptcy attorney before any decision is made. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce/divorce-and-bankruptcy-collide/ One of the common parenting mistakes a child of divorced parents makes is relative to that dreaded question: “Do I HAVE to go?” Divorced parents or parents that have never been married hear this question all too often. Hearing your child ask that question time and again can certainly get old after a while.
Divorced Parents Should Support a Child’s Bond With the Other Parent However, in most scenarios, it is best to encourage your children to attend parenting time with their other parent. This is quality time which helps them bond (or remain bonded to) the other parent. It also ensures that you are not held in contempt of court for violating a parenting order. You can also be accused of alienating your child from the other parent, or guilty of visitation interference, which is a crime in Illinois. The bottom line is that the court order must be followed, both to keep you protected, as well as for your children’s best interests. Here are a few more helpful tips for divorced parents to remember while parenting a child of divorce in 2020: 1. Do not talk badly about your ex. Just do not do it, ever. Your children pick up everything you do, from the tone in your voice to body language, and if you don’t like your ex, I can guarantee you that they already know it. You don’t need to remind them of your dislike for the other parent they love. 2. Do not talk badly about your ex’s new significant other, family, friends, etc. Just like the rationale in tip #1, the same advice applies here. Just don’t do it. Believe me, you are not making this situation any easier on your children by reinforcing what they already know. 3. Be there for your child to talk to or have someone available. This could be a therapist, an older cousin, an older sibling, a trusted close friend, an aunt, an uncle, a teacher, someone. Your child needs an outlet to talk to about the things they cannot discuss with you, as they get older. It is healthy and having a neutral third party can help them work through their emotions, especially regarding things they may not want to discuss with you. 4. Try to get along with your ex. This is not realistic in every scenario, for obvious reasons. However, you would be surprised at how liberating it can be for everyone to get along and push through the drama. The best tip for divorced parents or parents that are no longer together is to put the past behind you, so you can put your best foot forward in this new year! Co-parenting after a divorce or break up presents added challenges to parenting, especially when your child does not want to attend parenting time. Contact Anderson & Boback if you have questions about parenting time or other concerns that arise for divorced parents. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/parenting-time/divorced-parents-parenting-tips-2020/ Your office and dental practice will be assigned to you in the divorce without a doubt. The real question is: Will you have to give your spouse any money for keeping your dental practice? In essence, what is the value of your business?
There are plenty of professionals and articles written to help you determine the value of your business. An expert can look at the profit and loss statements, your receivables and the income generated each year. How much goodwill exists in your business? In cases with a business that only has personal goodwill, there is unlikely to be much value attached to that business. Sure, you’ll have some value attached to computers and office equipment, but you’ll also want to look at how much cash is on hand. How much is there in accounts receivables? How much inventory is there? Valuation of a Dental Practice in the Marriage of Schneider In your dental practice, your reputation, knowledge, and relationships will be essential to your business’s current and future value. We call this personal goodwill. The Illinois Supreme court looked at this in the case of In re Marriage of Schneider, 214 Ill.2d 152, 291 Ill. Dec. 601, 824 N.E.2d 177 (Ill. 2005). Case Background In the Schneider case, dentist Earl Schneider filed a petition to divorce his wife, Jodi Ann. At trial, one of the stipulations the parties agreed to was that Jodi would waive maintenance in lieu of taking a disproportionate share of the marital estate. The court entered its judgment and one of the contested issues was the value of Earl’s dental practice. In valuing Earl’s dental practice, the circuit court excluded personal goodwill and accounts receivable from the fair market value of the practice. The circuit court also allocated 67% of the marital assets to Jodi, noting the duration of the marriage, the reasonable opportunity of each spouse for the future acquisition of capital assets and income, and that the apportionment of assets was in lieu of maintenance. Personal Goodwill and Accounts Receivable in Dental Practice The appellate court affirmed the circuit court in part and reversed in part. 343 Ill.App.3d 628, 278 Ill.Dec. 485, 798 N.E.2d 1242. The appellate court held that personal goodwill and accounts receivable should have been included in the valuation of Earl’s dental practice. The appellate court, therefore, reversed the circuit court’s valuation of the dental practice and remanded for a redistribution including those assets. The Supreme Court allowed Earl’s petition for leave to appeal the appellate court’s holding that personal goodwill and accounts receivable should have been included in the valuation of the dental practice. Prior to trial on the petition for dissolution, the parties agreed that Earl’s gross income as a self-employed dentist was $325,000, with a net income of $195,000. Earl’s expert witness testified that the fair market value of the dental practice was $346,300. Of this amount, $311,300 was attributed to personal goodwill and $35,000 to fixed assets. The fixed assets included property and equipment, but did not include cash on hand, accounts receivable, cash surrender value of life insurance, and loans due from officers. The expert testified that the accounts receivable were merely a reflection of future income. Jodi’s expert witness testified that the fair market value of the dental practice was $481,000. From the $481,000, the expert attributed $144,413 to tangible assets, including accounts receivable, furniture and equipment, cash surrender value of insurance, and inventory. The remaining $336,587 was attributed to intangible assets, although those intangible assets did not include personal goodwill. The intangible assets were described as dental records, the leasehold interest, a trained workforce, intellectual property, trade names, and enterprise goodwill. The trial court valued Earl’s dental practice at $38,300. This amount included $8,000 in inventory and $30,330 in furniture and equipment. The circuit court did not include accounts receivable, cash on hand, cash surrender value of life insurance, and loans due from officers in the valuation, accepting Earl’s argument that including those items in the valuation would result in a double-counting of those assets. In addition, the circuit court held that any goodwill that existed in the practice was personal goodwill that should not be included in determining the fair market value of the dental practice. The circuit court stated that Jodi’s expert witness had failed to establish the existence of any enterprise goodwill in the practice. On appeal, the appellate court was charged with determining if the trial court erred in its valuation of Earl’s dental practice. Jodi