Today more Chicago couples are turning to collaborative divorce. For most of us, the word “divorce” brings to mind lengthy court battles, tens of thousands of dollars spent on attorneys’ fees, heartbreak, anger, and endless custody disputes. While it is true many of those cases exist, there are couples who would like to take a holistic and collaborative approach to the dissolution of their marriage. For those couples, Illinois Supreme Court Rule 294 should make collaborative divorce is a more effective option While collaborative divorce has been used for a while in Illinois, the process was not enacted into law until August of 2017 and the statute did not become effective until January 1, 2018. The statute is 750 ILCS 90/1. Pursuant to the new statute, each party must sign an agreement meeting the requirements of the statute that sets out the parameters and each parties’ intentions. The Collaborative Divorce Process - How It Works In a collaborative divorce, both parties are represented by an attorney who has had training as a collaborative attorney. Typically, there will also be an accountant, psychologist, and possibly even a child specialist if children are involved. These individuals make up the collaborative divorce team. Through the collaborative divorce process, couples meet with their attorneys and their team to discuss their goals and what they would like to achieve. The couple works together to create a settlement and work through any issues to resolve the marriage in everyone’s best interest. Similarities to Divorce Mediation The process is similar to mediation. However, there is no third party mediator, just the collaborative team and the parties. The Court cannot order parties to do a collaborative divorce. The parties can agree to keep communications in the collaborative process confidential if they wish. The Court does not need to approve the agreement; however, will need to if the parties wish for their agreement to be enforceable. Rule 294 and Disqualification of Lawyers Serving in Collaborative Process On June 8, 2018, the Supreme Court of Illinois adopted a new Rule regarding attorneys representing clients in the collaborative divorce process. Illinois Supreme Court Rule 294 disqualifies attorneys, and their law firms from representing any parties in litigation that they previously represented in the collaborative divorce process. Supporting the Collaborative Divorce Process This rule helps to give weight to the collaborative divorce process. One of the main attractions to collaborative divorce is that it is generally less expensive than traditional divorce where litigation is involved. While you are still paying attorneys and have a collaborative team, the collaborative law approach does away with the extra expenses related to drafting motions, extensive research, and time spent in Court. Instead, the time is spent by the parties negotiating and working towards a joint agreement. Now that Supreme Court Rule 294 is in place, lawyers have an extra incentive to ensure their clients are working things out and abiding by their collaborative law agreement. Incentive to Make Your Collaborative Divorce a Success Pursuant to this new rule, neither the attorney, nor their law firm may represent a client who they previously represented in the collaborative divorce process. If the clients chose to litigate, they must find a new attorney and a new law firm. This new rule serves as an incentive to the attorney and as an incentive to the parties participating as well not to withdraw form the collaborative process. Most individuals do not want to switch attorneys mid-way through a dissolution of marriage. Most attorneys want to keep their clients. This new rule makes it more difficult to withdraw from the collaborative process; thereby, giving more importance to the collaborative process itself. While collaborative divorce is relatively new, this new rule should strengthen the collaborative process and make it more enticing to individuals who are serious about avoiding a long drawn out litigation and resolve the matter between themselves instead of having the Court determine their fate. If you are facing divorce or have questions about the process of divorce in Illinois, we can help. Contact Anderson & Boback to schedule confidential consultation and learn more about divorce and if the collaborative divorce process is right for your situation. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/collaborative-divorce/collaborative-divorce-illinois-rule-294/
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Big changes are coming to the Illinois spousal maintenance law (spousal support) specifically Section 504 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA). This section deals with maintenance, which was formally referred to as “spousal support” or “alimony.” The changes are set to take effect on January 1, 2019. This is big news for anyone currently involved in divorce proceedings and parties who are contemplating filing for dissolution in the near future. If maintenance is a factor in your divorce you will want to speak to an attorney regarding the below-mentioned changes, as there will be a difference between Judgments for Dissolution of Marriage entered before and after January 1, 2019. First, is Spousal Maintenance Appropriate? Before discussing the details of maintenance (duration and amount) the court must still make a finding that maintenance is appropriate given the specific facts of the case. This is nothing new. There is a threshold question that must be answered prior to figuring out any details of a maintenance award- is an award for maintenance appropriate? If the answer is no, then the court must bar the party seeking maintenance from an award of maintenance. This is a yes or no. You are either entitled to maintenance or you are not. The new statute even states that if an award for maintenance is not appropriate, the court must bar the request, regardless of the length of the marriage. Length of marriage