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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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How Cohabitation Can Affect Spousal MaintenanceSpousal maintenance payments established in a divorce agreement are terminated if the recipient party remarries. There is no argument that the remarried party has a new source of income and no longer needs their former spouse to pay for their living expenses. A court may also terminate maintenance if the recipient is in a de facto marriage, meaning that the couple is not legally married but behaves as if they are. The spousal maintenance payor is responsible for proving that a de facto marriage exists and that maintenance payments are no longer appropriate.

Proving a De Facto Marriage

There is a difference between an intimate relationship and a de facto marriage. Illinois courts look for several signs that a relationship is behaving like a marriage, such as a couple:

  • Living together;
  • Having a long-standing relationship;
  • Sharing financial accounts and expenses;
  • Spending holidays and vacations together; and
  • Acting like co-parents to the children.

A court will need proof of several factors in order to conclude that a de facto marriage exists. Cohabitation is important evidence but may not be enough on its own.

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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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Financial Concerns When Going Through a Gray DivorceGray divorce, which refers to divorcees who are older than 50, has a different focus during negotiations than a younger divorce. The children in a gray divorce are likely no longer dependents or close to that age, which means that the allocation of parental responsibilities and child support may not even be an issue. However, the financial aspects of the divorce may be more complicated because of the duration of the marriage and divorcees’ stage in their lives. Financial viability after a gray divorce is more important than normal because the divorcees will have fewer opportunities to make up for lost assets.

Marital Properties

Gray divorcees have often collected numerous and valuable properties during their marriage, which they now must divide. The most valuable and vital properties for gray divorcees may be their retirement plans because it is the money they are counting on to support them for the rest of their lives. Most retirement plans are considered marital properties, including:

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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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When Can Spousal Maintenance Be Modified?Absent any language stating otherwise, the terms of a spousal maintenance agreement are modifiable when either party has a significant change of circumstances. Examples include a change in:

  • Employment status;
  • Income;
  • Marital status;
  • Tax implications of the agreement; or
  • The value of properties awarded after divorce.

An Illinois court will award modifiable spousal maintenance if the spouses cannot agree to terms during the divorce negotiations. However, divorcing couples can present other forms of maintenance agreements that have different conditions for when the agreement may be modified.

Reviewable Maintenance

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Reasons Your Prenuptial Agreement May Need an UpdateCreating a prenuptial agreement is helpful in settling financial issues that will come up during a divorce. The agreement lays out a plan for how premarital properties will be treated and what level of spousal maintenance will be provided. However, spouses should consider it a living document that may need to be updated. Financial circumstances in the marriage can change in ways that make the agreement obsolete or unfair to one party. It will be easier for both parties to renegotiate the prenuptial agreement while still married than during the divorce.

Spousal Maintenance

Parties in a prenuptial agreement may choose to establish the value and duration of spousal support payments after divorce, especially when one party has a significantly greater income than the other. However, the balance of financial power can change in a marriage: 

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Postponing Divorce To Save Money Not Worth ItGetting a divorce can hurt you financially as much as it does emotionally. As part of the divorce negotiations, you will need to surrender several marital properties and other monetary assets. Afterwards, you will be left with fewer resources but many of the same financial obligations. Knowing the monetary consequences, some spouses choose to delay their divorce. By doing so, they may hope to:

  • Accumulate greater financial assets to support themselves after divorce;
  • Continue to take advantage of their marital status when filing taxes; or
  • Repair their marriage so as to avoid divorce.

While there are some potential advantages to delaying your divorce, the disadvantages are often greater. There are several reasons why postponing a divorce hurts spouses more than it helps them:

  1. Reconciliation Is Unlikely: Once you have concluded that you want to divorce, you have reached a point of virtually no return. In many cases, divorce is the correct decision, even if it is difficult to admit. You have accepted that your marriage is beyond repair, which can be the biggest obstacle to deciding to divorce.
  2. Resentment Grows: Instead of reconciling, you are more likely to become bitter if you force yourself to stay with your spouse. When you reach the breaking point, you and your spouse may have a high conflict divorce. Such divorces are more costly because they take longer to negotiate.
  3. Marriage Duration Matters: The longer your marriage lasts, the more financial obligation you may have to your spouse. If you are likely to pay spousal maintenance after the divorce, the duration of your marriage will determine how long you must continue to make the payments. In Illinois, the duration of spousal maintenance is calculated using a multiplier. The multiplier increases every five years. If your marriage reaches 20 years, the payments may be permanent.
  4. More to Share: Besides your regular income, you may potentially receive a sudden gift that increases your financial assets. An inheritance from a relative is the most common example. Receiving an inheritance while married is significantly different from receiving it while divorced. The gift may be considered marital property that must be accounted for during the divorce negotiation. Even if it is non-marital property, your individual financial resources are used when calculating support payments.

Inevitable Divorce

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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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Getting Divorced After a Short MarriageAfter their actual honeymoon, newly married couples typically go through an extended honeymoon period, when the excitement and happiness of marriage outweighs any negatives. Researchers estimate that the honeymoon period typically wears off after three to five years, when stresses test the strength of a marriage. Some marriages do not survive the test, as studies in the U.S. show that approximately 20 percent of first marriages and 31 percent of second marriages end within five years. In rare cases, a couple may not need even a year to realize they made a mistake. Settling a divorce after a short marriage involves many of the same issues as longer marriages, but the duration of the marriage may affect how the issues are decided.

Division of Property

Illinois requires divorcing spouses to equitably divide their marital property, but a court is allowed to consider the duration of the marriage when determining the division. Courts will generally put greater importance on fairly dividing property in cases involving longer marriages, though there is no official number of years that are required for a longer marriage. For short marriages, it is also important to distinguish between marital and non-marital property. Spouses who have not been married for long are less likely to have accumulated shared assets, including:

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Handling Your Life Insurance During a DivorceGetting divorced in Illinois does not automatically kill your former spouse’s right to benefits from your life insurance policy. You can agree to give your former spouse some benefits in case of your death or choose someone else as your primary beneficiary. If you are responsible for spousal maintenance or child support payments, your former spouse can receive life insurance benefits as compensation for the payments he or she will no longer receive from you. Whatever your decision is, you must take specific action in order to change the division of your life insurance benefits after divorce.

Changing Your Policy

Under Illinois law, a divorce will automatically revoke some beneficiary designations, such as provisions in wills, trusts and power of attorney orders. If you do nothing to your life insurance policy, your former spouse may be entitled to the same benefits as when you were married. In order to change the beneficiary arrangement, you can:

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