argued that the circuit court should have included goodwill, accounts receivable, loans due from officers, cash surrender value of insurance policies, and cash on hand in its valuation of the dental practice. Personal Goodwill Considered Divisible Marital Asset The appellate court reversed the circuit court in part and found that the trial court erred in excluding personal goodwill from the valuation of Earl’s dental practice. The court held that personal goodwill is not to be considered a divisible marital asset, however, that if goodwill is not considered as part of a spouse’s income-generating ability relative to a maintenance award, it may be considered in the valuation of a professional practice as a divisible marital asset. In addition, the appellate court held that accounts receivable are business assets and should have been included in the valuation of the dental practice. The Appellate court also found that the trial court erred in not including the cash on hand, cash surrender value of insurance policies and loans due from officers in determining the fair market value of the dental practice. The court ordered the case to go back to the trial court for a reevaluation. Appeal to the Illinois Supreme Court on Personal Goodwill Earl then petitioned the Supreme Court of Illinois to hear his case, which they accepted. Earl asked the Supreme Court to decide if the goodwill and accounts receivable should have been included in the valuation of his dental practice. The issue in this case-whether personal goodwill must be considered a divisible marital asset when spousal maintenance is not awarded-presents an issue of law and not a question of fact. In support of his claim that the appellate court erred in considering personal goodwill in valuing his dental practice, Earl contends that the appellate court majority misinterpreted this court’s decision in In re Marriage of Zells, 143 Ill.2d 251, 157 Ill. Dec. 480, 572 N.E.2d 944 (1991). At issue in Zells was the division and distribution of marital property between a lawyer and his spouse. Zells, 143 Ill.2d at 252, 157 Ill.Dec. 480, 572 N.E.2d 944. The circuit court and the appellate court had found that the goodwill in the husband’s law practice was a marital asset subject to division and distribution. Zells, 143 Ill.2d at 252, 157 Ill.Dec. 480, 572 N.E.2d 944. In addressing the issue, this court noted that the appellate court districts were divided on the issue of whether personal goodwill should be considered in valuing a professional practice. Zells, 143 Ill.2d at 254–55, 157 Ill.Dec. 480, 572 N.E.2d 944. For example, the Fifth District, in In re Marriage of White, 98 Ill.App.3d 380, 384, 53 Ill.Dec. 786, 424 N.E.2d 421 (1981), had held that goodwill was a factor to be considered in valuing a professional corporation. The White court had noted that “despite the intangible quality of goodwill in a professional practice, it is of value to the practicing spouse both during and after the marriage and its value is manifested in the amount of business and, consequently, in the income which the spouse generates.” White, 98 Ill.App.3d at 384, 53 Ill.Dec. 786, 424 N.E.2d 421. In contrast, the First District had taken the position that the goodwill of a professional business was not marital property subject to division. In re Marriage of Wilder, 122 Ill.App.3d 338, 77 Ill.Dec. 824, 461 N.E.2d 447 (1983). In re Marriage of Courtright, 155 Ill.App.3d 55, 107 Ill.Dec. 738, 507 N.E.2d 891 (1987). The appellate court in Courtright stated that: “Although many businesses possess this intangible known as goodwill, the concept is unique in a professional business. The concept of professional good will is the sole asset of the professional. If goodwill is that aspect of a business which maintains the clientele, then the good will in a professional business is the skill, the expertise, and the reputation of the professional. It is these qualities which would keep patients returning to a doctor and which would make those patients refer others to him. The bottom line is that this is reflected in the doctor’s income-generating ability.”Courtright, 155 Ill.App.3d at 58, 107 Ill.Dec. 738, 507 N.E.2d 891. In essence, although goodwill had not been considered in the trial court’s valuation of the husband’s business itself, goodwill was a factor in examining the husband’s income potential. The court in Courtright concluded that, although goodwill had not been considered in the trial court’s valuation of the husband’s business itself, goodwill was a factor in examining the husband’s income potential. The court held that to figure goodwill in both facets of the practice would be to double count and reach an erroneous valuation. In Earl’s case though, Jodi had already waived maintenance. She asked the reviewing courts to let her change that stipulation in light of the trial court’s ruling, but that was not allowed. She’d already waived maintenance, and the trial court had already given her a disproportionate share of the marital estate due to that waiver. The Supreme Court was not going to allow her to change that now because she didn’t get the ruling she wanted. In this case, the personal goodwill in Earl’s dental practice was considered by the circuit court in assessing the criteria used to award Jodi a disproportionate share of the marital assets. Any further consideration of that goodwill in valuing Earl’s dental practice would amount to an impermissible double counting. The trial court’s ruling evaluating Earl’s dental practice was allowed to stand. The Supreme Court overruled the appellate court on this issue. Uncollected Accounts Receivables are Assets to a Dental Practice The Supreme Court agreed with the appellate court however that the accounts receivables have not been collected, so they are assets. They have been earned and have a known value and, thus, are distinguishable from future earnings or income-generating ability. Because accounts receivable have a known value, a court can properly consider accounts receivable as assets of the business. Accounts receivable are future income only in the sense that they will be collected in the future. Accounts receivable are not future income in the sense that they are assets considered by a circuit court in determining a party’s income-generating ability for purposes of maintenance or child support awards. The fact that the accounts receivable may not be collected until a future date does not transform those assets into speculative or future income. Consequently, we agree with the appellate court that the circuit court should have considered the accounts receivable in valuing Earl’s dental practice. The Supreme Court affirmed that portion of the appellate court’s order remanding this cause to the circuit court for a redistribution of marital property which includes accounts receivable, in addition to cash on hand, cash surrender value of life insurance, and loans due from officers. If you’re a dentist facing a divorce it is common to have concerns about dividing property including a professional business. When you need assistance and advice knowledgeable and experienced divorce attorneys, contact Anderson & Boback and we’ll be ready to help you with all aspects of your divorce including valuation and division issues surrounding a dental practice. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce/dividing-a-dental-practice-in-divorce/ In custody cases, invariably there is a comment by one of the parties that the other parent is just “crazy.” Even if that is true, and the other parent is diagnosed with a mental illness, how exactly does that affect custodial rights?
