In this article, we will be discussing Maintenance Modifications Due to Retirement and some of the most common questions surrounding maintenance modifications due to a payor retiring.
Spousal maintenance, formerly spousal alimony, is a statutory creation in Illinois. The Legislature has set forth the conditions and the calculations for how spousal maintenance is determined. This provision ensures that both parties can live in a fashion that they became accustomed to during the marriage. The statue will determine both the amount and the length of maintenance. Once the Court orders or the parties agree, maintenance stays in effect until the Court orders otherwise or a termination event occurs. However, maintenance in Illinois is not statutorily permanent.
Can Spousal Maintenance be Modified in Illinois?
If you are applying the statutory maintenance provisions, some mechanisms can allow for maintenance to be modified. The statute provides that maintenance can be considered for a modification upon a change in circumstances.
Does my Marital Settlement Agreement Control Modify Maintenance?
It can, but it depends on what is included in your Marital Settlement Agreement. The Marital Settlement Agreements are the Parties’ intentions. These agreements will control the maintenance obligations and provisions following the finalization of the divorce. The parties can specify whether maintenance is modifiable or nonmodifiable, the terminating events, and indicate what time of events can trigger a modification. All modifications will be contingent upon a change in circumstances. It is important to remember that if maintenance were agreed to be nonmodifiable, the Court would not be able to change that obligation.
What Is a Change in Circumstances?
A change in circumstances depends on your Marital Settlement Agreement and Divorce Judgment terms. Under the common statutory provisions and associated, a change in circumstances can be a significant involuntary income reduction of the payor, a contemplated income reduction of the payor, or an income increase for the payee. Other factors and changes are involved, but these are some of the most circumstantial changes. Essentially, the Court will be looking for a situation where the party’s situation has materially changed from their position during the marriage. This event was either involuntary and unforeseen or contemplated and planned for.
What Is an Uncontemplated Modification Event Vs. A Contemplated Modification Event?
An uncontemplated modification event is something that the parties were unaware of and could not anticipate at the time of divorce. Some examples of an uncontemplated change in circumstances are a job loss due to layoffs or an injury that reduces earning capacity. A contemplated modification event is a situation that the parties anticipated and adequately addressed in their Marital Settlement Agreement. An example of a contemplated modification event can be the payor's retirement or a planned career change.
Does Retiring Allow for a Maintenance Obligation to be Modified?
It might. Retiring is a common, natural, and anticipated event in every person’s life. It is also clearly going to lead to a fairly significant loss of income for the payor. Using the standard statutory assessment, retirement could be a basis for modification, even if your Marital Settlement Agreement does not expressly state retirement is a modification event if your Marital Settlement Agreement took time to balance retirement accounts and income evenly between the parties. It is important to remember that there are many factors to a modification proceeding. Having a qualifying event is only the first step. For more information read our article, How Are Retirement Accounts Divided in Illinois Divorce?
Does a Reduced Income Guarantee a Modification?
No, a reduction in income does not guarantee a maintenance modification. Even if there is a modification event, the Court can and will consider if there are additional means to continue paying a maintenance obligation. Suppose an asset pool is available that would allow for a maintenance obligation to continue. In that case, the Court can order that maintenance be paid for from those assets.
How Do I Modify Maintenance?
Procedurally, any party seeking to modify a maintenance obligation is required to file a petition to modify maintenance detailing because they are entitled to a modification and the basis for such a modification. After filing that petition, a hearing can be conducted, or the parties can reach an agreement related to any modification. Maintenance can be modified by agreement of the parties or by order of the Court following a hearing.
How is Maintenance Calculated?
Maintenance is calculated based on the incomes of the parties. Both spouses’ incomes are considered and balanced against each other to ensure that the higher-earning spouse retains roughly 60% of the marital income. These calculations are not limited solely to employment income. Instead, the calculation considers income from all sources, including stock dividends, annuities, 401k distributions, pensions, and rental incomes.
When Does The Modification Take Effect?
Maintenance modifications take effect upon the Court entering an order granting the modification. In most cases, the Court will enter an order modifying the obligation retroactive to the date of filing a motion to modify or from the date of the modification event, whichever happened last. So, if you file a motion to modify maintenance based on your upcoming retirement, but you do not retire until three months later, the Court will likely not use the filing date to determine retroactivity. Instead, they would likely use the date the retirement took place.
What Happens if I Do Not Get a Court Order to Modify a Maintenance Obligation?
You should never modify your maintenance payments outside of a court order. If you and your ex-spouse agree to enter a modification, it is imperative to enter an agreed court order to inform the Court of the new terms and the basis for that modification. If you start to make reduced or modified payments outside of Court, you incur colossal liability. The Court will enforce the terms of the last order that was entered. The Courts will generally not enforce any agreements made outside of the Court, regardless of whether the parties have a written agreement.
For help with your spousal maintenance a good place to start would be to meet with an experienced Illinois divorce attorney. Email or call us at (630) 324-6666 today, or use the link to schedule a consultation to discuss your case with an experienced Illinois attorney.
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