is a big factor in any divorce but the new change to this statute reiterates that this is only one of many relevant factors that must be considered when deciding if an award is appropriate in the first place. Spousal Maintenance Duration and Amount If the court determines that an award for maintenance is appropriate after considering all relevant factors, then you move forward to figure out duration and amount. To do so you must determine if guideline maintenance duration and amounts are appropriate. Guideline Maintenance vs. Non-Guideline Maintenance Guideline maintenance is awarded unless the court makes a finding that doing so would be inappropriate. Generally speaking, guideline maintenance is awarded if the parties’ combined gross annual income is less than $500,000.00 and if the payor of the maintenance is not obligated to pay maintenance or child support in any other court case from a past relationship. As of January 1, 2019, maintenance will be calculated by taking 33 1/3 % of the payor’s NET annual income minus 25% of the payee’s NET annual income. This is a major change due to recent changes in the Internal Revenue Service (IRS) Code. Previously, guideline maintenance was calculated by taking 30% of the payor’s GROSS annual income minus 20% of the payee’s GROSS annual income. The court will order maintenance for a duration that corresponds with the percentages that can be found in Section 504 of the IMDMA. Length of marriage is from date of marriage to date that a petition for dissolution of marriage is filed. Here's how it breaks down based on duration: Marriages - Duration Percentages for Spousal Maintenance
If the court deviates from the guidelines the court must state why. The court shall state whether the maintenance is fixed-term, indefinite, reviewable, or reserved by the court. If fixed-term maintenance is granted then the maintenance terminates at the end of the period during which maintenance is to be paid. Maintenance is then barred after the said period ends. Indefinite maintenance does not have an end date and it continues until modification or later termination. If reviewable maintenance is granted, the court must state the period of the specific term of maintenance and state that it is reviewable. Upon review, the court will determine if the maintenance should continue for further review, extend for a fixed non-modifiable term, extend indefinitely, or permanently terminate. This maintenance could also be modified or terminated pursuant to Section 510 depending on the facts of the case. Maintenance Safeguards The updated statue still makes sure that the payee is not receiving more than 40% of the parties’ combined net annual income, after adding the maintenance award to their individual annual income. Additional language has been added to the statute to make sure that, in the event, that a payor’s guideline- based maintenance and child support obligation exceed 50% of their net income, the court may then determine non-guideline maintenance and/or non-guideline child support. Modifications to Maintenance Orders Entered Prior to January 1, 2019 If you have an order for maintenance that was entered before January 1, 2019, and you file a petition to modify after the new law takes effect, then you should be able to continue including the maintenance payments in the payee’s gross income from federal income tax purposes. But, of course, this is dependent on the language in your marital settlement agreement or judgment for dissolution of marriage. If you no longer want the payments included in the payee’s gross income for federal tax purposes then you must expressly state so in the spousal maintenance modification order. Biggest Takeaway from the Illinois 2019 Maintenance Law The calculation method for maintenance beginning January 1, 2019, has been changed due to recent changes in the IRS code. The maintenance payor will not be able to deduct the maintenance payments from their gross income for federal income tax purposes if their Judgment for Dissolution of Marriage (including an award for maintenance) is entered on or after this important date. Previously, the party receiving maintenance (payee) would include the maintenance payment in their gross income for federal income tax purposes, thereby reducing the payor gross income for tax purposes. If you have questions or concerns about spousal maintenance or another divorce-related issue contact Nichol Broshous or email Anderson & Boback to schedule your confidential consultation with our Chicago divorce attorneys to learn more about spousal maintenance law. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/spousal-support/new-illinois-spousal-maintenance-law-2019/ II. THE NEW BLENDED MILITARY RETIREMENT SYSTEM (BMRS) The following is the second of a 4 part series on the changes you need to be aware of in order to stay up to date on the laws affecting Military Divorce, as presented by Janice Boback at the National Business Institute Continuing Legal Education for Professionals in July 2018. The Modernized Retirement System for Service Members Entering in 2018 The Modernized Retirement System applies to any new Service Members coming into the military in the year 2018. Already Retired: No change New Service Members: The New Law Others: Choice (old or new) The Fiscal Year 2016 National Defense Authorization Act created a new military retirement system that blends the traditional retirement pension with the Service Members’ Thrift Savings Plan account (a defined contribution account). The new Uniformed Services Blended Retirement System (BRS) went into effect on January 1, 2018. The decision to opt-in is irrevocable and Service members opting in will begin receiving matching government contributions effective the first pay period that begins on after the day the member opts into the BRS. Service members do not need their spouse to agree with the decision to opt in. Service members who retire after at least 20 years of military service (20 qualifying years for the