People get paid all sorts of ways. Employees get paystubs, benefits, and per diem accounts. Employees even get paid for NOT working when they are paid for their accumulated vacation and sick days.
For an older employee in a job that allows vacation and sick day credits to be carried over year-over-year, those accumulated vacation and sick days can add up to a lot of money.
How will the money that will, eventually, be cashed in for those vacation and sick days be treated in an Illinois divorce?
How Are Vacation And Sick Days Divided In An Illinois Divorce?
“All the property of the parties to a marriage belongs to one of three estates, namely, the estate of the husband, the estate of the wife, or the marital estate.” IN RE MARRIAGE OF FOSTER AND FOSTER, Ill: Appellate Court, 1st Dist., 6th Div. 2014
“The court shall make specific factual findings as to its classification of assets as marital or non-marital property” 750 ILCS 5/503(a)
“For purposes of distribution of property, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage is presumed marital property.” 750 ILCS 5/503(b)(1)
Under the bare logic of the Illinois Marriage and Dissolution of Marriage Act, vacation and sick days which are accumulated after the marriage and before the divorce is entered are marital property and, thus, divisible in an Illinois divorce.
Illinois case law, however, disagrees.
“[Vacation and sick days] were a benefit to the intact marital estate because they provided a safety net. They continue to be a benefit and a safeguard to both[spouses]. It is true they will have a cash value if they remain unused when the employee retires. It may be possible to calculate the present cash value for the days assuming they remain unused when [the working spouse[ retires. But the question is not whether it would be possible to calculate their value — the question is whether such accumulated days are property and thus marital property under the statutory definition.
Sick days and vacation days are alternative wages meant to be paid when the wage earner is unable to work or decides to take a vacation. In the case of a married couple, the wage earner who is ill or who vacations still contributes wages to the marital estate via this alternative. This is a job benefit with value because it helps protect the marital estate. When a marriage is dissolved, a wage earner who is ill or vacations is still able to pay child support, maintenance, educational expenses for children, and remaining marital debt because he or she has employment that provides sick and vacation days. [The working spouse] cannot assign or transfer his sick or vacation days to another person. He cannot realize any cash benefit from them today other than by resigning or retiring from his employment. Accumulated sick-leave and vacation days are not marital property.” In re Marriage of Abrell, 923 NE 2d 791 – Ill: Supreme Court 2010 (quotations omitted)
Per the Illinois supreme court, vacation days and sick days cannot be transferred. So, vacation and sick days are not a proper marital asset which can be divided upon divorce.
Furthermore, the value of vacation and sick days cannot be adequately determined for the purposes of division pursuant to an Illinois divorce decree.
“Property that cannot be given a value because of its speculative or contingent nature in the future is not considered marital property subject to division.” IN RE MARRIAGE OF COVIELLO, 65 NE 3d 565 – Ill: Appellate Court, 1st Dist., 4th Div. 2016
This logic may be a little fuzzy. Vacation and sick days still have some kind of value that was accumulated during the marriage whether that value can be determined or transferred. But, Illinois divorce courts can do what they want to…so long as it’s fair and equitable.
Even if a “benefit was marital property, [the failure to divide that benefit will be deemed fair] as long as the division of assets was equitable when considering the overall circumstances of this case” IN RE MARRIAGE OF COVIELLO, 65 NE 3d 565 – Ill: Appellate Court, 1st Dist., 4th Div. 2016
Vacation And Sick Days When Calculating Maintenance and/or Child Support
Child support and maintenance in Illinois are determined by the net income of both parties. In order to calculate the net income of either party, the courts consider the gross income of each party. ”[G]ross income” means the total of all income from all sources” 750 ILCS 5/505(a)(2)(A)
The paychecks the working spouse receives even though they are at home sick or away on vacation, will be considered as income when calculating child support and/or maintenance.
“When a marriage is dissolved, a wage earner who is ill or vacations is still able to pay child support, maintenance, educational expenses for children, and remaining marital debt because he or she has employment that provides sick and vacation days.” In re Marriage of Abrell, 923 NE 2d 791 – Ill: Supreme Court 2010 (quotations omitted)
Vacation And Sick Days And Retirement
Vacation and sick days usually become an issue when a divorcing employee has accumulated enough vacation and sick days throughout the years that the divorcing employee can retire early while still collecting checks for those unused vacation and sick days even though the divorcing employee officially no longer works.
In this case, the vacation and sick days are no longer speculative per In Re Marriage of Abrell and therefore the income from vacation and sick days may be divided.
Income and assets sometimes require a distinction. If an asset is distributed between both parties, is the income that distributed asset derived from still be counted for the purposes of child support and/or maintenance?
Yes, the income that created a distributable asset can be used for the purposes of calculating child support and/or maintenance so long as the income has not already been counted for a previous child support or maintenance obligation.
“[T]o avoid double counting, the liquidation of an asset awarded in a marriage dissolution judgment is not income if the asset has been previously imputed to the party for maintenance and support purposes.” Marriage of Dahm-Schell v. Schell, 2021 IL 126802 – Ill: Supreme Court 2021
Any other result would be absurd. Almost all assets are the result of saved incomes. Either no asset would be divisible or no income could be counted if a strict “no double-counting” rule existed.
Getting a fair divorce settlement in Illinois requires knowing rules about the many characterizations of assets and income of both spouses. If you need to learn more about what will happen to you or your spouse’s assets and income, contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce attorney.