Your High Asset Divorce can have pitfalls that are more damaging than a divorce case with little to no assets. There is just so much more to lose in high asset divorce. Many high asset clients are very savvy about their finances, which is how they fall into the “high asset” category to begin with. So, there are certain issues in which these individuals need to exercise extreme caution to ensure that they are obtaining everything that they can during their divorce proceedings. 4 Things to Avoid in Your High Asset Divorce Do not let yourself fall victim to these common mistakes: 1. Completing Discovery, even if the relationship is “amicable” Some parties to a marriage may believe they know everything about their and their partner’s finances. Other parties may know nothing about each other’s finances. Frankly, it doesn’t matter either way, because in both scenarios it is very important to complete discovery. Waiving a right to discovery means there is a possibility that there is information out there which you are not privy to, and possibly even assets out there that you are not privy to. Discovery is the process of obtaining documentation relative to all of both parties’ income, debts and assets. These are years of bank records, credit card statements, stock documentation, mortgage statements, tax returns, and pay stubs. It happens all of the time. Parties assume that they file joint taxes and have a joint bank account, so they must know everything about each other’s finances. The only way to ensure that you are protected is to go through the discovery process, regardless. During discovery, the parties each sign affidavits indicating they have made a full and fair disclosure of their property, assets, and liabilities. These affidavits can be used against the signing parties later if it turns out that this is not true. However, a party who is not diligent who later finds out about hidden assets may have a hard time arguing that they are entitled to a portion of the hidden assets when they did not do their due diligence. It is so important to always complete discovery to protect yourself. 2. Divorcing Without an Attorney We’ve heard it all before. “We agree on everything, so I don’t need a divorce attorney.” In a high asset divorce, the stakes are high. It is impossible to know what your rights are without representation, and ignorance will not be a defense later if you try to obtain something that you were entitled to, but did not know you could have or should have obtained. Hiring an attorney is crucial and necessary in these cases. 3. Hiding Your AssetsThis one is simple.
4. Not Hiring Proper Evaluators for Large or Unique Assets The house down the street may have just sold at a loss or may have had substantial issues you are not aware of which justifies the low price. Using that price as a comparable when valuing your own home may be a major mistake and you may be losing money you would have been entitled to in a buy-out situation. The best way to value your home, business or other large asset is to hire an evaluator or forensic accountant. It is necessary to ensure that you obtain the most equitable settlement possible in your high asset divorce. If you’re facing a divorce and it is common to have concerns about dividing the various kinds of property and debts accumulated during the marriage. When you need assistance and advice from knowledgeable and experienced divorce attorneys, contact Anderson & Boback and we’ll be ready to help you with all aspects of your high asset divorce. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/high-asset-divorce/mistakes-avoid-your-high-asset-divorce/
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A business valuation helps plan for unforeseen circumstances, details an exit strategy for the owners and lays out an execution plan for expansion; Business valuations use many different ways to come up with a value but what is always relevant is the business assets, liabilities, income, benefits and the current market in and outside of any particular industry sue.