National Guard and Reserve), their retirement remains predominantly a defined benefit in which the service member will get monthly retired pay. Under BRMS, the service member’s monthly retired pay will be calculated with a 2.0 percent multiplier (in lieu of the 2.5 percent under the legacy High-3 system), times the average of the service member’s highest 36 months of basic pay. Grandfathered Clause and Opt-In Election For those military members who were serving as of December 31, 2017, they are “grandfathered” in under the traditional retirement pension system and will not be automatically switched over to the Blended Retirement System. However, military members with fewer than 12 years since their date of entry into the service — PEBD- (Pay Entry Base Date) and reservist who have accrued fewer than 4,320 retirement points as of December 31, 2017 will have the option to opt into the Blended Retirement System. This opt-in election period for the Blended Retirement System is now open and runs from January 1, 2018 through December 2018, 2018. Blended Retirement System Differences The primary difference between the Blended Retirement System and the traditional military retirement system is that the BRS adjusts the years of service multiplier from 2.5 percent to 2.0 percent for calculating monthly retired pay. Also, the BRS includes automatic government contributions of 1 percent of basic pay and government matching contributions of up to an additional 4 percent of basic pay to a service member’s Thrift Savings Plan (TSP) account. In addition, there is a continuation pay provision, which is a direct cash payout (like a bonus), in return for additional obligated service. Changes to the Uniform Services’ retirement system went into effect January 1, 2018. Thrift Savings Plan BRS includes a Thrift Savings Plan (TSP) and that portion is a defined contribution retirement savings and investment plan that offers the same type of savings and tax benefits that many private companies offer their employees as a 401(k). The government provides automatic and matching contributions to the military members TSP accounts. Automatic 1 percent and matching contributions up to an additional 4 percent. Service members must have at least two years of service in order to be vested in the government’s automatic 1 percent contributions and associated earnings. The government maximum contribution is 5% as long as you are contributing 5% You contribute 0% 1% auto contribution 0% Match Total = 1% You contribute 1% 1% auto contribution 1% Match Total = 3% You contribute 2% 1% auto contribution 2% Match Total = 5% You contribute 3% 1% auto contribution 3% Match Total = 7% You contribute 4% 1% auto contribution 3.5% Match Total= 8.5% You contribute 5% 1% auto contribution 4% Match Total = 10% Retired Pay After At Least 20 Years On Active Duty BRS does not change any of the existing rules about when the military retired pay defined benefit (pension) begins. If you served at least 20 years on active duty, retired pay generally begins the first day of the first month following your retirement. If you served at least 20 qualifying years of service in the National Guard or Reserve, eligibility to receive retired pay generally begins when you reach age 60. This age of eligibility for retired pay may be reduced for members of the National Guard and Reserve who have certain qualifying active duty service performed after 2008. Lump Sum Provision under the Blended Retirement System Lump sum refers to a portion of the monthly retired pay a service member receives upfront after serving 20 or more years (or 20 qualifying years in the National Guard and Reserve) and retiring with a regular or non-regular (reserve) retirement. Therefore, the lump sum is only available for those that earn a regular or non-regular retirement. Members who retire with a disability retirement are not eligible to elect a lump sum. The lump sum provision of BRS gives service members choices at retirement. A service member may choose to receive either 25 percent or 50 percent of the discounted present value of a portion of their future retired pay, in exchange for reduced monthly retired pay. Monthly retired pay returns to the full amount when the service member reaches full Social Security retirement age, which for most is age 67. No such lump sum option exists under the legacy, High-3 military retirement system. it is not a requirement the service member’s spouse concurs with selection of the lump sum. Disability Compensation and the Lump-Sum Option For most members retiring under BRS, there will be no impact to their eligibility to receive VA disability compensation, Combat-Related Special Compensation (CRSC), or Concurrent Retirement and Disability Pay (CRDP). However, if a service member covered by BRS elects the lump-sum option, there may be an impact to his or her ability to receive some or all of his or her VA disability compensation due to the law requiring an offset of the retired pay that has already been received via the lump sum. Those with CRSC-qualifying disabilities will still be able to receive CRSC even if they elect a lump sum. Those qualified for CRDP will be able to receive VA disability compensation and military retired pay without offset. Blended Retirement System and DivorceA service member’s pension under the BRS is similarly subject to a divorce decree as it is under the regular retirement plan. This is the second installment of Janice Boback’s 4 part Military Divorce Series covering the latest changes affecting Military Divorce. If you have questions about military divorce or the unique aspects of divorce when it involves a member of the armed services, we can help. Contact us today and let our military divorce expertise guide you through this complicated time. