2008 TRENDS IN MAINTENANCE
AWARDS IN ILLINOIS
By: Gunnar J. Gitlin
The Gitlin Law Firm, P.C., Woodstock, Illinois
A s a lawyer whose divorce practice is in McHenry County, Kane County and Lake County, Illinois, I have found that in these conservative counties it is often helpful for me to demonstrate to judges and lawyers alike that maintenance awards should not necessarily be based upon a rule of thumb but that there are certain trends that can be demonstrated by a comprehensive review of Illinois family law cases. The trend in Illinois divorce cases is toward permanent maintenance (alimony) in long term marriages. This trend is well illustrated by several cases, including the 1999 Marriage of Grundstein decision; the 2000, Marriage of Drury decision; and the 2002 Marriage of Keip decision. Perhaps the most striking is the 2008 First District's Heroy decision.
Grundstein, 304 Ill.App.3d 12, 237 Ill.Dec. 342, 709 N.E.2d 597, was a 21 year marriage case where the appellate court reversed the trial court's award of maintenance of $1,538 per month and directly awarded permanent maintenance of $4,800 per month. In Grundstein, the wife was 52 years of age, had a college degree in fine arts and her salary from his last employment was $22,0000.
Drury, 317 Ill.App.3d 201, 251 Ill.Dec. 284, 740 N.E.2d 365 (4th Dist. 2000), was a 29 year marriage case where the appellate court reversed the trial court's maintenance award in terms of length and the appellate court awarded permanent maintenance. The wife in Drury was earning $30,000 and husband was earning $77,000 and the appellate court ruled that the trial court erred in awarding maintenance for three years subject to review.
IRMO Keip, 5th District, No. 5-00-0341, (5th District, July 18, 2002), ruled that permanent maintenance should have been awarded in a twenty-two year marriage case with a significant income disparity and where other factors favored a long term award. In Keip, there were four children and two minor children with the husband earning a gross income of $98,000 and the wife earning a net income of $14,568. The appellate court ruled it was error to award maintenance for one year with no review. The appellate court required maintenance to be in the amount of 10% of the husband's net income (doubling the amount) and requiring the maintenance award to be permanent. The marital estate had a negative net worth.
IRMO Heroy, (1st Dist., September 17, 2008), serves as a primer in reviewing the life regarding maintenance in long term marriage cases with a significant lifestyle [$35,000 permanent maintenance award affirmed.] Of significance was the completing experts submitting reports and testifying as to lifestyle. The case overall is 53 pages in length with the discussion on maintenance in its various aspects summarizing the law.
The bookend to the Heroy decision is the recent Bratcher decision. IRMO Bratcher, No. 4-07-0621 (4th Dist., June 27, 2008) which is discussed below and illustrates that the trend toward generous permanent maintenance awards has its limits.
Discussion Statutory Law
Before 1977, in Illinois divorce cases, property was awarded in accordance with the way title was held regardless of whether it was acquired during the marriage. In October of 1977 the Illinois Marriage and Dissolution of Marriage of Act came into effect and with it came new concepts of awards of alimony (maintenance) and distribution of property. The significant change that was sought to be brought about by the IMDMA was to rely on property distribution as a means of sustaining the economically dependent spouse, rather than awards of alimony. As a result the prevalent form of maintenance awards was for a short period of time, with the maintenance award either to terminate at the end of a short period of time, or at the end of the fixed period of time, typically two or three years, with the maintenance to be reviewed by the court. This scheme, on its face, seemed desirable since divorce should sever all possible ties between the parties, and the dependent spouse should be more secure if the means of support belonged to the dependent spouse rather than the former spouse.
Section 504 is the maintenance statute of the Illinois Marriage and Dissolution of Marriage Act. The significant re-write to the maintenance section was in Public Act 87-881 (which became law effective January 1, 1993. The pre-1993 version of Section 504 stated that one qualified for maintenance if the person lacked sufficient property, including marital property apportioned to him, to provide for his reasonable needs. The other significant statutory amendments in the 1993 amendments included new or revised factor. There is a new factor factor (4):
any impairment of the present and future earning capacity of the party seeking maintenance due to that party devoting time to domestic duties or having foregone or delayed education, training, employment, or career opportunities due to the marriage
The amendments also added to factor (5) additional language to the appropriate education, training and employment factor. The additional language states that the court should consider, whether that party is able to support himself or herself through appropriate employment or is the custodian of a child making it appropriate that the custodian not seek. The final significant change is the 10th factor which considers the contributions and services by the party seeking maintenance to the education, training, career or career potential, or license of the other spouse.
