Divorce cases are inherently complicated. And this complexity can increase in high-asset/high-net-worth divorces. In such high-net-worth Illinois divorce cases, maintenance, formerly called alimony, often becomes a significant issue that the parties will have to work out or the Court will have to decide. Navigating this process can be overwhelming, but having the right attorneys to assist you can make all the difference.
Determining Spousal Support
In Illinois, the law uses a specific formula to determine the spousal support one spouse is to pay to the other. The amount of support is based on the incomes of each party. However, the law also states that if the couple’s combined income is over $500,000, the formula doesn’t have to be used to determine maintenance (aka, spousal support or alimony). This gives the court more flexibility and discretion in setting the maintenance amount but also requires the court to set maintenance based on the evaluation of the factors set forth in Section 750 ILCS 5/504 of the Illinois Marriage and Dissolution of Marriage Act.
Some of those factors include the following:
- The income and property of each party, both marital and non-marital
- Each party’s ability to earn income both currently and in the future
- The standard of living established during the marriage
- The needs of each party
- The duration of the marriage
- The age and health of each party
- All sources of income available to each party, including retirement assets
- Tax consequences to each party
- The effect of a parenting allocation arrangement on each party’s ability to obtain or maintain employment
What Factors Do Illinois Courts Consider When Determining Alimony in High-Asset Divorces?
In high-asset divorces, Illinois courts take into account various factors to determine appropriate alimony (spousal support). These include:
- Income and Property: The income and property of each party, both marital and non-marital, are evaluated. High-net-worth cases often involve substantial assets, which require detailed assessment.
- Standard of Living: The standard of living established during the marriage is a significant consideration. The goal is to ensure that both parties can maintain a lifestyle reasonably comparable to what they enjoyed during the marriage.
- Earning Capacity: Each party’s current and future earning capacity is assessed. This includes their education, training, skills, and employment opportunities. In high-asset divorces, one spouse may have sacrificed career opportunities to support the other’s career growth, which will be considered.
- Needs of Each Party: The financial needs of each party, considering the standard of living during the marriage, are examined. This includes ongoing living expenses, healthcare costs, and any other significant financial needs.
- Duration of Marriage: The length of the marriage plays a crucial role. Longer marriages typically result in longer or permanent alimony awards, especially in high-asset cases where one spouse may have been financially dependent on the other for a significant period.
- Age and Health: The age and physical and emotional health of both parties are important factors. Older spouses or those in poor health may receive higher or longer-duration alimony to ensure their well-being.
- Contributions to the Marriage: The court considers each spouse’s contributions to the marriage, including homemaking, child care, education, and career building of the other spouse. This is especially relevant in high-asset divorces where one spouse may have supported the other’s high-income career.
- Tax Consequences: The tax implications of alimony payments and property division are also considered. Proper planning can ensure that the financial arrangements are tax-efficient for both parties.
- Other Factors: The court may consider any other factors it deems just and equitable, such as the prenuptial agreements, previous agreements made by the spouses, and any other relevant financial considerations
High-asset divorces often involve complex financial landscapes, making it essential to work with experienced attorneys and financial experts to ensure a fair and equitable alimony arrangement
Addressing Maintenance Needs
In high-asset divorce cases in Illinois where maintenance is requested, it is important to ensure that the Court is aware of the needs of the spouse who is requesting the maintenance. Their need for maintenance will have to be balanced against the standard of living of the parties during the marriage. Further, an analysis of the other marital assets should be completed to create a financial plan for your maintenance negotiations.
Unique Financial Considerations in High-Asset Divorces <H2>
High-asset divorces involve complexities and evidence that normal cases do not. When negotiating maintenance and asset division in high-asset divorces, unique financial considerations must be addressed during maintenance and asset division negotiations. These considerations may include:
- Valuing a family business and determining who will be awarded the business;
- Hiring a forensic accountant to analyze bank and investment accounts and spending, especially when there might be an issue of hidden funds or assets, to determine the true value of the accounts;
- Determining the value of rental real estate and how to divide the properties between the spouses. Taxes should be considered when dividing real estate and how they will impact each party if awarded to them;
- Appraising and evaluating unique assets, such as an antique car collection, one-of-a-kind jewelry, or an artwork collection, and dividing them;
- Managing and dividing investment accounts, retirement accounts, and savings accounts, and sometimes using a forensic accountant to also determine their true value; and
- Determining the value of restricted stock units (RSU), both vested and unvested, and the tax consequences of both.
Professional Guidance
Consulting with financial experts, such as forensic accountants and financial planners, is vital for determining appropriate maintenance levels and understanding how awarded property impacts post-divorce financial stability.
Negotiation Strategies
When negotiating maintenance and asset division with your spouse, it’s important to come into the negotiations as knowledgeable as possible about your financial position. Remain respectful and calm and be willing to listen to your spouse’s proposals. Avoiding aggressive or argumentative tactics can facilitate more productive negotiations.
Consider all offers from your spouse regarding maintenance, and other property divisions, to determine their tax impact on you. Investigate the big picture thoroughly, focusing on long-term financial security rather than immediate gains.
Download Our ‘Messy Issues in High Asset Divorce’ Guide
Contact Us
If you are navigating a high-asset divorce and need expert guidance on maintenance negotiations, contact Anderson Boback & Marshall today for a consultation. Our experienced attorneys will help you achieve a fair and equitable settlement.