According to the National Institute for Mental Health, mental illness is a medical condition that affects a person’s thinking, feelings, and abilities to cope with the demands of daily living. This definition covers a wide variety of conditions, ranging from mild depression to severe schizophrenia or bipolar disorder. But the real question is, if a parent has mental illness, will the court grant them the majority of the parenting time with the child? Or if you are the one with the mental illness, will you be prohibited from keeping your child? Mental Illness and the Custody Process Mental illness can mean many things. There is a large array of diagnoses, and a lot depends on what the person does because of their illness. Are they required to take medication? If there are required, do they take it? Is the mentally ill person acting out in a violent fashion? There are many behaviors that are associated with mental illness. Some people manage their mental illness with medication, or therapy, or learn how to cope with their mental illness. For the person who decides not to use the conventional means and instead self medicates, then there is a problem. Essentially, no matter what your mental illness is, you can still have custody of your children if you are managing your illness. The courts determine who gets custody of the children based on the best interests of the child. Of course, everyone believes that they are acting in their child’s best interest, no matter how bad the behavior may be. Stability is the number one factor in my opinion. If you are stable and provide a stable environment for your child, your mental illness (if managed) will not be used against you. If your mental illness has you leaving your child home alone, then that is a different story. The best interests of the child is the primary goal when the court is deciding what is in the best interest of your child. Is it Mental Illness of the Stress of Divorce or Custody Battle? Sometimes it is hard to determine if the other parent is mentally ill, or just failing to act in their own and the child’s best interest due to the stress of the whole situation. People who believe that they might lose custody rights to their children aren’t always rational. But, how do you know if the other parent is going through a transition and not acting right, or there is a larger problem and they are mentally ill? Keep a record of the other parent’s behavior Providing the court with documentation of events and discussion you’ve had with the other parent will be important to your custody case. Keep in mind, while you aren’t allowed to tape a conversation you are having unless the other parent knows it, you can use any message recorded on your voicemail. Any message left for you should be saved and documented with the date it was received (if your recorder doesn’t record the date) as a foundation for that recording will be necessary at any hearing in court. If you and the other parent are using apps like Family Law Software or Talking Parents, those communications can be used as well. This evidence can be very beneficial to determine if mental illness exists. Of course, you and your attorney won’t You won’t be qualified to diagnose mental illness, but the documentation can be provided to a doctor or custody evaluator to assess the parenting situation better. Is an Order of Protection Necessary? You and your attorney will have to decide if the other parent’s behavior rises to the level of an order of protection. Protecting your child is the most important thing to do, but don’t use the court system as a sword against the other parent. No parent should seek an order of protection to gain the upper hand in litigation. Many people do it, and when found not to be credible, the fact that you seek an order of protection can be used against you. If the other parent tells you that he/she intends to harm you or the child though, an order of protection is likely a necessary step. Mental Illness Alone Does Not Prevent Parenting Time Keep in mind that mental illness alone doesn’t keep a parent from getting parenting time with their child. What is important is the parent’s behavior. Do they fail to show up for parenting time? Do they make unwarranted accusations toward you? Do they exaggerate events? When faced with facts that prove them wrong about those events, do they persist that they are right regardless? These all can be signs that something is not right with the other parent and corrective action will be necessary. Get Professional Help if the Stress of Divorce or Custody is Causing Problems If you are experiencing problems with the stress of the divorce or custody determination, you should seek professional help. Seeking a therapist’s help will not be held against you — not by the judge, not the child’s attorney, and certainly not the lawyers involved in the case. When a parent experiences extreme stress, the parties involved in the case welcome the fact that the parent is seeking professional help. When a parent is willing to get help and fix the problem, everyone is better off. Having a mentally ill parent in a case can delay the process and makes the case hard to settle it. Settling cases is always better than litigating them, and watching a parent suffer through the process without help is not helpful to the case. It is always better to have two rational people deciding what is in their child’s best interest. But, if you are having overwhelming thoughts and cannot cope with the case, by all means, call a therapist and get yourself into therapy. Everyone will be glad that you did. The Role of the Divorce Attorney with a Mentally Ill Client Let your attorney know that you are having trouble. Sometimes though, you may not know that you are having trouble and someone will need to be appointed to represent you. If you are not mentally ill, but just having a hard time dealing with the stress of the situation, confide in your attorney. Your attorney is not a therapist, but your attorney has dealt many times with mental illness and clients. Your attorney can be a great resource to you and can advise you on what to do next. Doing nothing and hoping it will all go away is not an option. Getting help is encouraged, so tell your lawyer what is going on and they will assist you. Perhaps family therapy is an option. Perhaps individual therapy will help. But doing nothing is not your best choice of options. Keep in mind that if you have a mental illness, so long as you manage it appropriately, you aren’t likely to suffer adverse rulings from the court. It is the person who cannot admit the problem or refuses to address it that suffers the consequences in court. Your Mental Illness is Likely Affecting Your Child No one thinks that their mental illness affects their child, but more than likely it does. Your spouse will likely try to demonstrate that your illness affects your child adversely, and will pull no stops in proving it. That shouldn’t keep you from seeking the help you need. The more you deny it, the worse it is for your child. You need to get adequate support for your problem and create a safe and healthy environment for your child. When you take the steps necessary to achieve that, you are demonstrating to the court that you are taking steps to be healthy and that will give you all you need to secure the custodial rights to your child. Illness is not an impediment to having custody, but your failure to commit to treatment very well could be the factor that guarantees your loss of custody. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/family-law/mental-illness-divorce-custody-case/ We plan for everything. As parents, we plan for our retirement, we plan for our child to attend college and save for that. And, as young adults, we plan for our career by going to college to gain the necessary education. Why then, do people fail to take steps to plan for divorce?
