By: Madilyn Keating Ellsworth, Esq.
Starting January 1, 2019, more than 250 new laws became effective in Illinois, including significant changes to Illinois’ divorce laws. This article summarizes the major changes to the Illinois Marriage and Dissolution of Marriage Act taking effect this year:
I. Maintenance (750 ILCS 5/504)
As of January 1, 2019, maintenance is no longer tax-deductible to the payor spouse, and no longer includible in the gross income of the recipient spouse. In light of this new federal tax reform, numerous changes were made to Illinois’ maintenance statute effective January 1, 2019, and are summarized below:
- Maintenance Barred if Award is Not Appropriate (750 ILCS 5/504(b-1))
Unless the court finds that a maintenance award is appropriate, the court shall bar maintenance as to the party seeking maintenance regardless of the length of the marriage at the time the divorce action was commenced.
- Guideline or Non-guideline Maintenance Awards (750 ILCS 5/504(b-1))
Only if the court finds that a maintenance award is appropriate, shall the court order guideline maintenance or non-guideline maintenance. However, if the application of guideline maintenance results in a combined maintenance and child support obligation that exceeds 50% of the payor’s net income, the court may determine non-guideline maintenance, non-guideline child support, or both.
- Guideline Maintenance Awards (750 ILCS 5/504(b-1)(1)(A))
If the parties’ combined gross annual income is less than $500,000, and the payor has no obligation to pay child support or maintenance or both from a prior relationship, the amount of maintenance shall be calculated by taking:33 1/3% of the payor’s net annual income, minus 25% of the payee’s net annual income. The amount calculated as maintenance, however, when added to the net income of the payee, shall not result in the payee receiving an amount that is in excess of 40% of the combined net income of the parties.
- Modification of Maintenance Orders Entered Before 1/1/19 (750 ILCS 5/504(b-1)(1)(B)) and (750 ILCS 5/504(b-4))
Modification of maintenance orders entered prior to 1/1/19 that are and continue to be eligible for inclusion in the gross income of the payee for federal income tax purposes and deductible by the payor shall be calculated by taking:
30% of the payor’s gross annual income minus 20% of the payee’s gross annual income, unless both parties expressly provide otherwise in the modification order. The amount calculated as maintenance, however, when added to the gross income of the payee, may not result in the payee receiving an amount that is in excess of 40% of the combined gross income of the parties.For any order for maintenance or unallocated maintenance and child support entered before 1/1/19 that is modified after 12/31/18, payments thereunder shall continue to retain the same tax treatment for federal income tax purposes unless both parties expressly agree otherwise and the agreement is included in the modification order.
- Maintenance Findings (750 ILCS 5/504(b-2)(3))
The court shall state whether the maintenance award is fixed-term, indefinite, reviewable, or reserved by the court.
- Gross income for Maintenance Purposes (750 ILCS 5/504(b-3))
Gross income means all income from all sources, except maintenance payments in the pending proceedings shall not be included.
- Net income for Maintenance Purposes (750 ILCS 5/504(b-3.5))
Net income has the meaning provided in Section 505 of the Act (i.e., Child Support), except maintenance payments in the pending proceedings shall not be included.
- Maintenance Designation (750 ILCS 5/504(b-4.5))
- Fixed-term maintenance (750 ILCS 5/504(b-4.5)(1)) – If a court grants maintenance for a fixed term, the court shall designate the termination of the period during which this maintenance is to be paid. Maintenance is barred after the end of the period during which fixed-term maintenance is to be paid.
- Indefinite maintenance (750 ILCS 5/504(b-4.5)(2)) – If a court grants maintenance for an indefinite term, the court shall not designate a termination date. Indefinite maintenance shall continue until modification or termination under Section 510.
- Reviewable maintenance (750 ILCS 5/504(b-4.5)(3)) – If a court grants maintenance for a specific term with a review, the court shall designate the period of the specific term and state that the maintenance is reviewable. Upon review, the court shall make a finding in accordance with 504(b-8), unless the maintenance is modified or terminated under Section 510.
II. Child Support (750 ILCS 5/505)
The Illinois child support statute was amended to align with the federal tax law changes concerning maintenance, and to create uniformity with the new Illinois maintenance statute outlined above.
- Gross income for Child Support Purposes (750 ILCS 5/505(a)(3)(A))
Gross income includes maintenance treated as taxable income for federal income tax purposes to the payee and received pursuant to a court orer in the pending proceedings or any other proceedings and shall be included in the payee’s gross income for purposes of calculating the parent’s child support obligation.
