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Publications

Undistributed Income From S Corp Owner – Is It Imputed Income for Setting Child Support?

Published in Chicago Lawyer Magazine, June 2015
by Daniel R. Stefani

The Illinois Appellate Court First District on March 13, 2015 issued the Opinion of In re the Former Moorthy and Arjuna, 2015 IL App (1st) 132077. The case involved a post-decree modification of child support requested by the payee ex-spouse. Well after the parties’ divorce, the payor ex-spouse acquired a 91% ownership interest in an S Corporation which paid him wages and the entity also reported K-1 income to the payor ex-spouse as his share of the net income of the entity. The issue was whether, in addition to his W-2 wages, any K-1 income reported as a result of his ownership in the S Corp (but not actually received by him) could be considered as imputed income to him, for purposes of recalculating his child support obligation. The Trial Court held that the payor ex-spouse’s share of the retained earnings from his majority owned sub-chapter S Corporation which were not distributed to him should NOT be imputed to him for purposes of calculating his child support obligation. The Appellate Court affirmed.
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Eavesdropping in Illinois is Again a Crime

Published in Chicago Lawyer Magazine, April 2015
by Daniel R. Stefani

Former Governor Quinn signed into law on December 30, 2014 a new Illinois eavesdropping law.  The law was effective December 30, 2014.  This follows a window of time from March 20, 2014 through December 30, 2014 where the State of Illinois was without a law prohibiting eavesdropping.  This law makes eavesdropping a crime in Illinois despite the vague ambiguous language of the new statute.
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Mutual vs. Correlative Separate Orders of Protection

Published in Chicago Lawyer Magazine, February 2015
by Daniel R. Stefani

Recently the First District rendered an Opinion in In re Marriage of Kiferbaum.  The court made an important clarification between mutual orders of protection which are totally prohibited by Section 215 of the Illinois Domestic Violence Act of 1986 (“IDVA”) and correlative separate orders of protection which are not favored but allowed if certain requirements are met.
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Taking Charge Before it’s Too Late: Determine a Business’ Fair Market Value Prior to Divorce

Published in Chicago Lawyer Magazine, December 2014
By Daniel Stefani

One of the biggest problems a privately held business owner usually has in a divorce proceeding is the risk that a court will find his or her ownership interest to be worth far more than all or most of the other assets combined in a marital estate.  This creates the obvious problem of how the business owner pays his or her spouse an equitable share of the estate, especially since most businesses do not have the liquidity to support an immediate “buyout” of the other spouse.
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The Divorce Court’s Control of Parental Conduct

Published in Chicago Lawyer Magazine, October 2014
by Daniel R. Stefani

On May 28, 2014, in a 2-1 decision, the First District Appellate Court dismissed an appeal by a mother who disagreed with an order entered by the Trial Judge, which prohibited the parents from participating in certain behaviors when with their three children. While the trial court dismissed the appeal based on their holding that the order at issue was not an injunction for purposes of permitting an interlocutory appeal, the majority went on to analyze the order and hold that the order did not violate the mother’s right to due process. The dissent’s position was that the order was an injunction and that the order was defective on both procedural and substantive grounds. The case is In re Marriage of Eckersall, 2014 IL App (1st) 132223. It is fascinating the level of control a Judge has over parents once they avail themselves to the Court System.
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Disability Benefits – Marital Property or Income?

Published in Chicago Lawyer Magazine, August 2014
by Daniel R. Stefani

Since 1980, Illinois law has consistently held that disability benefits in pay status are marital property, subject to an equitable division between the parties. Other jurisdictions have held that disability benefits in pay status are income which can be considered for child support and maintenance issues. As such, in Illinois, any disability policy acquired during the marriage that begins paying benefits during the marriage is presumptively marital property. The case law is silent as to whether a disability benefit policy that is acquired before the marriage but begins payment during the marriage is marital or non-marital property. One could argue that if the policy is acquired prior to the marriage and payments begin during the marriage, the payments are non-marital property because the policy (the “asset”) was acquired prior to the date of marriage, versus the acquired “asset” being the disability payments. In such a case, it could be argued that the non-marital property could then be considered in the owner spouse’s ability to pay child support and/or maintenance. Also, it is unclear what, if any, authority the Court has over disability insurance policies that are not in pay status.
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Mediation of Financial Issues in Divorce

Published in Chicago Lawyer Magazine, June 2014
by Daniel R. Stefani

Effective March 17, 2014 Local Cook County Rule 13.4(e) regarding mediation of certain domestic relations issues has been revamped and expanded to allow for all aspects of a domestic relations case, including financial matters, to now be mediated by Court order.
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Who Gets the Pre-Embryo?

Published in Chicago Lawyer Magazine, April 2014
by Daniel R. Stefani

With the advance of technology comes new and interesting issues. For a while now, couples can freeze and use the male’s sperm and the female’s eggs to create pre-embryos. The eggs are fertilized in vitro and then the pre-embryos are frozen for potential impregnation in the egg donor or some third party. The issue resulting from creating frozen pre-embryos is who controls the disposition of cryopreserved pre-embryos when and if the couple decides to split up. In June 2013, the Appellate Court of Illinois, First District decided a case dealing with frozen embryos and the disposition of same.
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Same Sex Marriage in Illinois Becomes Law

Published in Chicago Lawyer Magazine, February 2014
by Daniel R. Stefani

On November 20, 2013 Governor Pat Quinn signed into law the Religious Freedom and Marriage Fairness Act (“Act”).  The Act becomes effective June 1, 2014.  Illinois becomes the sixteenth state in the nation to allow same sex couples to get married.  It is also allowed in the District of Columbia.
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A Divorce, A Bonus, A Dispute

Published in Chicago Lawyer Magazine, November 2013
By Daniel Stefani

Most compensation these days has two component parts – base salary and discretionary cash, also known as a noncash bonus.
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Katz & Stefani, LLC
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Katz & Stefani, LLC
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