People tolerate their spouse longer than they should. They let the steam build and build, until one day, some minor annoyance causes an explosion and then announce, “I want a divorce.” That is a hard comment to come back from if you intend to stay in your marriage. Even those that enter into some kind of family therapy can still have a problem keeping their marriage intact once you’ve declared that you want a divorce. Before you explode and announce your intentions over dinner one night, think about what you are doing and where you want to go. Understand, I’m not advocating that you divorce. I love the people that ask me how I can sleep at night knowing that I’m profiting from the “dirty business of divorce.” Hey, I didn’t sleep with your best friend, I didn’t go out and drink all night and forget your anniversary, you’ve done all of that yourself. Trust me, I didn’t break up this family, this family was broken when I got it. You don’t have to divorce, you can seek family therapy and try and repair the damage you’ve done (or your spouse has done). When people come to me, their marriage is over and they want out. I do my best to make sure that they can get out with some shred of their former self. But enough about me… how should a person get ready for their divorce? Make a Plan for Divorce First, it often takes people years to come to terms with what they want to do. The decision to divorce rarely comes out of thin air. They’ve been thinking about it for a while. Exactly what should you know though before you tell your spouse? You need to think about what you want.
The Importance of Divorce Planning My practice is expanding more and more with divorce planning. More and more dads are wanting to work less and spend more time with their children. Moms know that they’ve been a stay-at-home mom and don’t have the finances to support herself if she divorces. You have to think long and hard about what you want in order to know where you want to go. This is where a divorce plan can make a big difference. Emotionally, it takes people years to come to terms with the loss surrounding divorce and to be able to think rationally about the whole process. Thinking rationally about the choices you need to make, doesn’t mean that you are cold or calculating, it makes you smart. Preplanning your divorce doesn’t mean that you are out to hurt your spouse. A rational person actually makes good decisions that aren’t emotional. The rational spouse isn’t fighting over the George Forman Grill. The rational person just goes and buys another grill. Money and Financial Issues When it comes to money, know that the courts want you to maintain the status quo. A person will have a hard time filing for divorce and then quitting their job. If there are no maintenance or child support issues, then the court doesn’t care if you quit your job, but your actions to quit your job and be a painter on the beach isn’t going to sit well with the judge if you have children or a spouse to support. Think about what you want. If you want to paint portraits of tourists on the beach, quit your job long before you file for divorce. If you work as a painter when you file for divorce, you are going to have an easier time if you’ve been doing that for a while. Your Personal Finances For the spouse without a lot of money or the spouse who doesn’t know where the family money is, start educating yourself. Nothing about your personal finances will be over your head. Meet with your financial planner if you need to. Get a book or take a class, but do something to educate yourself. Nothing feels better than being in charge of your own life, and if you don’t know where any of your money is, that can be disconcerting. You aren’t in control of your finances if you don’t know where it is.. Ask your spouse about them and insist that you be given the information. Look in the mailbox to see what is coming to your house. Pay attention and educate yourself about your finances. Your Career or Job If you don’t have a career, get one. Now is the time. Are you a stay at home mom? Do you have any training? If not, think about what you want to do and sign up for a class. Think about a profession that can take care of you. While I love my Cricut machine and the crafts I make using it, that profession isn’t likely going to support me in the lifestyle I’d like or need. You don’t have to go out and become a lawyer, but I do recommend giving some thought as to the choice of what you want to do, so you can be self-supporting. Getting a job doesn’t mean you will be precluded from getting maintenance, but having your own income and being able to support yourself can be very liberating. Parenting Time If you are a parent that spends 60 hours a week at the office, how is that going to impact the parenting time you want? If you want to take a lesser paying job that gives you more hours at home with your kids, the time to do that is before you file for divorce. Remember — a family court judge wants to maintain the status quo to minimize disruption for your children. If you want more responsibility for doing things for your kids after the divorce, then the time to step up and start doing more is now.