Benefits of a Business ValuationAn unforeseen circumstance can devastate a company and a business valuation helps determine the price in the event a sale becomes an option. Someone who is interested in purchasing that business needs to know a value so that a sales price can be negotiated, and that value can be determined through a business valuation. As a business grows and expands through the years, an owner could use a business valuation to keep employees motivated by offering stock options or additional compensation which would be directly related to the value of the business. A valuation also gives leverage to the business owner who wants to expand and obtains a valuation to present to a potential lender. The information from a business valuation can also be used to recruit key employees or used for employees who are looking at retirement. Another very important consideration is that a business valuation can be used for value in the event of a dissolution of marriage, or when one partner is buying out the other partner or when a business owner is going to have their child come into the business or just seeking investors and needs to know the worth of a business. There are several methods to value a business and each methods considers more heavily one or more of the following factors: Value of equipment, inventory, property, liquid assets and any other property the company owns, as well as management structure, projected earnings, share price, and of course revenue. The best valuation method for you depends on why you need the valuation, the size of your business, and the specific industry. Business Valuation Methods There are three (3) main valuation methods: 1. Market Value Business Valuation Method The Market Value Business Valuation Method is one of the most subjective in measuring the value of the business. This method compares your business to similar businesses that have sold. Very similar to a market analysis of real estate. This method will only work if you have access to the necessary data on similar businesses that have sold. Often small businesses do not have public records for comparison. This leads to a value that can be used for negotiation since you will have a subjective and speculative number, but it is a good starting point if you are looking to obtain an understanding of what your business might be worth. 2. Asset-Based Business Valuation Methods The Asset-Based Business Valuation Method focuses on the total net asset value of the business less the total liabilities from the business balance sheet. This can be done on a business that is an “ongoing concern” which values of a business that will be continuing to operate. None of the assets are to be sold off and only looks at the business’s total equity which is assets less liabilities. This can also be done as a “liquidation” which is used when a business is at its’ end and the assets will be liquidated. The value is the net amount received once you sell the assets and pay the liabilities. Liquidation usually delivers a value that is lower than market value since usually there is some type of urgency involved. 3. ROI-Based Business Valuation Method ROI-Based Business Valuation methods are used when you have someone who is most interested in the “rate of return”. You could also use the following:
How do you choose which valuation method to use? What works for one business may not work well for another based on the type of business as well as the reason for the valuation and what may have worked for a business valuation in a business five years ago, may not be appropriate today. You must keep in mind the actual business, the size of your business, if you are growing and how fast, profitability and of course the reason you need a valuation. Valuation of “Personal Goodwill” Another issue we face at times in the area of divorcing couples and business valuations is the issue of “personal goodwill” which, as you see from the descriptions of the business valuation methods, is not included in a business valuation of a closely held business. Our Illinois Supreme Court addressed personal goodwill in the case of In re the Marriage of Talty in 1995 when the court was first asked to distinguish between personal goodwill and enterprise goodwill. The Supreme Court set forth a method to use to determine how to calculate the enterprise goodwill in Illinois. “To the extent goodwill inheres in the business, existing independently of the owner’s personal efforts, and will outlast his involvement with the enterprise, it should be considered an asset of the business and the marriage. In contrast, to the extent that goodwill of the business is personal to the owner, depends on his efforts, and will cease when his involvement with the business ends, it should not be considered marital property”. These are mainly service businesses Often times during a divorce we will see a business struggling and need to determine if it is real or is it a tactic in the divorce proceedings. An historical look at the business activity can often times tell a story of what is going on. A business valuator should be made aware of a divorce is part of the equation. In a divorce situation, it is best to have a valuator brought in early in the case to help with the discovery process and make sure you ask for and receive the necessary information. Good reliable data is crucial for a good valuation. The business valuators I have worked with have lists of documents that are needed for valuation which are more than simple financial statements and tax returns. You can find a business valuation expert from the American Society of Appraisers (ASA), American Institute of Certified Public Accountants (AICPA), Institute of Business Appraisers (IBA), and National Association of Certified Valuation Analysts (NACVA). If you’re facing a divorce and it is common to have concerns about dividing the various kinds of property and debts accumulated during the marriage. When you need assistance and advice from knowledgeable and experienced divorce attorneys, contact Anderson & Boback and we’ll be ready to help you with all aspects of your divorce including business valuation in divorce. