Family Law Flash Points - October 2019

3.         Trial court affirmed on ruling that husband failed to show funds transferred from his parents’ trusts were in fact loans.  Husband argued at trial for a declaration that funds transferred from his parents’ trusts created a valid and enforceable lien in the amount of $300,000 each against a piece of marital real estate, and that such liens were marital liabilities.  However, at trial, husband could not produce evidence of loan documents.  The trial court found that under the terms of his parents’ trusts, husband had the power to withdraw income and principal for any purpose, and that he had in fact withdrawn money from the trusts and put the funds into an account under his own name.  The trial court further noted that the evidence did not show that the transactions were actual loans, but rather funds he was authorized under the trust documents to withdraw for his own benefit.  The Appellate Court affirmed.  Husband provided no evidence that he had any obligation to pay back his parents’ trusts.  An attorney drafted and recorded mortgages on behalf of his parents’ trusts, but no note or other loan document was recorded contemporaneously with the mortgages. Without evidence that husband had an obligation to repay the trusts, the mortgage was not a valid encumbrance against the real estate. Therefore, husband was awarded the real estate at a value which did not include $600,000 of debt he alleged was associated with the property. In re Marriage of Slesser, 2019 Il App (2d) 180505.

4.         Northern District of Illinois Bankruptcy Court clarifies application of automatic bankruptcy stay.  The ex-wife of a chapter 13 debtor sought to lift the automatic stay in bankruptcy court so she could seek a contribution to college expenses by her ex-husband.  The bankruptcy court denied the motion as unnecessary.  Section 362(b) of the bankruptcy code provides a list of exceptions to the automatic stay, which include, among many items, a modification of an order for domestic support obligations, which includes a debt in the nature of alimony, maintenance or support of such spouse, former spouse, or child of the debtor.  The state court was free to modify the child support order to include college expenses while the bankruptcy was pending.  There are only two important types of domestic relations proceedings which are barred by the automatic stay: (1) the division of marital property that is property of the estate; and (2) proceedings to collect on a domestic support obligation from property of the estate.  This informative bankruptcy opinion can be read in full here. 

5.         Illinois Supreme Court grants PLA in Sharpe v. Westmoreland.   In May, we reported on the case of Sharpe v. Westmoreland, 2019 IL App (5th) 170321, wherein the Fifth District held on an interlocutory appeal that a partner to a civil union whose partner passes away does not have standing under the IMDMA to seek visitation of a minor child as a step-parent. The Court recognized a natural born parent’s superior right to the care, custody and control of his or her child and the legislature’s omission of any reference to partners joined in a civil union in the definition of stepparents evidenced its intent to exclude civil union partners from the category of nonparents who have standing to seek visitation. The Illinois Supreme Court granted the PLA of the civil union partner.  The Appellate Court opinion can be found here.