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Taking some of the guesswork out of spousal maintenance

On Behalf of | Sep 6, 2016 | Uncategorized |

Spousal maintenance, often called alimony, may be far less common than it once was, but it’s still a consideration in many divorces, and states vary widely in how they address it. Recent updates to the Illinois Marriage and Dissolution of Marriage Act include a new formula used for calculating maintenance that went into effect January 1, 2015.

Before the new law was enacted, judges had considerable discretion in determining the amount of maintenance one member of a divorcing couple was required to pay the other. Now, once a judge determines maintenance is appropriate – based, as before, on a number of factors, including the current and future incomes and needs of both parties – for couples with a combined income of less than $250,000, the maintenance award can usually be determined by a standard formula.

The formula takes into account the gross income of both the payer and the payee in calculating the award, and the new law sets a cap so that a payee may not receive an award that, when added to their own income, is higher than 40 percent of the couple’s combined income. There are also formulas for calculating how long maintenance must be paid, with larger multipliers for longer lengths of marriage. For example, if a marriage lasted less than five years, awards would last less than a year, but for couples married for over 20 years, maintenance would last at least as long as the marriage did.

Here are two examples of how awards could be calculated in cases where a judge has determined that one member of a divorcing couple will owe the other one spousal maintenance.

Example 1

Alex and Pat are divorcing after 16 years of marriage. Alex makes $100,000 a year, and Pat makes $20,000 a year.

Take 30 percent of Alex’s income – $30,000 – and subtract 20 percent of Pat’s income ($4,000): Alex would owe Pat $26,000 a year. They’ve been married between 15 and 20 years, so the length of the award is determined by multiplying the length of their marriage by 0.8: Alex would pay Pat maintenance for 12.8 years.

Example 2

Jack and Jill are divorcing after 12 years of marriage. Jack makes $50,000 a year, and Jill makes $150,000 a year.

Take 30 percent of Jill’s income – $45,000 – and subtract 20 percent of Jack’s income ($10,000): Jill would owe Jack $35,000 a year in maintenance. But this award added to Jack’s own income is $85,000, which is more than 40 percent of their combined income of $200,000. So Jack would only receive $30,000 in maintenance. Since they’ve been married between 10 and 15 years, the length of the marriage is multiplied by 0.6 to determine the length of the award: Jill will pay Jack for 7.2 years.

Financial planning around divorce can be nerve-racking, but if divorcing spouses expect a maintenance award to be part of their settlement, the new formula could make it easier to know what to expect.