Thus, prior to Public Act 87-881, the relevant factors of Section 504 were:
1)The financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently, including the extend to which a provision for support of a child living with the party includes a sum for that party as custodian; SEE CURRENT FACTORS 1 THROUGH 3.
2)The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment; SUBSTANTIAL REVISIONS.
3)The standard of living established during the marriage; SAME
4)The duration of the marriage; SAME
5)The age and the physical and emotional condition of both parties; SAME
6)the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance; and DELETED
7)the tax consequences of the property division upon the respective economic circumstances of the parties. SAME (Added via Public Act 82-556).
The current relevant factors in maintenance awards are:
(1) the income and property of each party, including marital property apportioned and non-marital property assigned to the party seeking maintenance;
(2) the needs of each party;
(3) the present and future earning capacity of each party; (factor added).
(4) any impairment of the present and future earning capacity of the party seeking maintenance due to that party devoting time to domestic duties or having foregone or delayed education, training, employment, or career opportunities due to the marriage; (factor added.)
(5) the time necessary to enable the party seeking maintenance to acquire appropriate education, training, and employment, [previously was to acquire sufficient education and training to find appropriate employment] / and whether that party is able to support himself or herself through appropriate employment or is the custodian of a child making it appropriate that the custodian not seek employment; (underlined portion added.)
(6) the standard of living established during the marriage; - SAME
(7) the duration of the marriage; - SAME
(8) the age and the physical and emotional condition of both parties; - SAME
(9) the tax consequences of the property division upon the respective economic circumstances of the parties; - SAME
(10) contributions and services by the party seeking maintenance to the education, training, career or career potential, or license of the other spouse; NEW - 1993
(11) any valid agreement of the parties; and
(12) any other factor that the court expressly finds to be just and equitable. Added.
In 1993 Section 504 was amended with the lack sufficient property portion being omitted. The amendment suggested the philosophic acceptance of the fact that in many cases distribution of marital property will not result in the generation of sufficient income to adequately support a needful spouse. The other 1993 amendments provide the spouse seeking maintenance more statutory ammunition in urging a longer or larger award of maintenance.
What is a Trend?
How do we measure trends in Illinois divorce law? Unfortunately there are no statistics kept on what happens at the trial court level. The only reliable statistic is what happens in the appellate courts. What we have examined, therefore, are the appellate court opinions on maintenance where we could determine certain factors, such as the duration of the marriage, the percentage of net income of the award, etc.
Significant maintenance cases decided since the passage of the IMDMA and especially virtually all of the significant cases since 1987 are reported herein in the charts in alphabetical order.
If you look at the cases on a year-to-year basis keep in mind that in 1994 the Illinois Supreme Court amended Rule 23 to provide, effectively, that each appellate court district could publish only a certain number of opinions and the rest of the decisions would have to be disposed of under Rule 23. Effectively it cut the published opinions in family law in about half.
Long Term Marriage Cases: There are 44 cases of more than 20 years in length analyzed with the newest including Drury (discussed above), Brackett, (involving a reversal of an award of rehabilitative maintenance the appellate court required permanency and a higher amount), and Grundstein (the appellate court reversed a permanent award as to amount and increased from $1,500 to $4,800 monthly).
Shorter Term Marriage Cases: There were 35 cases in which the marriages were of 20 years or less that are analyzed, with the most recent cases including Gattone (a remarkable case involving a three year marriage where the appellate court affirmed an award of maintenance of 40% of the husband's net income where the wife gave up her job to marry her husband and the husband had a sizeable non-marital estate) and Minear (Illinois Supreme Court case discussed below).
Permanent Maintenance -- The Research Project
Dates: Cases were taken from 1980 to the current date.
Courts: Illinois appellate courts and the Illinois Supreme Court.
