Calabrese Associates, P.C.

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When Do Spousal Maintenance Payments End?Spousal maintenance, if awarded during a divorce, can last a couple of years to the rest of your life. The duration of your spousal maintenance will rely on several factors, such as:

  • How long you were married;
  • The financial means of the recipient; and
  • Whether you agree to an end-date in your divorce.

New circumstances can also allow the termination of spousal maintenance. Here are five ways that spousal maintenance payments can end:

  1. Automatic Termination: A court that awards spousal maintenance during a divorce has the discretion to determine whether it should be temporary or permanent. Illinois courts normally use the duration of the marriage to determine the duration of maintenance. A table shows how maintenance payments will continue for a period of time that is a percentage of how many years the spouses were married. For instance, maintenance payments will last for a time that is 20 percent of the duration of the marriage if the spouses were married for less than five years. The percentage increases for every two years that they were married. Divorcees who were married for 20 or more years often have permanent spousal maintenance.
  2. Negotiated Termination: Spouses can decide their own termination date for spousal maintenance if they can agree on the payments without needing the court to decide. They can reach this agreement during the divorce negotiations or as part of a prenuptial agreement. The maintenance recipient can also voluntarily terminate the payments as long as they were not coerced into doing so.
  3. Remarriage: Spousal maintenance payments automatically end if the recipient remarries or cohabitates with a partner in a relationship that is effectively a marriage. With cohabitation, you will need to prove that your former spouse is sharing their life and finances with their partner.
  4. Death: Spousal maintenance often ends if either party dies before it is scheduled to be terminated. However, a divorce agreement can stipulate that the payor’s life insurance will continue payments to the recipient after the payor's death.
  5. Change of Circumstances: The payor or recipient can petition to modify spousal maintenance if there has been a significant change of circumstances, such as an increase or decrease in income. In some situations, the court may discontinue the maintenance payments if they are no longer appropriate. These situations may include the recipient increasing their income so that it is equal to or greater than the payor’s income or the recipient not making a good-faith effort to become self-supporting.

Contact a DuPage County Divorce Attorney

Spousal maintenance has become more difficult to negotiate since the alimony tax deduction was eliminated this year. A Naperville, Illinois, divorce lawyer at Calabrese Associates, P.C., can help you, whether you would be the payor or recipient of maintenance. Schedule a consultation by calling 630-393-3111.

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Illinois Adjusts Spousal Maintenance Law Ahead of Tax ChangesIllinois recently passed a law that changes the formula and court instructions for calculating spousal maintenance as part of a divorce. The law goes into effect at the start of 2019, which is the same time that a federal tax law eliminating the alimony deduction goes into effect. Illinois is adjusting its spousal maintenance law because the tax law will put a greater burden on people paying maintenance. Since the new tax law was announced, lawyers have warned divorcees that it may become more difficult to reach a spousal maintenance agreement if the payor cannot use the alimony deduction. Illinois’ new law will try to make court decisions on spousal maintenance more equitable for both spouses.

Alimony Deduction

Any spousal maintenance agreements approved before the end of 2018 are still eligible for the alimony tax deduction, and payors under existing maintenance agreements can continue claiming the deduction until a change of circumstances requires them to modify the agreement. With the alimony deduction, payors can deduct the full value of their annual maintenance payments from their federal income taxes. Payees must report the maintenance that they receive as taxable income. When the deduction is eliminated, the payor will save less on his or her taxes, and the payee will not pay taxes on his or her maintenance.

Illinois’ Response

Divorcees may be less likely to reach a spousal maintenance agreement on their own because the alimony deduction was an incentive for the payor to agree to larger maintenance payments. Illinois’ new maintenance law tells the courts to consider the tax consequences for each party when deciding on spousal maintenance. It also changes the spousal maintenance formula so that the courts:

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Elimination of Alimony Deduction Gives Urgency to DivorcesNegotiating spousal maintenance agreements during divorce may become more contentious because of a change to a long-standing tax law. The federal tax reform bill passed in late 2017 eliminated the popular alimony deduction for federal income taxes. The deduction is an incentive for higher-income spouses to agree to pay spousal maintenance. With the uncertainty that the change has created, many divorcing couples are rushing to complete their agreements before the law goes into effect.

How It Works

The current tax law allows spousal maintenance payers to deduct the value of their annual payments from their total taxable income. The maintenance recipient must report the money as taxable income. The change to the law will make maintenance tax-neutral. The payer can no longer claim a deduction, and the recipient will no longer pay taxes on the payments. There are three caveats to the law that benefit those who want to continue using the alimony deduction:

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Former Husband Loses Appeal in Spousal Maintenance CaseAn Illinois appellate court recently denied a man’s petition to vacate an agreement that obligated him to pay $500,000 in spousal maintenance to his former wife. The man claims he signed the agreement under fraudulent circumstances because his former wife concealed significant financial assets. Previously, an Illinois trial court determined that the man’s claim had no standing and ordered him to pay the remainder of the maintenance agreement, as well as his former wife’s attorney fees.

Case Background

In 2006, the woman filed a petition of indirect civil contempt against the man for failing to comply with the spousal maintenance payments that they agreed to in their 2001 divorce. The woman claimed that the man was not remitting parts of his income that came from his social security benefits and various trusts. In 2009, the man agreed to pay the woman $500,000, which included paying $350,000 immediately and the remaining $150,000 by December 1, 2013. The man made the initial payment but later disputed the agreement and refused to pay the final $150,000. The man filed a petition to vacate the agreement shortly after the deadline passed for him to make the final payment. He claimed that the agreement is fraudulent because the woman failed to disclose during the negotiations that she had a bank account containing $500,000. The woman responded that the money was a loan from her son and the man was aware of the loan. The trial court sided with the woman in June 2016, leading to the appeal.

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