Non-modifiable alimony in Illinois

Russell Knight

Russell D. Knight has been practicing family law as a Chicago divorce lawyer since 2006. Russell D. Knight amicably resolves tough cases while remaining a strong advocate for his client’s interests.

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What is Non-Modifiable Maintenance In An Illinois Divorce?

Non-modifiable alimony in Illinois

Maintenance (formerly known as alimony) is the manner in which Illinois divorce courts assure both parties to a divorce that they will be able to maintain their lifestyles post-divorce until they are able to “get back on their feet.” Illinois divorce law doesn’t have a “needs test” like in many other states. Instead, Illinois calculates both parties’ incomes and the length of the marriage to determine how much maintenance one party needs for how long.

But, this guidelines formula is only required if the parties can’t agree during mediation and negotiations.

Most spouses make their own maintenance arrangements. Typically, men will trade current assets for a reduction or elimination of alimony. In my experience, men always think their best years are ahead of them. Women are, usually, more sensible and realize that a “bird in the hand is worth two in the bush” and will take current assets in lieu of future promises.

Flimsy promises of future maintenance aren’t worth much…especially when you don’t trust the promisor. So, sometimes it’s necessary to lock in the maintenance with a non-modifiable maintenance agreement.

Calculating Maintenance In An Illinois Divorce

Before any non-modifiable agreement is made, both parties need to know what maintenance would be if the court just followed the law without an agreement by the parties.

The Illinois maintenance calculation is not too complicated. “The amount of maintenance…shall be calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income. The amount calculated as maintenance, however, when added to the net income of the payee, shall not result in the payee receiving an amount that is in excess of 40% of the combined net income of the parties.” 750 ILCS 5/504(b-1)(A)

The only thing to argue over is “what is net income” as gross dollars spent on business activities or other deductible items would reduce either parties’ net incomes. 92% of Americans are not self-employed so that is not an issue for the vase number of divorcing couples.

The length of the maintenance is based on the length of the marriage (or at least up to the date of filing of the Petition For Dissolution of Marriage)

“The duration of [a maintenance] award…shall be calculated by multiplying the length of the marriage at the time the action was commenced by whichever of the following factors applies: less than 5 years (.20); 5 years or more but less than 6 years (.24); 6 years or more but less than 7 years (.28); 7 years or more but less than 8 years (.32); 8 years or more but less than 9 years (.36); 9 years or more but less than 10 years (.40); 10 years or more but less than 11 years (.44); 11 years or more but less than 12 years (.48); 12 years or more but less than 13 years (.52); 13 years or more but less than 14 years (.56); 14 years or more but less than 15 years (.60); 15 years or more but less than 16 years (.64); 16 years or more but less than 17 years (.68); 17 years or more but less than 18 years (.72); 18 years or more but less than 19 years (.76); 19 years or more but less than 20 years (.80). For a marriage of 20 or more years, the court, in its discretion, shall order maintenance for a period equal to the length of the marriage or for an indefinite term.” 750 ILCS 5/504(b-1)(B)

Why would anyone ever take less maintenance than what the court would order? There’s a very good reason to accept less maintenance…if you can guarantee the maintenance payments no matter what.

A regular maintenance payment can be modified under the Illinois statutes at any time under the right circumstances.

“An order for maintenance may be modified or terminated only upon a showing of a substantial change in circumstances….In all such proceedings, as well as in proceedings in which maintenance is being reviewed, the court shall consider the applicable factors set forth in subsection (a) of Section 504 and the following factors:

(1) any change in the employment status of either party and whether the change has been made in good faith;

(2) the efforts, if any, made by the party receiving maintenance to become self-supporting, and the reasonableness of the efforts where they are appropriate;

(3) any impairment of the present and future earning capacity of either party;

(4) the tax consequences of the maintenance payments upon the respective economic circumstances of the parties;

(5) the duration of the maintenance payments previously paid (and remaining to be paid) relative to the length of the marriage;

(6) the property, including retirement benefits, awarded to each party under the judgment of dissolution of marriage, judgment of legal separation, or judgment of declaration of invalidity of marriage and the present status of the property;

(7) the increase or decrease in each party’s income since the prior judgment or order from which a review, modification, or termination is being sought;

(8) the property acquired and currently owned by each party after the entry of the judgment of dissolution of marriage, judgment of legal separation, or judgment of declaration of invalidity of marriage;  and

(9) any other factor that the court expressly finds to be just and equitable.” 750 ILCS 5/510(a-5)

That’s 9 reasons the court can modify a maintenance amount or term.  That’s a lot of reasons…and the 9th one is literally “any other” reason the court thinks is fair.