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/property-division/business-valuation-divorce-planning/ Text messages in divorce court can be important evidence to bring before a Judge. When you are in the middle of a dispute with your spouse (or soon-to-be ex-spouse) you may find yourself receiving numerous texts. Perhaps many of the text messages are harassing and show that your ex-spouse is not being the great person he tries to portray to the Judge when you are in divorce court. When that happens, you need to preserve these harassing text messages so that you can use them as evidence and get them before the Judge. Preserving All Text Messages for Use in Court Text messages are being used in court to support a person’s story. If you are in this situation you should and have text messages you think would be helpful in court, be sure to keep all of your messages intact on your phone. This way you have the messages showing a complete chain of events – a complete story if you will. Do Not Omit Any Texts You do not want to give your lawyer just some of the text messages leaving out your text responses that you feel are embarrassing or show you in a negative light. If your ex-spouse also brings in the same text message story, your attorney will be surprised by this and the opposing attorney would use that against you. For example, if you arrive to pick up your child for parenting time and you send a text at 5:30 p.m. saying “I’m here, send Johnny down” and the response at 5:31 p.m. is “Johnny is not here” and you use that to show that your ex is withholding your parenting time, but fail to show your reply text at Noon that day saying “I have to work late tonight” and you had not shared that message with your attorney, you may not get the result you were hoping for from the Judge. Text Messages Must Relate to the Issues in Your Case The text messages must tell a story that relates to the issue before the Judge. For example, a text from your ex-spouse that says, “I put Junior to bed at 8 pm tonight so he can’t call you” could be used to show not only that Junior did not call you that particular night, but that text could also be used to show that he had possession of Junior that night. Proof Required Showing Texts Were From Your Ex-Spouse You also must provide proof that the messages were from your ex-spouse. You will testify that you have him/her saved in your phone with his name and/or phone number and that it appears on your phone with his/her name and/or phone number and that it was received on a specific date and time. Corroborating Date and Time of Messages It is important to remember that when you print or screenshot a text message that was received on the day your print it, it will simply say it was received “Today” which is not good enough. You will have to wait until the next day to print or screenshot the text message when the date and time appears. Using Screenshots Screenshots are often used to preserve and bring the messages into court, but Screenshots are not the best option if you have a long communication string as they are difficult to screenshot and then piece together. If you have a few messages – screenshots are fine. If you have many messages covering many conversations you should investigate utilizing an app or software program that will save the messages in order and download them onto your computer. If you are involved in a contentious court proceedings and text messaging is the mode of communication commonly used by you and your ex-spouse, these programs are worth the investment. Using Phone Bill You can also corroborate the dates and times with your phone bill which should indicate that text messages were sent/received from a certain number at a certain time. Copies of Text Messages from Cell Phone Provider Not Available I have been asked by clients if I can send a subpoena to the cell phone company to get copies of the text messages. Unfortunately, this is not possible in normal circumstances because there are billions of texts being sent every day – millions every minute that it is just not possible for this data to be saved. For this reason, along with potential federal prohibitions against divulging contents of some communications, it is often impossible to obtain copies of text messages from a cell phone provider. Most importantly, keep in mind that any text message you send could be used against you in your divorce litigation and shown to a Judge in your case. Using text messages to communicate is an everyday occurrence between spouses and soon-to-be ex-spouses, so be mindful of what you write, how you write it and to whom you are writing. 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 divorce including using text messages as divorce evidence. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce-litigation/use-text-messages-in-divorce-court/ Text messages in divorce court can be important evidence to bring before a Judge. When you are in the middle of a dispute with your spouse (or soon-to-be ex-spouse) you may find yourself receiving numerous texts. Perhaps many of the text messages are harassing and show that your ex-spouse is not being the great person he tries to portray to the Judge when you are in divorce court. When that happens, you need to preserve these harassing text messages so that you can use them as evidence and get them before the Judge.