Once you’ve filed for divorce, there is going to be a hard look at what you have done with or for your child before you filed. Seek Support from a Coach Think about a support system too. Your friends won’t want to listen to the daily drama of your divorce, but a support system can help you achieve your goals. Consider a coach. I often use coaches in my life when I want to achieve something. When you want to lose weight, nothing keeps you more in line with your goals than your coach. Want to write a book? Get a coach. Coaches help you keep on point and help you achieve your goals. Sometimes the coach can help you decide what your goals are. After you’ve figured out what you want to do, get a coach to help you get there. Get Help from a Therapist Some people will require a therapist to get in the right place emotionally. The courts have no problem with people that are engaged in therapy. Typically, both parties need some sort of therapy, and knowing people are in therapy says a lot about them. It says that this person is interested in exploring potentially negative things and will attempt to fix them. That the person is open for change and hopefully be able to come to the negotiation with some problem-solving skills. Don’t share your therapy sessions with your spouse or friends, however. This is about you and what you want to discuss in therapy. There is no reason to disclose to your spouse that you’ve been worried about all the drinking you do and you want to correct the behavior or get into treatment. All of these comments could be used against you later, so keep the contents of what you and the therapist discuss private. Likewise, don’t advertise things about yourself on Facebook or tweet about stupid and embarrassing things you’ve done. Anything on social media could be used against you later. Broadcast positive, loving pictures of your family or what you are doing with your child, and keep your therapy and whatever is going on negatively, keep to yourself. Your Divorce Lawyer Can Help You Plan for Divorce In the beginning stages, before you divorce, my role is somewhat like that of your coach. We’ll be here to help you decide exactly what you want out of the divorce and how you are going to achieve it. As divorce attorneys, we often work with your mental health professionals, your financial advisors, and your coach if you’ve hired one. Our goal is to ensure that when you finalize your divorce, that you’ve come out of the process with your dignity intact. You’ll be financially solvent and you’ll have a good relationship with your children. Divorce is hard and it is hard on everyone — your lawyer included. If you’ve got a clear mind and you handle the divorce process rationally, you will be surprised at how quickly the process can go. Everyone, including your children, will come out of the process with the least amount of turmoil if you take the time to plan for divorce. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce/plan-for-divorce-in-the-new-year/ A while ago, I wrote a blog about child relocation cases. I analyzed and cited the most recent cases that had come down from the Appellate Court and discussed the importance of certain findings by the court in each of those cases. The analysis was supposed to help litigants and even attorneys look at the facts in their own case and plan accordingly. Then one of those cases, In re Marriage of Fatkin, (2019 IL 123602) was reversed by the Illinois Supreme Court. An astute reader of my blog suggested that I might want to revisit the relocation blog in light of that reversal. So here we are.
In Fatkin, the trial court made a ruling that the Appellate court reversed. Then the Illinois Supreme Court reversed the Appellate court. In essence, with the Supreme Court’s ruling, the trial court’s ruling was upheld allowing the father to move from Illinois to Virginia with the couple’s children. Fatkin Relocation Case History For those unaware of the Fatkin decision, it was a relocation case. The father, in that case, had the primary time with the parties’ two children and he wanted to move out of state. The mother objected and a trial was conducted about whether it was in the children’s best interests to move out of state. The trial court agreed with the father and allowed the kids to move. On appeal, however, the Appellate Court disagreed and ordered that the children remain in the State of Illinois. The father appealed that ruling and the Illinois Supreme Court reversed the Appellate Court and the trial judge’s ruling allowing the children to move was essentially approved. The kids moved with their father out of state. It is interesting to note, however, that the Illinois Supreme Court did not reverse the Appellate Court because it felt that the trial court had ruled correctly. The Illinois Supreme Court based its reversal on the Appellate Court’s review of the evidence and/or its findings, and ruled that the Appellate Court had essentially overstepped its boundaries. What the Supreme Court took issue with was the Appellate Court’s refusal or unwillingness to apply the right standard to the appellate review. The Appellate Court in Fatkin was charged (in relocation cases) with essentially applying the wrong standard of review. Understanding the Responsibilities of the Trial Court Each court has its own responsibilities. The trial court has to follow the precedent of the courts above it, contrary to the recent opinion of sitting Judge Else in DuPage. The trial court is required to do that, and when it doesn’t, the reviewing courts have some harsh words for the trial court judge and will reverse the ruling. The trial court judge is also charged with reviewing the evidence before it and assessing the credibility of the witnesses that take the stand in trials before the court. It is improper for the Appellate court to overstep its bounds and retry the case, or to step into the trial court’s shoes. The trial court is the best indicator of truthfulness in witnesses since they physically see the witnesses. The Appellate Court and any higher court rely strictly on the evidence, court pleadings, orders, and the record. They never see the witnesses. The trial court’s job is to assess the truthfulness of the witnesses for that reason. The Illinois Supreme Court found that the Appellate Court had essentially tried to be the trial judge in the Fatkin case and it was improper. Appellate Court’s Role in a Relocation or Removal Case The Illinois Supreme Court stated that the Appellate court wasn’t supposed to “re-try the case” and decide the case as if it were the trial court. That was the trial court’s job. The Appellate court in a removal case had to decide if any reasonable person would have ruled as the trial court in Fatkin did. The legal standard is “against the manifest weight of the evidence.” The Appellate court is not supposed to reverse the trial court unless the trial court’s ruling was against the manifest weight of the evidence. Fatkin Case Background In Fatkin, the Illinois Supreme Court found that the Appellate court made no attempt to apply the applicable standard of review. The Appellate court reweighed the evidence and came out with a different result than the trial court did. But that is not what the Appellate Court is supposed to do. The Appellate Court is not supposed to be another trial court, they are only to determine if the trial court reached a decision that was against the manifest weight of the evidence, and that isn’t what they did. So the Illinois Supreme Court reversed the Appellate court. People now believe that the trial court’s ruling was correct (based on the fact that the Supreme Court agreed with it). That the analysis of the Appellate Court was wrong. But the Illinois Supreme Court isn’t stating that. The Illinois Supreme Court isn’t saying that the conclusion that the Appellate Court