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/military-divorce/new-blended-military-retirement-system/ Can a Court Order Me to Pay Additional Child-Related Expenses on Top of My Child Support Obligation?9/18/2018 One of the common questions we hear from clients is: “Can I be ordered to pay for child-related expenses in addition to my child support obligation? The simple answer is: It depends. Understanding the purpose of child support and what it is should be used for is the key. Of course, most people are familiar with the term “child support”. However, not everyone truly understands the meaning of legal child support and its purpose. What is the Purpose of Child Support? When you think of child support think of the child’s basic necessities. The intent of child support is to cover the cost and expenses associated with the needs of your child. So what does a child “need”? A child needs to eat, needs a place to sleep, needs to have clothes and shoes, etc. Then remember that both parents have a duty to financially support their child. In Illinois, parents are legally responsible for their child’s reasonable and necessary physical, mental, and emotional health needs. This even includes basic ordinary out-of-pocket medical expenses. Many times, people are upset because they believe that their child support payments are not being used to support the child. But you have to remember this - if the parent receiving the child support is meeting the child’s needs, then there isn’t an issue. As the parent paying the child support, you have little control, if any, regarding the spending habits of the other parent as long as the child’s basic needs are being met. What About Additional Expenses for a Child Beyond the Basic Necessities? Now we all know that raising children and their needs require more than just covering basic necessities. There are many possible additional expenses for a child on top of the basic necessity expenses. “Child Care” Expenses Think about a young child who is not old enough to be in school yet. If both parents are working, who is watching the child? It is very helpful to have a friend or family member who is available to watch the child while you are at work, but not everyone has that option. The vast majority of parents must place their children in the care of others like babysitters and daycare workers. Daycare can be expensive. What do you do if you cannot afford to pay these additional expenses on your own? First, understand what this term encompasses and how the court views these expenses. What Qualifies as “Child Care” Expenses? The term “child care expenses” includes the following:
A parent may ask the court to enter an order requiring the other parent to contribute to child care expenses, on top of the basic child support obligation. The court, in its discretion, can order either or both parents owing a duty of support to contribute to reasonable child care expenses. ”Reasonable” Child Care Expenses The child care expenses must be reasonable. Reasonable child care expenses are those expenses that are reasonably necessary to enable a parent to: be employed, attend educational or vocational training programs to improve their employment, or search for employment. When the court decides to enter an order requiring one or both parents to contribute to child care expenses, the court will prorate the reasonable expenses in proportion to each parent’s percentage share of their combined net income. Orders for child care expenses, as well as child support, can be modified upon a showing of a substantial change in circumstances. Contribution to Extracurricular Activities Children of all ages participate in what we refer to as “extra-curricular” activities. A young child may be in tumbling. An older child may be on a traveling baseball team. Maybe a child takes piano lessons. I am sure you can think of an example that fits your life. Educational Expenses and Child Support Once a child starts school they will likely have expenses related to their education. This is when we think of registration fees, books fees, lunch fees, and the list goes on and on. The court can order a parent to contribute towards the reasonable school and extracurricular activity expenses incurred for a child if those expenses are intended to enhance the educational, athletic, social, or cultural development of the child. Contribution to Unreimbursed Medical Expenses And of course, unfortunately, there is always the possibility of a child having uncovered medical expenses. Not everyone’s insurance covers everything- who pays for that? The court can order a parent to pay towards unreimbursed medical, dental, orthodontic, or vision expenses and any prescription medication for the child not covered under the child's health insurance. The bottom line is that the court can entertain a request for the other parent to contribute to these types of expenses. To start, the court will look at the income of both parents. In Illinois, We see a lot of orders with 50/50 contribution to the above-mentioned expenses, however, we also see many orders splitting expenses 70/30, 60/40, 55/45, etc. There are even cases where a parent is ordered to be responsible for 100% of the expenses. Child Support Orders - Every Case is Different If you’re wondering whether you or your ex can be ordered to contribute to additional expenses for your child, whether they be expenses for child care, extracurricular activities or education-related activities, it depends upon your child’s unique situation, Every case has a different set of facts, so just because you hear that your friend’s cousin’s case ended a certain way does not mean that you will have the same outcome, even if you believe you have very similar facts. In the end, the court does what they believe is in the best interest of the child. If you have questions about child support or another family law issue contact Nichol Broshous or email Anderson & Boback to schedule a confidential consultation to learn more about payment of child-related expenses and the child support obligation. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-support/child-support-obligation-additional-expenses/ |
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