Preserving All Text Messages for Use in Court Text messages are being used in court to support a person’s story. If you are in this situation you should and have text messages you think would be helpful in court, be sure to keep all of your messages intact on your phone. This way you have the messages showing a complete chain of events – a complete story if you will. Do Not Omit Any Texts You do not want to give your lawyer just some of the text messages leaving out your text responses that you feel are embarrassing or show you in a negative light. If your ex-spouse also brings in the same text message story, your attorney will be surprised by this and the opposing attorney would use that against you. For example, if you arrive to pick up your child for parenting time and you send a text at 5:30 p.m. saying “I’m here, send Johnny down” and the response at 5:31 p.m. is “Johnny is not here” and you use that to show that your ex is withholding your parenting time, but fail to show your reply text at Noon that day saying “I have to work late tonight” and you had not shared that message with your attorney, you may not get the result you were hoping for from the Judge. Text Messages Must Relate to the Issues in Your Case The text messages must tell a story that relates to the issue before the Judge. For example, a text from your ex-spouse that says, “I put Junior to bed at 8 pm tonight so he can’t call you” could be used to show not only that Junior did not call you that particular night, but that text could also be used to show that he had possession of Junior that night. Proof Required Showing Texts Were From Your Ex-Spouse You also must provide proof that the messages were from your ex-spouse. You will testify that you have him/her saved in your phone with his name and/or phone number and that it appears on your phone with his/her name and/or phone number and that it was received on a specific date and time. Corroborating Date and Time of Messages It is important to remember that when you print or screenshot a text message that was received on the day your print it, it will simply say it was received “Today” which is not good enough. You will have to wait until the next day to print or screenshot the text message when the date and time appears. USING SCREENSHOTS Screenshots are often used to preserve and bring the messages into court, but Screenshots are not the best option if you have a long communication string as they are difficult to screenshot and then piece together. If you have a few messages – screenshots are fine. If you have many messages covering many conversations you should investigate utilizing an app or software program that will save the messages in order and download them onto your computer. If you are involved in a contentious court proceedings and text messaging is the mode of communication commonly used by you and your ex-spouse, these programs are worth the investment. USING PHONE BILL You can also corroborate the dates and times with your phone bill which should indicate that text messages were sent/received from a certain number at a certain time. Copies of Text Messages from Cell Phone Provider Not Available I have been asked by clients if I can send a subpoena to the cell phone company to get copies of the text messages. Unfortunately, this is not possible in normal circumstances because there are billions of texts being sent every day – millions every minute that it is just not possible for this data to be saved. For this reason, along with potential federal prohibitions against divulging contents of some communications, it is often impossible to obtain copies of text messages from a cell phone provider. Most importantly, keep in mind that any text message you send could be used against you in your divorce litigation and shown to a Judge in your case. Using text messages to communicate is an everyday occurrence between spouses and soon-to-be ex-spouses, so be mindful of what you write, how you write it and to whom you are writing. 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 divorce including using text messages as divorce evidence. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce-litigation/use-text-messages-in-divorce-court/ In Illinois, child support can include paying a child’s college expenses as provided in Section 513 of the Illinois Marriage and Dissolution of Marriage Act. Effective January 1, 2016, Section 513 is the child support law that is used to require the parents to contribute to their child’s college expenses. This college education expense law provides who is to contribute (mom, dad and/or child), how much each contributes, and for how long the contribution is necessary. The obligation terminates at age 23 unless there is good cause shown why it should continue, and then the termination date is 25 regardless of circumstances.
Contribution to Child’s College Expenses Contribution to college expenses is different than child support in that each parent’s contribution to college is not determined by using guidelines or a formula. The court will consider the present and future financial resources of both parents in determining how much, if anything, they are each to contribute. Court’s will not order a parent to contribute to their child’s college if the court finds that a parent cannot afford to do so. When the court’s look at the financial resources of the parties they are not looking at just income they are looking at all financial resources and financial circumstances including if a parent has remarried the court could consider the assets of a second spouse and the expenses of a second family to determine a total picture of someone’s financial ability to pay. This is much different than child support where the income of the parents is a significant factor. Type of Post-High School Education Covered As of 2016, post-high school education covers:
Types of College Education Expenses Covered In the 2016 amendment to the law, the legislature included payments for up to five college applications, two standardized entrance exams and a standardized college entrance exam preparation course, which prior to 2016, were not covered. The other college expense included under the law are tuition, fees, housing, meal plans, books, supplies medical expenses including insurance, and reasonable living expenses. If the child is going to be living at home with one or both of the parents while going to college, the court will look at the child’s living expenses such as food, utilities, and transportation and determine what portion of those expenses each parent will pay. Conflicts Over Child's Selected College There has often been litigation over which school their son or daughter should attend. This decision is often centered around the cost of the different school options: a local community college or a four-year University or an in-state college versus an out-of-state college. These arguments are often predicated on the cost of each potential school their child could attend along with the different views, values and college associations held by each parent. However, in our experience, the financial aspect of a child's college education is generally the issue that is brought before the court. The 2016 amendment to the college expense was drafted to eliminate some of this disagreement by placing a cap on college costs based on the cost of the University of Illinois. The courts will look at the costs of tuition, fees, housing, and meal plans at the University of Illinois and use those costs as a benchmark for the maximum each parent may have to contribute. In addition, the court has the ability to order payments be made to the child, to the other parent or directly to the college. Child’s Obligations Under the College Expense Law The child also has requirements under Section 513. The child will have to sign all paperwork to allow a parent, ordered to contribute to college costs, access to their transcripts, records, and grade reports. This requirement is also new in 2016 and makes sense as prior to 2016 a parent could be ordered to contribute but had no access if their child did not consent. This allows a parent to monitor the grades and schedules of their child and make sure they are maintaining at least a “C” grade point average. If you are paying for college, you are going to want to know that your child is attending classes and making progress towards a degree. Impact of a 529 Saving Plan on Child's College Expenses Under the law, any 529 savings plan has always been considered in determining the amount the parents and child must contribute. In addition, it is important to understand that no matter who has funded or provided the 529 plan of the child, that account is considered a recourse of the child, not of either parent. This law does not give the child a free ride, many court decisions have required the child to apply for financial aid and often be responsible for a small portion of the costs. Child Cannot Sue a Parent for Contribution to College Expenses A provision was added to the law in the amendments in 2016 that terminated a child’s ability to go to court on their own and sue their parents for payment of their college education. The law used to allow the children of divorced parents to do this but the ability for children to sue their parents has been removed by language that states: “The child is not a third-party beneficiary to the settlement agreement or judgment between the parties after trial and is not entitled to file a petition for contribution.” However, if one of the parents who would have had a right to file a petition for contribution on behalf of their child has passed away or is legally disabled, then the child would have the right to file a petition for contribution, the child of the party may file a petition for contribution. Seek Legal Advice Before Your Child Plans to Attend College You may have questions about the impact of Illinois' contribution to college expenses law and how it pertains to your child. It is important to review your Marital Settlement Agreement and get a petition on file for college contribution prior to your child attending college as it may be the case where you can only obtain contribution to college expenses from the date you filed forward. Anderson & Boback are dedicated to helping you make the best decisions by explaining all your options and taking the necessary action to protect you and your child’s interests. Contact us today for a confidential consultation to learn more about Illinois' college expenses law and payment of your child's college expenses. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/college-expenses/childs-college-expenses-illinois/ Partner Jessica C. Marshall recently represented a Father in a Parentage case filed before the minor child in question was even born, settling the matter for an extremely reasonable child support amount, as well as a very substantial parenting time schedule for the Father.
Mother Filed Child Support and Parentage Case Prior to Child’s Birth Father and Mother were never married, and Father lived out of state. Mother resided in Illinois and prior to the child being born, the Mother filed a Child Support and Parentage case. After the child was born, the Father began exercising parenting time by flying to Illinois as often as he could to visit with his young child, but the parenting time schedule was not enough. Mother continued to unilaterally exercise major decisions for the minor child throughout the pendency of the case. Father Relocates to Illinois to Be Close to His Minor Child Father obtained new employment and relocated to Illinois approximately two (2) years into the matter pending with the court. Upon his relocation to Illinois, Anderson & Boback obtained an increase in Father’s parenting time. Then, after Father moved to Illinois and took a new job, Mother filed a Petition to relocate the minor child. Father Awarded Joint Decision Making with Over 40-Percent Parenting Time Despite these obstacles, Jessica was able to successfully negotiate joint decision making to be shared between Father and Mother in all major areas, as well as substantially increasing Father’s parenting time. Specifically, Father and Mother now share decision making for health care, education, childcare, religion, and extra-curricular activities. Father now has more than 40% of the parenting time with the minor child, despite Father having resided in a different state for the first two years of his child’s life. Anderson & Boback is thrilled with this equitable and fair result for this family and is committed to fighting for the rights of all parents to spend quality and substantial time with their children. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/case-victories/parenting-time-and-child-support-victory/ If My Ex Has an Increase in Income Will the Court Modify the Child Support Amount I Have to Pay?11/4/2019 In Illinois, the parent paying child support cannot modify support using the other parent’s increased income as a substantial change in circumstances. While the new support law takes into account the income of both parents, there still needs to be a substantial change in circumstance to ask the court to modify the child support. It is problematic since every person who pays the support, wants the court to take a fresh look at the support obligation to include their ex’s income.