found was necessarily wrong, just that that wasn’t their role. Fatkin doesn’t really help us now since it is just the opinion of one trial judge. I personally didn’t like the Fatkin case and I was one of the attorneys applauding its reversal. Now I’m stuck with it. But it is important to note (and to argue) in other removal cases, that the Illinois Supreme Court never weighed in and said that the trial court properly ruled in its case. It reversed for other reasons. In Fatkin, the father had the majority of the parenting time with the kids and the mother was an involved mother. She paid support and she spent a lot of time with her kids. The father, a licensed dental hygienist, wanted to move out of state to go live by his parents. My reading of the case showed that the father engaged in behavior that alienated the oldest child from the mother. Everything I counsel my clients on to prevent removal (relocation) was being exhibited in the father’s behavior in this case. So when the Appellate Court reversed the trial court’s decision to let the father go, I was there patting myself on the back since I counsel my clients not to act like the father in Fatkin and now had proof that my way was correct. “See, this is exactly the wrong behavior to engage in if you want to remove your children from the state.” I counsel my clients — don’t alienate your children from the non-custodial parent. Preventing the Relocation of Your Children If you want to prevent the relocation of your children do:
And when Fatkin was reversed, I had a case in hand to make my clients act right (if they were having trouble doing that) and a case with more or less of a road map to ensure getting removal, or a road map used in the alternative to prevent it. Now we are looking at Fatkin as an Illinois Supreme court case condoning this father’s bad behavior. Which I hate. Takeaways from the Fatkin’s Petition to Relocate Of course, Fatkin can still be used in the manner I use it. I can sill point to Fatkin to show parents how acting badly can result in a denial of their petition to relocate. Of course, it is just my opinion that the father in Fatkin didn’t act right. But when the parties’ teenage son didn’t approve of his mother’s lifestyle because she’d started dating, and then didn’t want to see her, I smelled a rat and that rat was the father saying things about his ex-wife that his son heard. And when the father allows his son to come home after school and reject the mother’s parenting time after school, I smell a rat. I felt sorry for the mother in the Fatkin case. She did everything right and still, her children will be moved across state lines where she’ll no longer get to mother them like a mother should be able to. I don’t like it when people act right and still lose. I don’t like the Illinois Supreme Court’s ruling in this case and I wish the Appellate Court wasn’t reversed. But it is a wake-up call too. Each court has a role and it is important for the courts to maintain that role. I suspect that the Appellate Court smelled a rat just like I did and tried to right the wrong done to the mother in Fatkin. It just wasn’t their role to do that. Relocation cases are difficult. The judges have a lot of factors to weigh, and the combination of the multiple factors are never the same in each case. If you’re facing the complexities of child relocation and custody laws require sound legal input and advice. Contact Anderson & Boback today if you want to learn more about a petition for relocation, child relocation law or the Fatkin case. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-relocation/illinois-fatkin-relocation-case/ A Prenup Agreement Can Be Risky Business
Just because one person has substantial assets going into the marriage doesn’t mean they will maintain those assets throughout the marriage. Additionally, someone may have a high earning capability going into the marriage, and then experience something which limits their ability to work, such as a disability, or taking time off to raise children. No one knows what position the parties will be in if and when they divorce, so generally speaking, a prenup agreement is a risky business to get into. Provisions Regarding Children Are Unenforceable One thing that prenup agreements cannot address at all is child support or child custody. So, those issues are never included in a premarital agreement of this type as those provisions would not be enforceable. One cannot possibly know what would be in the best interests of the minor children when they have not even been born yet. Protecting Substantial Pre-marriage Assets Of course, someone who has substantial assets going into the marriage can safely enter into an agreement that those assets will remain that person’s assets if the parties divorce. That is an easy way to utilize a prenuptial agreement and it is pretty straightforward. However, allocating or waiving spousal support, deciding on a percentage division of the marital estate and waiving contribution to attorney’s fees are difficult to predict. It is hard to guess what will be equitable at some unknown time in the future. Provisions Regarding Validity of the Agreement Further, most prenuptial agreements have a provision which indicates that in the event either party tries to contest the validity of the prenuptial agreement, and they are unsuccessful, then they will have to pay the other party’s attorney’s fees. That could be a substantial undertaking depending on how long and how contested the argument regarding validity is. So, this discourages the litigants from trying to undo the prenuptial agreement, which creates the attorney’s fees the parties set out to avoid by entering into the prenuptial agreement, to begin with. When Contesting a Prenuptial Agreement is Warranted However, there are certain red flags which could mean a contest of a prenuptial agreement is warranted. First of all, if a maintenance waiver would cause someone substantial financial hardship, then that could be a basis for a Court to award them spousal support, despite a waiver of maintenance in the prenuptial agreement. Other red flags include executing the document too close to the date of the marriage (which could be sued to argue coercion or duress in signing the document), the parties not having legal counsel in the review and execution of the prenuptial agreement; the parties not making a full and accurate disclosure of all assets when signing the prenuptial agreement, and many more. Should You Have a Prenup? Overall, prenuptial agreements certainly serve a purpose when parties have their own nonmarital substantial assets going into a marriage. They are particularly useful when parties are on a second or third marriage and want to ensure children from their prior marriage receive all of their property upon death, etc (though estate planning can also effectuate this). However, prenuptial agreements can also cause a lot of harm when people gamble with what their financial ability/position will be at the unknown time if and when a divorce occurs. This is when it can become problematic. So, be careful before entering into a prenuptial agreement and do it for the right reasons. At Anderson & Boback, we’re passionate about solving complex family law issues for our clients and their families throughout the Chicago area. Contact us today for a confidential consultation when you have questions or concerns about prenuptial agreements including what to do if you have a prenup agreement and want to divorce. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/prenuptial-agreements/divorce-hate-my-prenup-agreement/ Anderson & Boback Partner Jessica C. Marshall has been selected as an inaugural member of the Illinois State Bar Association (ISBA) Leadership Academy. With just 20 candidates selected across the state of Illinois, this is an exciting honor for Jessica.
