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Is permanent forever?: Retirement and cancer weren’t enough to end maintenance

September 01, 2017
By Chicago Lawyer
Dan Stefani is a principal at Katz & Stefani. The firm’s practice is limited to family law matters. His work on behalf of mainly high net-worth clients, as well as spouses of high net-worth individuals, involves valuations of closely held corporations, partnerships and other entities, detailed analysis of complex financial transactions, child custody and support issues as well as paternity and domestic violence.

Hot off the press is In re the Former Marriage of Bernay, 2017 IL App (2d) 160583. The 2nd District opinion is a must read for any payor or potential payor of permanent maintenance. In some ways, this opinion redefines the long-standing definition of permanent maintenance as is understood in most divorce courts in Illinois.

After a 14-year marriage, the wife petitioned to dissolve the marriage. At the time, the children were still minors. At the time of the parties’ dissolution, the wife had graduated with an associate’s degree and was employed as a nurse. The husband earned an average of approximately $125,000 per year. The judgment for dissolution of marriage provided that the ex-husband would pay the ex-wife $4,150 per month in unallocated maintenance and child support, reviewable after 36 months. In 1999, at the review hearing, the ex-wife earned $28,000, and the ex-husband earned approximately $383,000. At the review hearing, the court increased the ex-wife’s unallocated maintenance and child support to $6,000 per month, reviewable after 60 months.

In 2004, the ex-wife petitioned for an extension of maintenance. In March 2006, the trial court ordered the ex-husband to pay permanent maintenance in the amount of $3,600 per month. At the March 2006 hearing, the trial court found that the ex-wife was in her 50s, earning $42,000 annually and had few assets. The court found that the ex-wife had made good-faith efforts toward financial independence but was employed at an income insufficient to provide for her own support consistent with that standard of living established during the marriage.

The court found that the ex-husband (who was also in his 50s) had substantial income and additional economic benefits from his new marriage. The ex-husband’s assets were approximately $2.5 million. The court found that the ex-husband had an increased ability to pay maintenance and that due to these parties’ grossly disparate earnings, the goal of the ex-wife becoming self-sufficient was never achievable.

Therefore, an award of permanent maintenance was warranted after the two prior reviews and nothing would be gained by adopting another review period. The award would terminate only upon either party’s death or upon the ex-wife’s remarriage or cohabitation. The ex-husband appealed and, in 2007, the appellate court issued a Rule 23 opinion affirming the order.

In 2014, after payment of 19 years of maintenance on a 14-year marriage, the ex-husband petitioned the trial court to terminate the ex-wife’s maintenance. The ex-husband (now in his 60s) based his petition to terminate on his imminent retirement date within the next year. He also had been diagnosed with lymphoma.

After a hearing, the trial court found that there had been a substantial change in circumstances due to the ex-husband’s illness, his reduced salary and his imminent retirement. The court also found that the ex-wife had failed to make reasonable efforts to become financially self-sufficient based on her only working part-time in recent years.

The ex-wife appealed. The appellate court reversed and reinstated the March 2006 trial court order awarding permanent maintenance.

Ignoring many of the other factors in the statute, the court stated that the party seeking to terminate maintenance was required to show that a substantial change in circumstances had occurred, namely, either the ex-wife’s financial needs had significantly decreased or the ex-husband was no longer able to pay. As it relates to the trial court’s main basis for terminating the maintenance, which was the ex-husband’s imminent retirement, the appellate court stated that it was not a substantial change because when the trial court awarded permanent maintenance in 2006, the parties were both in their mid-50s and that the ex-husband’s retirement was clearly contemplated when permanent maintenance was ordered.

Therefore, the ex-husband’s retirement could not be a substantial change despite no evidence cited from the 2006 transcript for that conclusion. Given this case, any litigant who is in their mid-50s and adjudicating maintenance should be aware of the implication that a reasonable retirement by them in his or her 60s may not be a basis for termination.

The court also found that his lymphoma diagnosis was not a substantial change in circumstances, as no evidence was offered that his condition would deplete his impact or deplete his financial resources.

The appellate court went further to state that the trial court’s finding that the ex-wife’s efforts to secure full-time employment were insufficient was in error in part because nothing in the 2006 order required the ex-wife to obtain full-time employment. This despite the specific language of the statute and case law on the subject.

Ultimately, the court reversed the termination and reinstated the 2006 order and remanded only for the court to calculate any arrearage that resulted from the 2014 termination order. It appears from this opinion that the ex-husband will be paying maintenance until the death of either party, the ex-wife’s remarriage or cohabitation. Also, perhaps he may obtain a termination if, as and when he depletes enough of his estate to prove that he is no longer able to pay maintenance.

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