Dec 1, 2012

IICLE Family Law Flash Points - December 2012

1.         Guardian has standing to institute dissolution of marriage proceedings on behalf of disabled party.  The Supreme Court overturned pre-existing case law and held that a guardian has standing to institute dissolution of marriage proceedings on behalf of a disabled party provided that the guardian can show by clear and convincing evidence that that bringing such a petition would be in the party’s best interest.  The Court held that a guardian should be allowed to use the substituted-judgment provisions under section 11a-17(e) of the Probate Act to make a decision to seek a dissolution of marriage if that was in the ward’s best interest.  Karbin v. Karbin, by and through her guardian Kara Hibler, 2012 IL 112815. 

2.         Supreme Court holds money a child support payor systematically withdraws from personal savings is not includable in the calculation of “net income” under Section 505 of the IMDMA.  The Supreme Court held that money an unemployed parent regularly withdrew from a savings account was in fact not includable in calculating “net income.”  The father was unemployed and living off assets awarded to him as part of the judgment for dissolution of marriage at a rate of $8,500 per month.  Although the amount of support generated by the payor’s actual net income was inadequate, the savings withdrawals were not “income.”  The proper procedure is to calculate net income without regard to the regular savings withdrawals, and then consider whether 28% of that amount of support is inappropriate based on a calculation which would include his actual liquidation of assets.  In re the Marriage of McGrath, 2012 IL 112792.

3.         Potential personal injury claim not marital property.  Because husband had not filed a personal injury claim at the time of trial for injuries suffered in a motor vehicle accident during the marriage, it was speculative as to whether he would actually file an action.  Therefore, any potential personal injury damages were not marital property.  The cases relied upon by wife in support of her position that the trial court should have considered the potential damages all involved personal injury claims filed before or during the pendency of the divorce case. In re the Marriage of Berberet, 2012 IL App (4th) 110749.

4.         Mother allowed to seek reimbursement for contribution to college expenses she made prior to her petition.  Mother sought contribution from father in the amount of $275,000 after the child completed college and law school.  Because the obligation of the parties was clearly and affirmatively expressed in the marital settlement agreement, even though the actual allocation of the expenses was not made and a dollar amount was not set forth when the judgment was entered, Mother could seek contribution from Father.  In re the Marriage of Koenig, 2012 WL 1493731.

5.         Summary judgment not proper where there was a material issue of fact whether shares in a family company acquired after the marriage were actually purchased via distributions from the company.  Shares in a company acquired through $60,000 distributions were not non-marital at summary judgment because husband did not put on evidence that the $60,000 were indeed distributions from the company and not compensation for his personal efforts relating to his employment at the company.  Husband offered no compensation analysis to prove that his salary was adequate compensation for his services and offered only testimony that the $60,000 were distributions with no supporting documentation.  In re the Marriage of Dann, 2012 IL App (2d) 100343.

6.        The mere label of maintenance as “rehabilitative” does not necessarily make it so.  In a post-judgment action, husband sought to terminate maintenance pursuant to the language in the parties’ Marital Settlement Agreement that provided husband was to pay his wife (who was diagnosed with myasthenia gravis during the marriage) with $2,000 per month for rehabilitative maintenance until his retirement, the death of either party, or wife’s remarriage. Husband sought termination when he retired at age 59. However, despite the word “rehabilitative” in the agreement, the parties had essentially entered into an agreement for permanent maintenance because the award was to continue without limitation until husband retired or the other terminating events.  Also critical was the fact that there was no language providing that after a certain amount of time the parties would determine if the wife had diligently sought employment in order to become self-sufficient.  In re the Marriage of Bolte, 2012 WL 3985846.

7.         Dissipation claim properly denied where wife claimed irretrievable breakdown of the marriage existed three to six years prior to the filing of the petition.  At trial, Wife argued the trial court should have found that the marriage was undergoing an irretrievable breakdown at least three to six years prior to the filing of the petition for dissolution.  However, the Appellate Court disagreed holding that an irretrievable breakdown is not a “prolonged gradual process extending from the initial signs of trouble in a marriage until the actual breakdown itself.”  The proper date is the date by which it is apparent that a breakdown is inevitable.  In re the Marriage of Romano, 2012 WL 982793. 

8.         Retained earnings of a nonmarital subchapter S Corporation are not marital income.  The Appellate Court held retained earnings in an S Corporation were non-marital.  The Court’s analysis focused on a “DFO” (Due from Officers) Account which was a revolving line of credit often used by the shareholders for personal investments and personal expenses. The Court held the DFO account was not akin to retained earnings.  Husband had restrictions on his ability to disburse the retained earnings, the company relied on the retained earnings reported on the corporate tax return to operate the business, and husband was adequately compensated through his salary.   In re the Marriage of Steel, 2011 IL App (2nd) 080, 974.

9.         Former boyfriend of adoptive mother does not have standing to seek custody.  After the mother of an adoptive child from Slovakia and her boyfriend ended their nearly ten year living arrangement as a couple, the boyfriend petitioned the court for joint custody.  However, the parties never married and he took no steps to obtain recognition of the adoption in Illinois nor did he adopt the child.  He did not have standing to bring a cause of action for custody of the child.  In accordance the statutory standing requirement, a nonparent may petition for custody only if the child is not in the physical custody of a parent.  In re the Parentage of Scarlett, 2012 IL App (2nd) 120266.  

10.       Withdrawal from retirement accounts not income for purposes of maintenance modification.  Husband filed a petition to terminate and/or to modify maintenance on the grounds that a substantial change of circumstances occurred when he was forced to resign from his lucrative law position after his business dwindled and his firm merged with another firm.  The trial court found a substantial change of circumstances had occurred and ordered a modification in maintenance from $14,000 per month to 20% of his gross income, including withdrawals on his retirement accounts.  However, Section 504 of the IMDMA does not permit the trial court to consider withdrawals from retirement accounts in setting the amount of a maintenance award.  Wife in this case had waived any and all interest in the husband’s retirement plans in the settlement agreement. In re the Marriage of McLauchlan, 2012 WL 880603.

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