New Spousal Support Financial Breakdown
Recent changes to Illinois legislation regarding spousal support will be making a huge impact on the finances of divorcing couples. Previously, the laws were relatively vague offering major discretion to judges on the “if’s and when’s” and how much spousal support should be paid and for how long.
Effective January 2015, more formal guidelines will allocate spousal support. The two main changes are as follows:
1. The amount of spousal support (1) shall be calculated by taking 30% of the payor’s gross income minus 20% of the payee’s gross income. The amount calculated as maintenance, however, when added to the gross income of the payee, may not result in the payee receiving an amount that is in excess of 40% of the combined gross income of the parties.
2. The duration of spousal support (1) shall be calculated by multiplying the length of the marriage by whichever of the following factors applies: 0-5 years (.20); 5-10 years (.40); 10-15 years (.60); or 15-20 years (.80). For a marriage of 20 or more years, the court, in its discretion, shall order either permanent spousal maintenance or maintenance for a period equal to the length of the marriage.
Let’s now apply the guidelines to a hypothetical scenario. If a couple has been married for 14 years, and their gross income is $220,000.00 (spouse A earns $180,000.00, and spouse B earns $40,000.00), the terms of the new spousal support laws will apply. When we apply the guidelines the result will be as follows:
Payor’s annual gross income: $180,000.00
30% of payor’s gross income: $ 54,000.00
Payee’s annual gross income: $40,000.00<
20% of payee’s gross income: $8,000.00
Annual maintenance $54,000.00 – $8,000.00 = $46,000.00
Combined gross income of the parties: $180,000.00 + $40,000.00 = $220,000.00
40% of combined gross income: $88,000.00
Maintenance ($46,000.00) +payee’s gross income ($40,000.00) = $86,000.00
Under this hypothetical since the spousal support amount and payee’s gross income are less than 40% of the parties’ combined gross incomes, under the new statute, annual maintenance payments of $46,000.00 would apply.
In order to determine how long spouse A must pay maintenance to spouse B, we apply the multipliers outlined of the statute. Marriages of 10-15 years have a multiplier of .6. So, a marriage of 14 years will result in maintenance for 14 x .6 years, or 8.4 years.
This new law will have a profound impact on spousal support for divorcing couples. It should be noted that the new law does not provide any further direction for a divorcing couple whose gross annual income is in excess of $250,000.00, or for high net worth couples. The question then becomes, are the guidelines a step forward? The answer is uncertain.
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