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Choose Your Maintenance Award Carefully

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Categorized as Illinois Divorce, Spousal Support

People know that alimony is now called maintenance. But few people understand what kind of maintenance is the best award for them. It is important for you to fully explore your individual circumstances to determine which maintenance award is in your best interest.

There are many kinds of maintenance. A “Maintenance in Gross” award is a set amount of money for a set period of time. It is considered a property settlement, so it cannot be modified. You might consider this type of an award if you planned on getting re-married in the near future. Since a maintenance award would typically terminate if you re-marry or co-habitat, this could be a wise choice of maintenance if you are already seriously involved with another person.

If you’ve been out of the workforce for a while, “Reviewable Maintenance” is something you should consider. The amount of money you would receive would be reviewed again by the court, typically in three years. The parties negotiate for different periods of time, so the three-year reviewability is only one scenario.

“Permanent Maintenance” typically occurs when you’ve been out of the workforce for a long time, or if you have been married a long time, or there isn’t a likelihood that you will be employed again. Long term marriages typically see a permanent maintenance award. Permanent maintenance awards can be reviewed, however, typically when there is a change in circumstance, such as your ex-spouse retiring. The courts would review the amount of money you receive and determine if your maintenance award would terminate, continue, or be modified in some way. This type of maintenance can also terminate if you were to marry or co-habitat with a person. So it’s important to know when you are structuring a settlement if you have some immediate plans to move in with someone.

“Rehabilitative maintenance” is awarded to a person for a fixed period, after which it terminates, thereby presumably allowing the recipient time to becomes “rehabilitated” and able to support oneself.

If you have children and will receive child support, but do not make much money from employment, you will likely be asked to consider an “unallocated maintenance” award, meaning that you would get child support and maintenance combined in the same payment. The person paying the maintenance is able to deduct the entire amount of the payment made to you, and you would pay taxes on that total amount. Taking an unallocated award puts more money in your pocket since the payor cannot deduct child support payments all by themselves. You will receive more money from them due to the tax advantage that they receive by deducting the whole payment made to you.

If you are the person paying the unallocated maintenance award however, make sure that you understand that this type of maintenance is always reviewable, even if the agreement you sign says it cannot be revisited. Child support is always modifiable, so any unallocated support amount is modifiable.

Divorces can take a long time. You might have been considering a re-marriage at the beginning of your case, but some people are considering it by the time it’s ready to finalize it. If you think there might be a chance of remarrying or moving in with someone, you might want to consider a maintenance in gross award. If you are just starting over in your career again, and need some time to figure out your financial future, a reviewable or rehabilitative maintenance award might be best, provided of course that you do not intend to re-marry or live with someone. Each case is different, so it is imperative that you carefully analyze your circumstances, and where you think your life is headed, prior to making a determination about what kind of maintenance you require.

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