Articles Posted in retirement benefits

In Illinois, during a divorce, either party can ask the court to order the other party to pay some or all of his or her attorney fees while the case is pending.  Section 501(c-1) of the Illinois Marriage and Dissolution of Marriage Act provides in pre-judgment (pre-decree) divorce cases, the court can assess attorney fees in favor of the petitioning party and against the other party.  The purpose of these interim attorney fee awards is to “level the playing field” and allow an economically disadvantaged spouse to participate adequately in the litigation.  See, Marriage of Rosenbaum-Golden.  This may be necessary where one spouse uses his or her greater control of assets or income as a litigation tool, making it difficult for the disadvantaged spouse.

Pockets Inside Out

If the court decides that one party cannot pay his or her attorney fees but the other party can, it can order that the party able to contribute pay some attorney fees to the other party.  However, if the court determines that both parties do not have sufficient financial ability or access to funds with which to pay, the court will allocate available funds for each party’s attorneys, including any retainers or interim payments previously paid.

Continue reading

 

It is common for a child support payor to be required to pay a percentage of any additional income above and beyond a base percentage of his or her income.  This additional income may include, for example, bonuses, commissions, or work from side jobs.

Illinois courts define income as “something that comes in as an increment or addition… a gain… that is usually measured in money.”  They have held that income can include a lump-sum worker’s compensation award, military allowance, deferred compensation, and the proceeds from a pension.  Some Illinois courts have also included disbursements from an IRA as income for child support purposes.  In such cases, if the child support payor’s judgment requires him or her to pay 20% of any additional income earned as child support, and he or she withdraws $100,000 from an IRA, the child support payee would be entitled to $20,000 in child support.

ira child support

This is the rule that circuit courts in the Second Appellate District are required to follow.  In the case of Marriage of Lindman, the Second District Appellate Court has held that IRA disbursements constitute income for child support purposes even where the IRA was part of a property settlement.  In the case of Marriage of Eberhardt, the First Appellate District followed this precedent.  This rule seems quite unfair at first blush, because the child support payor did not necessarily “gain” anything in addition to what he or she already had, that is, basically a savings account with tax restrictions.

Continue reading

Divorce matters can be complicated, regardless of the employment status of the parties.  But when one or both of the spouses is a member of the military, several issues come into play.  This article will address health benefits, retirement pay available to spouses of military service members, and child support.

 

Real American Military Family

 

  1.  Military Benefits Available to Former Spouses:

In most divorces, upon the entry of a judgment for dissolution of marriage (a final divorce decree), a spouse is no longer eligible to be covered under the other spouse’s medical benefits.  However, for military divorces, there are special rules.

 

“20/20/15 Spouses”: A military member’s former spouse qualifies for medical benefits for a full year, beginning from the date of the divorce so long as all of these are true:

  • The parties were married for 20 years or more (from the date of marriage to the date of entry of a divorce decree or annulment),
  • The service member performed 20 years or more of military service which entitles him/her to retirement pay; and
  • There is a 15 year or more overlap of the marriage and military service.

 

If the 20/20/15 former military spouse has employer-sponsored medical insurance, he or she is not eligible for the one-year transitional care.  If that employer-provided plan is optional, the former spouse can opt out of that plan and choose to participate in the one-year military benefit pan.

Continue reading

Surprising as it may be, divorced people are entitled to receive benefits based upon their ex-spouse’s earning history as well as their own. Moreover, the benefit is based on the ex-spouse’s entire earnings history, not just earnings accrued during the time the couple was married.
Spousal benefits were introduced in an era when most women did not work outside the home and did not earn their own Social Security benefits. Today, women frequently earn more than their husbands, and have higher Social Security benefits as a result. However, because the spousal benefit is largely a relic of a bygone era, it is only fitting that my hypothetical example reflect that era. Consider the marriage of a couple named Mark and Angela, who were married for 30 years, and then got divorced. Mark is now 67. During the marriage, he was the breadwinner, and based upon his earnings, he has accrued Social Security retirement benefits. Angela is 66 and never worked outside the home. Her social security earnings history lists nothing but a series of zero’s over the years. Neither party has remarried.
If they had remained married, when Mark applies for Social Security benefits, the maximum amount of spousal benefits Angela could claim would be 50% of his monthly benefit – his “Primary Insurance Amount” (PIA) – once she reaches full retirement age. Now that they are divorced, she remains entitled to that same amount, provided that certain criteria are met. According to the Social Security Administration, those criteria are as follows:

Continue reading