Number of Cases in Research Body: 74
Elements of Case Reported in Spreadsheets:
A. Name of Case
B. Northeastern Report Citation
C. District of Case
D. Year if case
E. Gitlin on Reports No. for Research Purposes
F. Length of marriage.
G. Age of Payor
H. Age of Recipient
I. Party Appealing Maintenance Award
J. Issue Appealed from
K. Education of Maintenance Recipient (usually Wife)
L. Net Marital Estate in dollars - where known
M. Percentage of Marital Estate to Maintenance Recipient
N. Non-Marital property of Payor of Maintenance
O. Non-Marital Property of Recipient of Maintenance
P. Payor's Gross Income
Q. Payor's Net or Estimated Net Income;
R. Recipient's income.
S. Investment Income of Maintenance Recipient
T. Amount of maintenance awarded in terms of dollars and percentage of obligor's net income.
U. Total number of children
V. Total number of minor children
W. Maintenance award per month (either as result of appellate court remand or affirmation of trial court's award)
X. Maintenance as a Percentage of the Payor's Net Income
Y. Duration of maintenance, e.g. permanent, number of years etc.
Z. Whether the maintenance award is to be reviewed, or terminated after a certain time.
AA. Where significant rationale of court in relation to maintenance
Permanent Maintenance and
Discussion Re Long Term Marriage Cases.
Next, reviewing the cases I spotted a trend toward long term maintenance that commenced in the mid 1980s. Taking a somewhat arbitrary starting point, I used 1988 for the first year in which I analyzed permanent maintenance awards in long term marriages cases - which I defined as more than 20 years in length.
Those cases with the length in italics involve unique fact patterns. I did not include the Clabault case because the award was remanded both as to length and amount and it was not possible to assess the length of the maintenance award on remand. Kennedy was not included because this was an unallocated support and maintenance award and one in which there was a 70/30 distribution of the marital estate -- the distribution favoring the wife. Similarly, Orlando involved an awards of 2/3rds of the marital estate to the wife while the husband had a relatively small income ($29,000). This case was not considered. Ward was not considered because the wife had an MBA was is not a typical maintenance case. Vernon was not considered because the husband appealed and therefore the issue on appeal was not the length of maintenance. The recent Dunlap is a case which is also illustrative of what may be a trend, i.e., what would be a permanent award but one in which the award was reduced upon the retirement of the payor. However, I did not consider this case as one to analyze as permanent or not because of the nature of the award. I also did not consider in the spreadsheet the Harding (554 N.E.2d 459, 1989), and Jones (543 N.E.2d 119, 1989) cases. These were each business valuation cases which were pre-Zells and the percentages were likely affected by this fact.
Thus, there were then 26 twenty year or more cases to examine for permanent versus non-permanent awards. Of those 26 cases, there were 15 cases in which the award as a result of the appeal was a permanent maintenance award or an indefinite maintenance award. In approximately 57% of these cases which represent more typical long-term marriage fact patterns, there was a permanent maintenance award.
Charles 20 Year Marriage Case with Significant Opportunity Cost Re Raising Children Instructions to Consider Permanency: A trend case is IRMO Charles, 284 Ill.App.3d 339, 219 Ill.Dec. 742, 672 N.E.2d 57 (4th Dist. 1996). That case held that it may be appropriate to award permanent maintenance where there has been a 20-year marriage, parties had two children, the wife had been the primary caregiver of the children, the wife recently earned a bachelor's degree (but she had not worked outside the home for a number of years) and the husband was a physician. This case was noteworthy because the appellate court found the award of maintenance to be inadequate, but then instructed that on remand there should be a reconsideration not only for the amount of maintenance, but also whether permanent maintenance would be appropriate.
Drury 29 Year Marriage Case With Permanent Award: Another trend case is Drury discussed above, where the appellate court reversed the award of rehabilitative maintenance. The Drury court opined that case law favored award of permanent maintenance reviewing significant factors: 1) significant disparity in the present and future earning capacities of the parties; 2) Lawrence had the opportunity to continue and advance his career during the marriage because of Phyllis' contributions to the family; (3) Phyllis will not be able to enjoy a standard of living similar to the one she enjoyed during the marriage; 4) she will be forced to sell her limited assets to meet her needs; 5) Lawrence is able to contribute to Phyllis' needs while still meeting his own; and 6) the 29-year marriage was of significant duration. Drury quoted the 2000 Mayhall case with approval.