Every maintenance award gets modified sooner or later. The longer the duration of the maintenance award, the more likely it will be modified. The maintenance payor is completely motivated to put themselves in a situation where they would qualify under one of the nine available factors the court can consider.

So how do you guarantee the maintenance once party is owed?

Marital Assets In Lieu Of Maintenance

Most divorcing parties who wish to agree to deviate from the Illinois maintenance guidelines decide to trade assets for expected maintenance.

The Marital Settlement Agreement can direct one party to receive a marital asset “in lieu of maintenance” as a way to memorialize that that the parties are deviating from the guidelines and why.

This ends up being a great deal for the person who would have paid maintenance under the post-2018 tax laws. Maintenance is taxable to the payor of maintenance.

So, if you’re the maintenance receiver, you’ll want to ask for more assets in light of that reality.  

Transfers of assets even when in lieu of maintenance are tax free to both parties

“No gain or loss shall be recognized on a transfer of property from an individual to …

a former spouse, but only if the transfer is incident to the divorce.” 26 U.S.C. Sec. 1401(a)(2)

The unequal allocation of assets in lieu of a alimony for most people end up being the marital home or a portion of a 401(k). Marital homes usually are free of capital gains taxes on the increase in value while deferred compensation accounts still need to have the original income taxes paid against them (along with the possibility of early withdrawal penalties). All of these possible modifications to the assets value should be considered before accepting or giving the asset in exchange for waiving alimony.

Property division is done once and can never be revisited in the future. “Property provisions of an agreement are never modifiable.” 750 ILCS 5/502(f)

Some people, even high earners, don’t have any assets, though. They live check to check. In this case, their only asset is their future income which can only be tapped into via maintenance.

Non-Modifiable Maintenance In Illinois

For the maintenance receiver who cannot ask for assets in lieu of maintenance and cannot truly be sure they’ll be paid maintenance in the future, there is only one way to secure the maintenance award: agree with the maintenance payor that the maintenance shall be non-modifiable.

“The parties may provide that maintenance is non-modifiable in amount, duration, or both. If the parties do not provide that maintenance is non-modifiable in amount, duration, or both, then those terms are modifiable upon a substantial change of circumstances….The judgment may expressly preclude or limit modification of other terms set forth in the judgment if the agreement so provides.Otherwise, terms of an agreement set forth in the judgment are automatically modified by modification of the judgment.” 750 ILCS 5/502(f)

Typically, “[u]nder Illinois law, all maintenance awards are reviewable.” In re Marriage of Kasprzyk, 2019 IL App (4th) 170838. However, the Illinois statute allows the parties to lock in maintenance if they agree on any terms they agree to. An agreed maintenance order can be for any amount and any length of time the parties agree to.

“In other words, the maintenance provision allowed the parties to make maintenance as a whole nonmodifiable or to select a single aspect of the obligation to make nonmodifiable. If the parties did not agree that maintenance was nonmodifiable, either in whole or in part, then maintenance was modifiable upon a substantial change of circumstances” In re Marriage of Dynako, 2020 IL App (1st) 192116

Non-modifiable maintenance often occurs right before the maintenance payor’s expected retirement. This way there is no need to a return to court for modification.

Because non-modifiable maintenance is often ordered in consideration of the payor’s age, the payee should insist that the payor secure a life insurance policy to guarantee that maintenance payment.

So, if an agreement is non-modifiable as to maintenance, that maintenance must always be paid.

Sadly, this is not a guarantee that the maintenance will always be paid. Rather, it is merely a guarantee that the maintenance will never be modified.

If the maintenance payor cannot pay, their obligation remains but there may be no effective penalty for their failure to pay if they can prove “that the violation was not willful and contumacious and that he or she had a valid excuse for failing to follow the order.” In re Marriage of Knoll, 2016 IL App (1st) 152494, ¶ 50, 65 N.E.3d 878.

Determining the right amount of non-modifiable maintenance is an art not a science. Non-modifiable maintenance should definitely be less than guidelines maintenance but by how much? The maintenance payor’s risk of modification is probably the variable.

But, a clever maintenance payor would probably not reveal their capacity for modification as they could simply invoke it after the divorce in a guidelines maintenance case.

So, the exchange of information necessary to arrive at a satisfactory non-modifiable maintenance amount depends on how much the payee trusts the payor. But, if the payee trusted the payor, they wouldn’t need non-modifiable maintenance, they could rely on the payor to pay guidelines.

Non-modifiable maintenance is a minefield in a divorce case. If it’s an option in your divorce, be sure to talk with an experienced Illinois divorce attorney. Contact my Chicago, Illinois family law firm to schedule a free consultation.