The Leadership Academy is a landmark program is designed to train the next generation of professionals to become effective leaders in the Illinois legal community and develop future leaders of the ISBA. Participants were sought throughout the state in both diverse practice areas and backgrounds with 3 to 10 years of practice experience. Jessica will participate in six intense training sessions that will be held throughout the state, concluding with a graduation ceremony at the 2020 ISBA Annual Meeting in St. Louis. Upon graduation, Jessica will be appointed to an ISBA section council or committee of her choice. We’re thrilled for Jessica and know her selection to the 2020 Leadership Academy is well-deserved. On behalf of the entire Anderson & Boback team, we offer our congratulations to Jessica! Jessica is a Partner at Anderson & Boback where she focuses her practice on divorce and family law. From contested divorce and child custody matters to military divorce, Jessica is a passionate advocate with an unwavering commitment to her clients. If you need a compassionate and personable attorney dedicated to solving family law problems, contact Jessica Marshall. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/a-b-news/jessica-marshall-selected-for-isba-leadership-academy/ Recently, I wrote about the father in the Salvatore v. Salvatore case who attempted to reduce child support and failed. Now the Appellate court has decided another case, reversing the trial court that allowed a modification of child support.
Father’s Seeks to Reduce Child Support In this recent case, the father, Michael J. Hickey, petitioned for a reduction of child support. Michael claimed that an involuntary termination with his employer led to an early retirement. At age 64, he no longer earned $180,000 and wanted to modify his support obligation. The trial court granted his request and reduced the amount he had to pay to $1,700.00 from $3,043.00. The Court calculated guideline support, but then allowed a slight deviation upward due to the amount of money and assets he had. Michael’s ex, Cherie, argued that Michael’s net income was much higher than the court determined and that his retirement was not a substantial change in circumstances. Cherie complained that the court had not added in Michael’s deferred compensation to his income, and wouldn’t consider the $400,000.00 withdrawal from his retirement account as income. Change in Father’s Total Income The Appellate Court reviewed Michael’s total income and determined that there was not a substantial change in his overall financial picture. Michael had $2.585 million in brokerage account and three homes that included a vacation residence. It was demonstrated that he had a travel budget of $60,000 a year, so although his income changed, his overall financial picture did not. In his 2017 financial affidavit, Michael said that his 2016 income had been $129,000. He did not include the fact that he’d withdrawn $400,000 from a retirement account. Michael stated that his gross income was $8,677.00 per month. The gross monthly income included a $2,641 pension benefit, $5,416 in investment income, $600 in rental income, and $20 in other dividends. He did not list the $83,000 in deferred compensation that he had been awarded as part of his severance package. Michael has numerous assets including three homes and two cars. His investment portfolio was valued at $2.585 million. In September 2017, the trial court issued its decision. The court granted Michael’s petition to modify, reducing Michael’s support amount from $3,043 to $1,700 per month. The Court relieved Michael of any responsibility to pay for ordinary medical expenses, although the parties would split extraordinary medical expenses. Michael’s contribution to extracurricular activities was capped at $3,500 per year. Michael’s total yearly contribution would be $23,900.00 unless something medically occurred that wasn’t covered by insurance. The trial court ruled that a reduction was warranted for Michael because of his change in employment and his reduced income. The trial court did not include any of the $400,000.00 withdrawal when calculating the new support amount. The court said that an assessment of Michael’s assets cannot be considered income for child support purposes. The court appeared to throw Cherie a small bone however when it deviated from guidelines and added an extra $400.00 a month. The court rejected Cherie’s position that Michael should draw upon his $2.5 million in assets, and the interest earned from it, in order to keep the child support at $3,043 per month. The court stated: “Assuming [Michael’s] income is now only $78,000 per year; Michael would be required to draw down his assets in the amount of $193,000 per year in order to equal the $271,000 annual income upon which child support was based. Assuming he lives for another 20 years, until age 84, this would require a sum of $3,860,000. Michael does not have this sum available. In addition, it would assume that Michael wants to leave $0 in his estate for his heirs. To require, or to impute to someone the requirement that they regularly draw on their assets until liquidated, when they are not actually currently engaged in doing that, is speculative and not supported by the facts.” Cherie argued on appeal that Michael failed to establish that a substantial change in circumstances warranted a reduction of the $3,043 support amount, which had been based on a net income of $180,000 per year. She asked the Appellate Court to reinstate the 2010 award. She also argued that, even if there was a substantial change in circumstances, the statutory factors support the $3,043 support amount. She asserts that Michael’s net income was much higher than he claimed and that under the circumstances, particularly Michael’s wealth and spending patterns, it would warrant an upward deviation. Substantial Change in Circumstances Required to Modify or Reduce Child Support A child support judgment generally can be modified only upon a showing of a substantial change in circumstances. “The burden of showing a substantial change in circumstances sufficient to justify a modification of a child support award is on the party seeking the relief.” In re Marriage of Kern, 245 Ill. App. 3d 575, 578 (1993). Once the court determines that modification is appropriate, the court should consider the statutory guidelines when determining the new child support amount. In re Marriage of Stockton, 169 Ill. App. 3d 318, 325 (1988). The court should consider:
