Implications of Bifurcated Dissolution of Marriage Proceedings

Published in Chicago Lawyer Magazine, September 2010
By Daniel Stefani

In certain situations where there is a pending petition for dissolution of marriage, the parties can agree or in certain rare situations, the Court may grant a motion of either party to bifurcate their dissolution of marriage proceedings. This means that the Court enters an order immediately dissolving the bonds of the parties’ marriage but reserving adjudication of the remaining issues such as the division of marital assets and debts, maintenance, child support, custody and attorneys’ fees to a later date.

As relates to the issues of child support, custody and maintenance, the effect of a hearing on those issues at a much later date following the date of divorce adds little complexity to the trial Court’s adjudication of those issues. However, in identifying marital assets and liabilities and valuing them, there are many difficulties resulting from a hearing many months or even years following the entry of the divorce.

Specifically, the current case law and statute directs the Court to value assets and liabilities on the date the marriage is dissolved and not the date subsequent where the hearing on the issues of allocation of property and debt are heard, even if months or years later. In the recent 2009 3rd District case of In Re Marriage of Awan, the parties agreed to a bifurcated dissolution of their marriage in March 2004 which reserved the remaining issues for future determination. Ultimately, 18 months later, the Court conducted a hearing and thereafter, entered a final order in the proceedings which divided the property. For the most part, the Court used a valuation date as close to the date of the dissolution as practicable. The Appellate Court, affirmed the trial Court’s reliance on the case law that states that the property should be valued on the date the marriage is dissolved. The Appellant argued that the Court should have valued the assets on the date of the ultimate hearing.

The Awan case highlights the inherent problems in creating a fiction by putting the trial Court in a position to value and divide an estate which existed months, if not years, before the hearing date. In a traditional dissolution action, the assets are valued and divided as close to the trial date as practicable, which is typically much closer in time to the ultimate dissolution of the parties’ marriage. In such a case, there is still a lag time between the date of value and the ultimate date of dissolution. However, the lag time is usually much less than in a bifurcated dissolution situation.

In an Awan type situation, where the parties agree to a bifurcated dissolution, the Court should still consider the potential difficulties in having to value and divide property several months or even years following the entry of the divorce. Property at the time of the ultimate hearing on the issue may not even exist at that point. Obviously, values can change significantly in such a period of time, especially in today’s economic climate. This creates potential inequities between the parties and puts the Court in a very difficult position. Theoretically, all evidence of any post-dissolution events occurring during the months or years following the dissolution would be irrelevant.

One potential solution that could help the Court in such a situation would be to allow such evidence post-dissolution to come into evidence and allow the Court further discretion in making a finding of value of such property subsequent to the dissolution date. Until the case law or the statute establishes such discretion, Courts are left with few remedies to avoid being put in a difficult position when the hearing on the reserved issues is conducted months or years later.

Until a change in the law, the Court may still use its discretion in allowing a bifurcated judgment to be entered even when both parties agree. The Court could require the parties to make an express agreement in conjunction with their proposed bifurcation that either the dissolution date will control valuation or some other date in the future, or as the statute indicates in a non-bifurcated situation, as close to the ultimate hearing date on the reserved issues as practicable. This would resolve any potential disputes between the parties as to the valuation date. Such an agreed bifurcation should also include some clarification as to how the issue of interim attorneys’ fees would be adjudicated which is different in pre-decree versus post-decree cases.

As the Awan case states, a bifurcated judgment should not be viewed as a solution to appease clients who are anxious to end a marriage in order to advance other significant business or personal endeavors; nor should a bifurcated judgment proceeding be used as a means to put a difficult dissolution on the back burner to be addressed on another day. Ultimately, the bifurcated approach may in the short term relieve personal stress of the parties but may ultimately create much more difficult issues for the trial judge when resolving property issues at a contested hearing well into the future.