Most people’s divorces are quite financially, simple. The house gets sold, the proceeds divided, the 401ks and retirement accounts get QDRO’d, child support and alimony get calculated pursuant to the statute.
Wealthy people’s divorces get a lot more complicated. The assets are usually more interesting: small businesses, stock options, dividends and jewelry. When it comes to dividing assets, a wealthy person’s divorce is a dissection of their achievements.
What makes a wealthy person’s divorce complicated is their expenses. Some wealthy people spend money on things that the average person is not familiar with: boats that are liabilities but create a net tax benefit after depreciation, art that hangs in their houses yet has been deeded away, and country club memberships.
Even Cook County circuit court judges and associate judges with salaries of $207,291 and $196,926, respectively, cannot relate to the quasi-assets that the wealthy own.
Because of these complications, the wealthy are even more inclined to settle their cases via creative negotiations. So, understanding the assets/liabilities of the wealthy is not as important as knowing how to leverage those strange assets in an Illinois divorce’s negotiations.
Country Club Memberships And Divorce
A country club is a social club tied to a property, usually a golf course, that provides a social atmosphere for its members. In the city of Chicago, there are several social clubs that serve a similar function through a building that includes a gym, ball room, social activities, etc.
Membership into a country club is usually exclusive. New members have to be admitted via a vote. After the new member is invited to join the country club, they are asked to pay an initiation fee. The fee to join the Chicago-area Medina Country Club is at least $ 85,000, for example.
These initiation fees are typically not-refundable and do not buy equity in the club (otherwise they couldn’t kick people out).
After payment of the club’s initiation fee, the member has to pay annual dues.
A country club membership cannot be sold to another incoming member.
A country club membership, typically, also includes membership for the member’s spouse and immediate family.
So, when a country club member divorces, remarries or has a new child, that new family member gets an automatic membership.
So, what is a country club membership? An asset or a liability? A country club membership is neither but that doesn’t mean it can’t be negotiated in an Illinois divorce.
Who Gets To Keep The Country Club Membership In An Illinois Divorce?
The terms and conditions of the country club’s membership will govern who is allowed to maintain membership in the club.
If the country club rules allow both parties to maintain membership after a divorce, then it will be be up to both parties to decide to continue their membership or not.
If the rules only allow the original member to maintain the membership, then that is what will happen.
A divorce court has jurisdiction over the parties but does not have jurisdiction over the country club. The court can tell the parties what to do but the court cannot tell the country club what to do. So, use the court’s jurisdiction over the other party to get what you want.
How To Leverage A Country Club Membership
If you are the country club member and you intend to maintain your country club membership it is not necessary to list your membership as an asset on your financial affidavit. In fact, under 13.c of the standard Illinois Financial Affidavit, country club membership fees are a standard expense.
Any questions regarding the utility of the country club should be met with “it’s where I do business.” A country club membership is a legitimate expense.
If you are the spouse of a country club member and you are divorcing, you have a lot of leverage. If the country club membership is not an asset, then what did they buy with all that marital money? If the membership cannot be divided or even transferred spouse-to-spouse during the divorce isn’t the money spent on a country club membership per se dissipation of marital assets?
“Dissipation is defined as the use of marital property for one spouse’s benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown” In Re Marriage of Tietz, 605 NE 2d 670 Ill Appellate Court, 4th Dist. 1992.
A finding of dissipation in an Illinois divorce case requires a return of the non-dissipating spouse’s share marital money which was dissipated.
But, a reimbursement of an initiation fee would not make the non-member spouse whole. The non-member spouse still wouldn’t have access to the country club while the member spouse would remain a member (and likely block their ex-spouse’s membership). So, a non-member spouse could ask that the member spouse to sponsor the non-member and pay the non-member spouse’s initiation fee.
There is no established legal basis to force this sponsorship and membership purchase but an Illinois divorce court probably has the power to do so under the statute. A court may award “appropriate temporary relief including, in the discretion of the court, ordering the purchase or sale of assets” 750 5/501(a)(3)
The country club member spouse can always take their chances in front of an Illinois divorce judge and point out that buying a country club membership is preposterous at best and that “no dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation, but in no event prior to 5 years before the filing of the petition for dissolution of marriage;” 750 ILCS 503(d)(2)(iv) So, it’s probably too late to make a dissipation claim.
The point is when couples break up, each person takes certain friends with them. If either member of the couple uses the country club as their social life, they will be willing to pay a hefty price to keep that social life.
Modifying maintenance will be especially difficult for any maintenance payor who maintains a country club membership.
Before modifying maintenance a divorce court can consider “the property acquired and currently owned by each party after the entry of the judgment of dissolution of marriage” 750 ILCS 5/510(a-5)(8)
A country club membership’s expense will not be given priority by an Illinois divorce court over a party’s obligations to their former spouse.
Golf Club Bonds And Divorce In Illinois
Some golf clubs and other social clubs actually require the purchase of a bond which functions as a form of equity in the organization. It is often forgotten and treated as an initiation fee but it does have a value.
This is especially common for an old club that requires a massive refurbishing in order to maintain its membership ranks. The current members will be required to purchase bonds which allow the club to make improvements in the absence of fees. The hope is that new membership fees will pay the original members their money back.
There is no question that a bond is an asset with a particular value that must be divided in a divorce if deemed marital property.
Illinois divorce courts “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 5/503(d)
Gag Orders In An Illinois Divorce
If a married couple does rely on a country club for a portion of that couple’s social life (why else would you be in a country club? Otherwise, you’d just pay the green fees) then that couple will be the subject of gossip when they divorce.
It would be tempting to ask the court to require your spouse not to gossip or bad mouth you to your friends, acquaintances and former friends in the country club.
Having the government (a court) restrict speech is a big deal under the U.S. Constitution. While a prohibition against gossip or bad-mouthing isn’t punishing speech that happened, it’s definitely restraining speech that could happen.
“[A]ny prior restraint upon speech, while not unconstitutional per se, bears a heavy presumption against its validity.” In re A Minor, 127 Ill. 2d at 265.
Specifically, any court restriction on a type of speech, even as trivial as gossip, will be presumed invalid. “Content-based laws, which target speech based on its communicative content, are presumed to be invalid.” People v. Relerford, 2017 IL 121094
This constitutional protection of the freedom to gossip does not allow anyone to make defamatory statements about anyone. The constitutional free speech protection simply prevents the court from making orders that prevent a type of speech. “Respondent’s speech does not lose its protected status simply because it is distressing to the petitioner.” Flood v. Wilk, 2019 IL App (1st) 172792
False statements that materially hurt someone can create a tortious defamation action against the person that made the statement.
If the statement is true, however, the defamation action will fail. “One who publishes a defamatory statement of fact is not subject to liability for defamation if the statement is true” Wynne v. Loyola Univ. of Chicago, 741 NE 2d 669 – Ill: Appellate Court, 1st Dist., 4th Div. 2000
Does your Illinois divorce have an interesting asset or issue? If so, I’d love to discuss it. Contact my Chicago, Illinois family law firm to arrange for a free no-obligation consultation with an experienced Chicago divorce attorney.