Mayhall 14 Year Marriage Case With Permanent Maintenance Award: Mayhall
311 Ill.App.3d 765, 244 Ill.Dec. 227, 725 N.E.2d 22 (4th Dist., 2000), was a case involving only a 14 year marriage in which the appellate court stated. The appellate court awarded indefinite maintenance and commented: In the present case, we cannot say it was improper to place the burden of proof on Edward to show that a substantial change of circumstances has occurred in order to terminate or reduce maintenance. Tammy has incentive to improve her economic situation even without a limited period of maintenance. The quote which relies on the opportunity cost of the wife's having raised the children, etc., stated that, There is no question but that Illinois courts give more consideration to permanent maintenance to wives who have undertaken to have children, raise and support the family and who have lost or been substantially impaired in maintaining their skills for continued employment during the years when their husband has been getting his education and becoming established.
It is curious that Mayhall comments:
In the situation where a woman in her 40's marries a wealthy man and their marriage is dissolved when she is in her 60's, a court may logically conclude that she should continue at the standard of living of the marriage for the rest of her life, even though she has not been particularly disadvantaged by the marriage, that is to say, even though there are no marriage-conditioned needs, and even though there is no marital property. "[M]an, like a tree in the cleft of a rock, gradually shapes his roots to his surroundings, and when the roots have grown to a certain size, can't be displaced without cutting at his life." Letter from Justice Oliver Wendell Holmes to William James (April 1, 1907), as published in M. Lerner, The Mind and Faith of Justice Holmes 417-18 (1953). The present case is, of course, much different, not involving a 20-year marriage, and not involving a woman in the final years of her life, but a woman with perhaps 30 or 35 years left in her working career.
Nevertheless, the appellate court affirmed the indefinite maintenance award.
Grundstein Permanent Maintenance Where 21 Year Marriage and Significant Evidence of Wife's Depression Amount Increased By More than Three Times Trial Court's Award: The Grundstein trial court awarded the wife permanent maintenance of $1538 per month. The appellate court reversed and made its own award of $4,800 per month. The wife was fifty-two years old with a college degree in fine arts. From the time of her graduation from college in 1964 until 1990, she was employed as a photography stylist and a booking subagent for models. Her salary when she left her last employment in 1990 was $22,000. The husband's salary at the time of the divorce was over $275,000 per year. The trial court recognized, in its decision, that the husband's income provided the parties with a "luxurious" lifestyle.
The wife's expense affidavit at the trial was for $11,664 per month which the trial court rejected calling it "the Paul Bunyon of all income and expense affidavits." It included $450 for a professional dogwalker to escort her pet to dog shows. The expense affidavit the wife filed five months after the divorce proceedings started sought temporary support of $4,800 per month. The trial court noted that the property award gave the wife very little in the way of income producing property. The wife's treatment by a psychiatrist for depression was an issue on which the appellate court disagreed with the trial court. The trial court found the wife's physician who testified on her behalf "to be `the most pathetic witness' it had ever seen." The undisputed testimony, however, was that the wife had been treated for depression during the course of the marriage and at one point before the start of the divorce proceedings, the wife was incurring as much as $800 per month in psychiatric costs. The trial court, however, found the wife was in good health and employable and that her reasonable medical expenses should be no more than $300 per month and the trial judge did not "see why she couldn't go back to (the modeling industry) at $22,000 per year."
The appellate court stated: "Although a trial judge may be free to disregard psychiatric testimony, he may not do so based upon his own prejudices where the testimony offered of psychiatric illness has substantial foundation." (Citation omitted.) The evidence showed that the wife had been treated by her physician for twelve years during the marriage and she was being treated for depression at the time of the proceedings. Her treating physician testified that if she returned to her previous work it would be very damaging to her self esteem.
Gattone 4 Year Marriage Case With Generous Maintenance Award 6 Years of Maintenance and Disproportionate Distribution Given Opportunity Cost of Older Wife: A case showing the significance of what I refer to as the opportunity cost of the marriage, that is, what is given up for the marriage is In Re Gattone, 317 Ill.App.3d 346, 739 N.E.2d 998 (2d Dist. 2000), GDR 01-11. Gattone held that despite the fact that marriage was only four years long, the trial court did not abuse its discretion by ordering maintenance for six years at $1,000 per year and distributing estate 74%/26% favoring wife. The rationale for the generous decision (to the wife) was that she gave up her job in Wisconsin at beginning of the marriage and her husband had non-marital estate of $800,000.
Bratcher - Maintenance: In Case Involving Long Term Marriage and Large Estate with Husband Receiving Business: Trial Court Improperly Attempted to Equalize Income: Bratcher involved a 34 year marriage in which each party received property valued at approximately $1.6 million and the husband was ordered to pay maintenance of $12,500 per month for a period of 111 months. The appellate court reversed and remanded. The husband was awarded his heating and air conditioning business valued at $1.3 million. The husband was ordered to pay a structured property settlement of $876,759.