The Debate Over What is Considered “Income” There is a lot of debate in court about what actually constitutes “income.” If you only receive the lump sum once (as in lottery winnings) is that considered income? What about the house you were awarded during the marriage? If you sell that, will that be considered income? Section 505(a)(3) broadly defines net income as “the total of all income from all sources, except” certain specified deductions, such as federal and state income taxes, social security payments, mandatory retirement contributions, union dues, individual and dependent insurance premiums, prior obligations of support or maintenance, and expenditures for the repayment of certain debts. 750 ILCS 5/505(a)(3) (West 2016). Definitions of income accepted by our supreme court include something that comes in as an increment or addition, a gain or recurrent benefit that is usually measured in money, and/or the value of goods and services received by an individual in a given period of time. Even if the IRS allows certain things to either be categorized as income or expenses for their purposes related to income, it doesn’t necessarily mean that the court adopts those same parameters for child support purposes. A nonrecurring, one-time income source must be included in the court’s computation of net income, however. If the evidence shows that the parent is unlikely to continue receiving payment from that source, then the court may consider that fact when determining whether and to what extent a deviation from the guideline amount is appropriate. The court in its opinion included the following analysis to help decide this case: “Consistent with this understanding of income, courts have determined the following to constitute income under section 505(a)(3): (1) deferred compensation (Posey v. Tate, 275 Ill. App. 3d 822, 826 (1995)); (2) pension payments (People ex rel. Myers v. Kidd, 308 Ill. App. 3d 593, 596 (1999)); (3) a military allowance (In re Marriage of McGowan, 265 Ill. App. 3d 976, 978 (1994)); (4) a gift from parents (Rogers, 213 Ill. 2d at 137); (5) a lump sum worker’s compensation award (In re Marriage of Dodds, 222 Ill. App. 3d 99, 103 (1991)); cf. Villanueva v. O’Gara, 282 Ill. App. 3d 147, 151 (1996) (the entire amount of a personal injury settlement should not have been included as income, where the settlement largely made the parent whole and did not increase his wealth); and (6) IRA disbursements (Lindman, 356 Ill. App. 3d at 466 (Second District). But see O’Daniel, 382 Ill. App. 3d at 850 (Fourth District).).” This court ruled that deferred compensation is income for the purposes of determining child support and quoted Posey, 275 Ill. App. 3d at 826. The Appellate Court here found that the trial court erred in failing to include Michael’s $83,000 in deferred compensation when determining his 2017 income. They found Michael’s net income to be $128,000 at a minimum. The court then looked at whether there had been a substantial change in circumstances. A Substantial Change in Circumstances A substantial change in circumstances typically means that the child’s needs, the obligor parent’s ability to pay, or both have changed since the entry of the most recent support order. In re Marriage of Pylawka, 277 Ill. App. 3d 728, 731 (1996). Michael pled in his petition that there was a substantial change in circumstances regarding his child’s needs. The trial court agreed that the child’s needs presumably increased since 2010 because their son was a small child when the initial order of support had been set. In Michael’s petition to reduce child support, he pled that he had a reduced ability to pay support based on a change in his employment status. Michael had the burden to show that the change in his employment status resulted in an economic reversal sufficient to constitute a substantial change in circumstances, warranting a reduction of support, even in the face of his son’s increased needs. The reviewing court found that Michael had the means to continue to meet his $3,043 monthly support obligation without risking his financial security in retirement, and that is where the trial court erred. The Appellate court said that the trial court based its substantial-change determination entirely on Michael’s change in employment status and reduced income. While these are important factors, they are not the only factors. The court erred by failing to consider all of the factors relevant to a substantial-change analysis. Substantial Change Analysis In a substantial-change analysis, income is not the only measure of a parent’s continued ability to pay child support. In re Marriage of Deike, 381 Ill. App. 3d 620, 627–28 (2008). Rather, income becomes the controlling factor after there has been a substantial-change determination and as the court sets the new guideline amount (and, even then, the court must look to the other factors to determine whether a deviation from the guideline amount is warranted). Stockton, 169 Ill. App. 3d at 325. To determine whether there has been a substantial change in circumstances, the court should take a holistic view of the parent’s financial position and consider all financial resources, including assets and even the financial status of a new spouse. Deike, 381 Ill. App. 3d at 627–28. The court should consider all money and property that the parent can access, even if it means selling the property. Illinois courts have routinely held, in the context of maintenance, that reduced income in retirement does not automatically constitute a substantial change in circumstances. Rather, reduced income in retirement is but one of several factors to consider in determining whether there has been a substantial change in circumstances. The Appellate court here compared this case with Schrimpf, 293 Ill. App. 3d at 253. In Schrimpf, the court held that there had not been a substantial change in circumstances, despite the obligor’s reduced income in retirement. The husband’s working income had been $67,000, and his retirement income, composed of social security and pension payments, was $36,000. The court reasoned that, despite his reduced income, the husband “planned well” for retirement and could access additional funds from his pension and insurance policy to satisfy his $750 monthly maintenance obligation. The terms of the husband’s pension allowed him to increase his monthly distribution at any time. Requiring the husband to reach into retirement assets to fulfill his existing obligation was not tantamount to an increase in the maintenance award because the husband was comparatively well off, with access to $600,000 in cash and ownership of a vacation home with his second wife. A substantial change in circumstances within the context of a parent’s retirement includes a substantial change in the child’s needs or the parent’s ability to pay. The courts have found that there is no obligation more important than supporting one’s minor child. (See, e.g., McLauchlan, 2012 IL App (1st) 102114.) Appellate Court’s View of Retirement Accounts The Appellate court concentrated on the fact that Michael’s lifestyle has not decreased. In retirement, Michael has continued to live as though his net income is at least $180,000. In fact, in 2016, he spent substantially more than that amount. Rather, Michael’s spending patterns show the power of his capital and demonstrate that there has been no change in his financial circumstances to warrant a reduction in his support. Without question, Michael’s retirement lifestyle demonstrates his continued ability to meet his existing obligation. Contrary to the trial court’s assessment, the Appellate court stated that well-funded retirement accounts are meant to finance one’s life, and existing obligations are part of one’s life. Traditional earned income is expected to be lower in retirement, but this should not result in a presumption that there has been a substantial change in economic fortune resulting in a decreased ability to pay child support. The petitioner must prove, based on his unique circumstances, that his financial position in retirement renders him less able to pay the full child support amount. Michael failed to do so. Get Trusted Advice from an Experienced Child Support Attorney Modifying child support is not as easy as many think. There are factors that need to be looked at carefully and all potential outcomes should be considered. Contact Anderson & Boback today to speak with our experienced child support attorneys and determine if you seek to increase or reduce child support. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-support-modification/attempt-reduce-child-support-fails/ |
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