IICLE Family Law Flashpoints - January 2022

That Maintenance Payments Were Non-Modifiable, as Set Forth in Marital Settlement Agreement, Upheld

In In re Marriage of Dynako, 2021 IL 126835, the husband appealed the trial court’s ruling that the maintenance payments set forth in the parties’ marital settlement agreement (MSA) were non-modifiable pursuant to §502(f) of the Illinois Marriage and Dissolution of Marriage Act (IMDMA), 750 ILCS 5/101, et seq. The appellate court affirmed, and the husband appealed to the Illinois Supreme Court, which also affirmed. The parties’ MSA contained a maintenance payment schedule with detailed amounts owed each year for a specific period of time. The MSA also contained the following language: “Said maintenance payments shall be nonmodifiable pursuant to Section 502(f) of the Illinois Marriage and Dissolution of Marriage Act.” 2021 IL 126835 at ¶17. The husband argued that the obligation was modifiable under §502(f) because the statute provides that if the parties do not provide that the maintenance is non-modifiable in amount, duration, or both, the terms are modifiable upon a substantial change of circumstances. The Supreme Court disagreed and held that the maintenance obligation was non-modifiable, stating that his argument had “absolutely no support” and that the language of the MSA not only expressly provided the obligation was non-modifiable but also specifically cited the applicable provision of the statute. 2021 IL 126835 at ¶19.

Support Payor’s Receipt of Required Mandatory Distributions from Inherited IRAs Is Income for Purposes of Maintenance and Child Support

In a matter of first impression, the Illinois Supreme Court held that a support payor’s receipt of mandatory distributions from an inherited IRA is income for purposes of §§504 and 505 of the IMDMA. In re Marriage of Dahm-Schell, 2021 IL 126802. The husband inherited approximately $615,000 during the pendency of the divorce case, the majority of which was held in inherited IRAs. The trial court did not include the distributions in the maintenance and child support calculations, and the appellate court reversed. The Supreme Court affirmed the appellate court. The Supreme Court focused its analysis on the caselaw, which broadly construes income as “income from all sources,” and its prior ruling in In re Marriage of Mayfield, 2013 IL 114655, 989 N.E.2d 601, 371 Ill.Dec. 11, which defined “income” as gains and benefits that enhance a noncustodial parent’s wealth and facilitate that parent’s ability to support a child. 2021 IL 126802 at ¶¶17 – 18. It also distinguished the case at bar from In re Marriage of McGrath, 2012 IL 112792, 970 N.E.2d 12, 361 Ill.Dec. 12, which involved an unemployed payor living off of assets awarded to him in the divorce. In its opinion, the court restated McGrath’s significance to mean that in order to avoid double counting, the liquidation of an asset awarded in a divorce is not income if the asset has been previously imputed to the party for maintenance and support purposes. The court also restated the holding in In re Marriage of Rogers, 213 Ill.2d 129, 820 N.E.2d 386, 389 Ill.Dec. 610, to mean that the money at issue in that case ultimately factored into support as income not because it was received as gifts and loans, but because it was received after the divorce and had not been previously imputed as income for support purposes. Therefore, because the husband in the case at bar never earned or contributed to the inherited IRAs, any distributions he received from the accounts increased his wealth and should be included in the statutory definition of “income” for purposes of calculating support.

Income for Purposes of Support and Maintenance Includes Mandatory Distributions from Inherited IRAs Reinvested in Husband’s IRA

In Dahm-Schell, supra, the Supreme Court held that the fact that the husband chose to reinvest required mandatory distributions from an inherited IRA into his own IRA did not shield such distributions from being considered income for purposes of maintenance and support calculations. It was the husband’s choice to reinvest the required mandatory distributions into his own IRA, and such action did not exclude such funds from the statutory definition under the IMDMA.