For those earning about the same about of income, or a bit more, can easily determine that their support obligation would go down if their ex’s income was now a part of the calculation. How does an obligor get the court to review it though? It does seem unfair to watch some people modify their support obligation while others are still required to pay more than they should under the new statute. Shouldn’t the new statute be applied equally to everyone and allow everyone to pay the required amount under the statute? A lot of people are trying it, like the father in the recent Salvatore case, but they aren’t successful unless there is a change in circumstances. Attempt to Modify Child Support In Re Marriage of Salvatore The father in Salvatore attempted to modify his support obligation under the new statute. He was unsuccessful. He argued on appeal that there had been a substantial change in circumstances since his divorce from his ex-wife. He argued first that his income had gone down, and secondly, that his ex-wife was now making more money than she did at the time of the divorce. The Illinois support statute reads as follows: At all times relevant, section 801(c) of the Act has provided that "[t]his Act applies to all proceedings commenced after its effective date for the modification of a judgment or order entered prior to the effective date of this Act." 750 ILCS 5/801(c) (West 2014); 750 ILCS 5/801(c) (West 2016). Also at all times relevant, section 510(a)(1) of the Act has provided that an order for child support may be modified "upon a showing of a substantial change in circumstances." 750 ILCS 5/510(a)(1) (West 2014); 750 ILCS 5/510(a)(1) (West 2016). However, Public Act 99-764 notably added the following language to section 510(a): "The court may grant a petition for modification that seeks to apply the changes made to subsection (a) of Section 505 by this amendatory Act of the 99th General Assembly to an order entered before the effective date of this amendatory Act of the 99th General Assembly only upon a finding of a substantial change in circumstances that warrants application of the changes. The enactment of this amendatory Act of the 99th General Assembly itself does not constitute a substantial change in circumstances warranting a modification." (Emphasis added.) Pub. Act 99-764 (eff. July 1, 2017) (amending 750 ILCS 5/510(a)). A Change in the Law Does Not Meet a Substantial Change In Circumstance In other words, you aren’t allowed to modify your support obligation by arguing the law changed, and that is your substantial change. The substantial change in circumstance cannot be that the law changed. In Re Marriage of Salvatore Case Background In the Salvatore case, the parties had three children. At the time of divorce, his ex-wife was not working and Daniel agreed to pay her $8,10.00 per month, which then was 32% of his net income. Support used to be calculated by a percentage based on how many children you had, but only the obligor’s net income was used. Under the new statute, both parties’ incomes are used. Years after the divorce, Daniel filed a petition to modify child support, arguing that his decreased income constituted a substantial change in circumstances. He further pled that the statute had changed, and under the new statute, his ex-wife’s income should now be factored into the equation. According to Daniel, his ex-wife's gross income from her new job was approximately $45,000 per year. Daniel sought to lower his support from $8,100 a month to $3,244 using the new statute. At the child support hearing, Daniel testified that his individual 2017 tax return showed a gross income that was significantly less than his gross income from previous years. However, his personal banking records showed he had several large sums of money deposited into his account that weren’t reflected on his tax returns. Wife Argued Husband’s Financial Records with Fictitious When Daniel completed his case, his ex-wife argued that his financial affidavit and tax returns were "completely fictitious" and that he was simply attempting to take advantage of the new child support guidelines in section 505 of the Act. In response, Daniel argued that there had been two substantial changes in circumstances: his decreased income and Brenda's increased income. Over Brenda's objection, the trial court allowed Daniel to amend his petition to conform with the proofs and add an allegation that Brenda's increased income constituted a substantial change in circumstances. However, the new law also says that the modification shouldn’t be used as a means to lower support to the obligor. Husband’s Financial Records "Not the Most Accurate" The trial court began by finding that Daniel's tax returns were "not the most accurate total of his income" and rejected his argument that they constituted a substantial change in circumstances. The Court next looked at whether the ex-wife’s new increased income could be a substantial change. Mother's Income Was Not