- Net Income for Child Support Purposes (750 ILCS 5/505(a)(3)(B))
Net income includes maintenance not includable in the gross taxable income of the payee for federal income tax purposes under a court order in the pending proceedings or any other proceedings and shall be included in the payee’s net income for purposes of calculating the parent’s child support obligation.
- Spousal Maintenance Adjustment (750 ILCS 5/505(a)(3)(F)(2)
Obligations pursuant to a court order for spousal maintenance in the pending proceeding actually paid or payable to the same party to whom child support is to be payable or actually paid to a former spouse pursuant to a court order shall be deducted from the parent’s after-tax income, unless the maintenance obligation is tax deductible to the payor for federal income tax purposes, in which case it shall be deducted from the payor’s gross income for purposes of calculating the parent’s child support obligation.
III. Modification and termination of provisions for maintenance, support, educational expenses, and property disposition (750 ILCS 5/510)
An order for maintenance may be modified or terminated only upon a showing of a substantial change in circumstances. The court may grant a petition for modification that seeks to apply the changes made to Section 504 by these amendments to an order entered before the effective date of these amendments only upon a finding of a substantial change in circumstances that warrants application of the changes. The enactment of the amendment itself, does not constitute a substantial change in circumstances warranting a modification. 750 ILCS 5/510(a-5).
IV. Disposition of Property and Debts – Designation of Life Insurance Beneficiary (750 ILCS 5/503)
A large aspect of divorce is the division of property and debts, including life insurance policies and proceeds. Newly enacted Section 503(b-5)(2) addresses treatment of a life insurance beneficiary designation upon entry of a divorce judgment, and is summarized below:
If a divorce judgment is entered after an insured has designated the insured’s spouse as a beneficiary under a life insurance policy in force at the time of entry, the designation of the insured’s former spouse as beneficiary is not effective unless:
- The divorce judgment designates the insured’s former spouse as the beneficiary;
- The insured re-designates the former spouse as the beneficiary after judgment entry; or
- The former spouse is designated to receive the proceeds in trust for, or on behalf or, or for the benefit or a child or a dependent of either former spouse.
If a designation is not effective under one of the foregoing examples, the proceeds of the policy are payable to the named alternative beneficiary, or if there is not a named alternative beneficiary, to the estate of the insured.
An insurer who pays the proceeds of a life insurance policy to the beneficiary under a designation that is not effective under the above examples is liable for payment of the proceeds to the person or estate, only if:
- Before payment of the proceeds to the designated beneficiary, the insurer receives written notice at the home office of the insurer from an interested person that the designation is not effective under the statute; and
- The insurer has not filed an interpleader (i.e., a lawsuit to compel two parties to litigate a dispute).
Note: the provisions of the new statute do not apply to life insurance policies subject to regulation under ERISA, the Federal Employee Group Life Insurance Act, or any other federal law that preempts application.
V. Visitation by Certain Non-Parents (750 ILCS 5/602.9)
With certain exceptions, certain non-parents may bring an action requesting visitation with a child.
The list of “appropriate persons” includes grandparents, great-grandparents, step-parents, and siblings of a minor child age 1 or older. These individuals may bring a petition for visitation and electronic communication if there has been an unreasonable denial of visitation by a parent and that denial has caused the child undue mental, physical, or emotional harm, and one of the following qualifying conditions exists:
- The child’s other parent is deceased or has been missing at least 90 days;
- A parent of the child is incompetent as a matter of law;
- A parent has been incarcerated in jail or prison for more than 90 days immediately prior to filing the petition;
- The child’s parents have been granted a divorce or legal separation, or there is a pending dissolution proceeding or other action involving parental responsibilities or visitation of the child and at least 1 parent does not object to the grandparent, great-grandparent, step-parent, or sibling having vitiation with the child; or
- The child is born to parents who are not married to each other, the parents are not living together, the petitioner is a grandparent, great-grandparent, step-parent, or sibling of the child and the parent-child relationship has been legally established.
The newly amended Section 602.9(c)(E)(iv)-(v) clarifies that if the petitioner is a grandparent or great-grandparent, the parent-child relationship need be legally established only with respect to the parent who is related to the grandparent or great-grandparent. If the petitioner is a step-parent, the parent-child relationship need be legally established only with respect to the parent who is married to the petitioner or was married to the petitioner immediately before the parent’s death.