Setting of a Support Obligation
Published in Chicago Lawyer Magazine, June 2011
By Daniel R. Stefani
Over the last few years, I have seen a higher frequency of divorce cases where the family’s historic breadwinner is unemployed — some by choice, but others who were victims of the economic downturn. The lucky ones received a severance package. The unlucky ones are forced to live off their assets until a new employment opportunity comes their way.
During the pendency of a divorce, oftentimes the spouse of the unemployed person is then essentially forced to use some of their would-be property allocation in the divorce to support the family. However, the law provides for certain protection to alimony and child- support recipients. Specifically, courts have the authority to compel parties to pay spousal and child support at a level commensurate with their earning potential, not necessarily what they are actually earning. To do this, the court imputes a certain income level to the payor spouse based on his or her past employment income. For the setting of a support obligation, the court must find either that (1) the payor is voluntarily unemployed; (2) the payor is attempting to evade a support obligation; or (3) the payor has unreasonably failed to take advantage of an employment opportunity.
Thus, the imputation of income is not just limited to situations where a spouse “divorce plans” by voluntarily quitting work on the eve of or during the pendency of a divorce or is working but far below his or her earning potential. Even when the payor spouse is terminated through no fault of his or her own, that spouse must then show efforts at obtaining new employment. See In Re Marriage of Deike, 381 Ill.App.3d 620, 887 N.E.2d 628, 320 Ill.Dec. 484 (the court imputed income to a payor spouse who was let go from his job with a severance package and thereafter chose to invest in a bar and grill after applying for 25 to 30 jobs in his field of engineering).
Courts have also imputed income to payor spouses even when their new employment is in their chosen field. See In Re Marriage of Sweet, 316 Ill.App.3d 101, 249 Ill.Dec. 212, 735 N.E.2d 1037 (Ill.App.2 Dist.). In Sweet, payor spouse left his job as an exterminator to start his own exterminating business. He earned far less from his own business. The court concluded that if a payor spouse is not making a good faith effort to earn sufficient income, the court may set or continue that party’s support obligation at a higher level appropriate to the party’s skills and experience, as the interests of the payee spouse and children sometimes take precedence.
In March 2011, the 3rd District Appellate Court rendered the decision of In Re Marriage of Lichtenauer, 2011 WL 904285 (Ill.App.3 Dist.). In Lichtenauer, the appellate court affirmed a judgment for permanent maintenance for the payee spouse based upon an imputation of income to the payor. In Lichtenauer , the payor spouse sold his businesses during the pendency of the dissolution of marriage proceedings and became an employee of a similar business at a much lower income level. The payor’s live-in girlfriend was the president and major shareholder of the new entity and the payor spouse was simply an employee. The payor’s live-in girlfriend also received a salary of more than $120,000 a year despite having no previous corporate executive experience or qualifications for the position. The court found circumstances surrounding the structure of this new entity were a “contrived” arrangement. The court further analyzed the circumstances and applied each of the three factors warranting the imputation of income. The first factor did not apply, as the payor was employed. However, the court found that the second factor was present and specifically that the payor was attempting to evade a support obligation based on the “contrived” structure of the new entity and the salary paid to his live-in girlfriend as president of said entity. The court also found the third factor to be present given that the payor passed up an opportunity to have his girlfriend’s position as president of the company, earning more than $120,000 a year. As a result, the court awarded maintenance after imputing $120,000 of his girlfriend’s annual salary to the payor.
All of the reported cases deal with the imputation of income upon the dissolution of the parties’ marriage or in some post-decree proceedings such as a request for reduction or increase in support. There are no cases that deal with how a trial court can fairly compensate a payee spouse when assets are used during the pendency of a case to support the family. The payee spouse is essentially short-changed because assets that would have been allocated to them are now gone as the family is using said assets to pay their living expenses. In such cases, the payee spouse should immediately upon filing for dissolution of marriage, file a petition or temporary maintenance and child support asking the court for a temporary support order that imputes income to the payor spouse. Such request should also ask the court that any payments from the parties’ assets be deemed an advance against the payor spouse’s share of the marital estate. The court may at any ultimate trial re-allocate such amounts paid in certain cases to account for the payee spouse’s obligation to contribute to their own support and/or the support of the minor children.