a Factor in Determining Father's Child Support Obligation The Court said that " the non-supporting parent's income was not a factor in determining the supporting parent's child support obligation.” In closing, the court ruled that Brenda's current income could not be a basis to modify Daniel's child support obligation. Modification of Child Support Denied for Failure to Show a Change in Circumstance The Court reasoned that Daniel had filed his Petition to Modify Child Support after the Public Act (the new child support statute) became effective. If Daniel could establish a substantial change in circumstance since his divorce was entered in 2015, then he would be allowed to modify his support obligation. If he established that change in circumstance, he would be allowed to use the new child support law which would include his ex-wife’s income. Everyone agreed that if he met the substantial change in circumstance requirement and were allowed to modify, his child support obligation would be reduced. Father’s Income Did Not Establish a Substantial Change Daniel’s problem in this case, however, was that his income (or at least his proof of the income) did not establish a substantial change. It seems clear when you read the case that the Court really thought (probably rightly so) that he wanted to modify his support obligation due to his ex making a lot more money since the date of the divorce. Appellate Court Reviews Income as the Substantial Change in Circumstance On appeal, the first issue raised by Daniel is whether his ex-wife's income is relevant, as a matter of law, to establish a substantial change in circumstances. The Court looked at whether, at the time of divorce, if the parties contemplated that his ex-wife would work in the future. A review of her working history during the marriage was scrutinized and the Court found that the parties always intended that Daniel’s ex-wife would work. The Court reasoned that if you thought at the time of marriage that she would work and make more money, and then she did, there is no substantial change in circumstance. The Court looked at the Hughes case. In Hughes, the ex-wife filed a petition to modify the ex-husband's child support obligation, based on the ex-husband's increased income due to the termination of his maintenance and car payments. Hughes, 322 Ill. App. 3d at 817. The trial court granted the petition and increased the ex-husband's child support obligation, based on these changes in his " 'financial situation.' " Id. at 818. The Appellate Court reversed, however, holding in pertinent part: "The increase in [the ex-husband's] available income to pay child support following the termination of maintenance and car payments did not constitute a substantial change in circumstances because these events were contemplated and were expected by the court when the judgment for dissolution of marriage was entered." Id. at 819. Cannot Rely on an Event Contemplated When Child Support Originally Set The events contemplated in Hughes were certain to occur, and Daniel’s ex-wife going to work and earning more income was also contemplated. The Appellate court said that Daniel cannot rely on the occurrence of an event that he contemplated when he negotiated these other contractual obligations. To rely on the occurrence of an event to establish a substantial change in circumstances that would trigger a downward modification of his child support obligation now would not be allowed. The Appellate court affirmed the trial court and said the court was correct in refusing to consider the ex-wife’s income as a basis for determining whether there was a substantial change in circumstances. Attempts to Modify Support Obligation Because of Change in Law Not Permitted Daniel argued that his child support obligation under the new guidelines would be less than half of his obligation based on the prior guidelines. He told the Court, that for them to ignore this much of a substantial change was inequitable. The Appellate Court disagreed. The Appellate Court stated that Daniel's reliance on the fact that the statute changed (and now calculated both parties’ incomes instead of just one party’s) was exactly what the Public Act 99-764 stated was not allowed. The makers of the Public Act knew that obligors would attempt to modify their support obligation simply because of the change in the law, and they purposely added language to disallow it. In closing, the Appellate Court said that even if Daniel’s ex’s income could be considered, they found that Daniel’s income was not a substantial change and affirmed the trial court’s ruling to deny Daniel’s request to modify his support obligation. Salvatore v. Salvatore (In re Marriage of Salvatore), 2019 IL App (2d) 180425 (Ill. App., 2019) THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-support-modification/modify-child-support-increase-income/ |
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August 2022
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