The appellate court commented:
Under the trial court's order, Lela will receive monthly income of approximately $14,000, consisting of $8,193 rental income on the Fort Jesse Road property and $5,845 interest at 8% on the lump-sum payment, plus perhaps some income from her anticipated work as a realtor... David will receive monthly income of approximately $27,000, ... If maintenance is factored in, Lela will have monthly income of $26,500 and David will have monthly income of $14,500.
The appellate court compared the Rubeinstein decision and stated:
That is not true in the present case where the parties had acquired several millions of dollars in assets and Lela was awarded half of those assets. Lela was not "saddle[d] *** with the burden of her reduced earning potential" (Hart, 194 Ill. App. 3d at 853, 551 N.E.2d at 745)--she was awarded assets totaling more than the value of the business. It is true that Lela will never generate the income that David does, but there is no need for Lela to work. In some cases, the family business may constitute almost all of the assets and it may be necessary to award that business to the operator of the business and compensate the other spouse through maintenance. That is not true in the present case where Lela was awarded substantial assets, including a $876,759 lump-sum payment, similar to maintenance in gross. Lela made important contributions to the business in its early years, but she has been compensated for those contributions.
The appellate court then stated:
Lela's earning capacity would probably be greater if she had worked continuously outside the home after the parties' marriage, but it would never have approached David's. Lela was not "disadvantaged by the marriage in comparison to" David. Equalization of incomes might be appropriate even though neither spouse has been disadvantaged by the marriage, where the parties have been married for many years, they have few assets, and both have been employed with one spouse earning more than the other. Again, that is not the situation here. It is not necessary to equalize the income of these parties so that they may continue at the standard of living enjoyed during the marriage. This case involved sufficient assets to make a substantial award to Lela, and the lump-sum distribution eliminated any inequality between the parties.
The court then concluded:
The trial court abused its discretion in its award of maintenance. The trial court properly provided for Lela by its division of marital property. Where it is possible to do so, a division of property that adequately provides for the parties is preferable to an award of maintenance. Lela has the advantage of certainty with the lump-sum payment; it cannot be modified or terminated in the future. The fact that David could afford to pay some maintenance is not a reason for ordering him to do so.
Heroy and Bratcher provide an interesting point and counter-point in cases involving a long term marriage. There exists a fundamentally different judicial philosophy with the 1st District affirmance in Heroy compared to the reversal in the 4th District’s Bratcher decision.
Amount of Maintenance Awards in Terms of Percentage of Net Income: Of the long term marriage cases, and excluding the business valuation cases that were pre-Zells, the lowest awards were at approximately 20% of the payor's net income. (The Drury case was not included in this analysis because the wife only contested the length of the maintenance award not the amount. The Marthens case was not included because the amount of maintenance was low because of the significant award of child support -- 40% child support award). The highest two awards were 69% and 49% of the obligor's net income (with the award of 69% being in a case in which the appellate court suspected income manipulation). The average amount of the maintenance award in terms of percentages of those cases where the marriage was more than 20 years in length was 30% of the payor's income. Those cases which were considered in this average are indicated in bold.
Length of Marriage: The average length of marriage with those cases of more than 20 years was 27 years.
Reviewable Maintenance (Maintenance for a Fixed Period)
There were several cases where, for long term marriages, the appellate court affirmed short term, terminable maintenance. Most of these cases involved unique fact patterns as is discussed above.
There is a discernable trend in maintenance subject to review and maintenance for a fixed duration with a termination date. The appellate courts have, in several instances, affirmed a long term award for a long term marriage. There is also a trend for the appellate courts to hold that there was error in setting maintenance for a time certain and to terminate at the end of that time certain, in long term marriage cases where the recipient has been out of the work force. For example, the appellate court reversed a one year award for a twenty year marriage and held it was speculative to assume the recipient can achieve the marital standard of living in one year.
From my research system, Gitlin on Divorce CD-ROM Reports, we have statistics going back through 1987. Here is what I found.
Marriages of Less than Fifteen Years: Often there is no award of maintenance or the maintenance award is relatively modest. The percentages were 12, 13, 15, 16, 17, 19, 19, 25, 26. The highest award was Mohr which was a permanent maintenance award in which the wife had poor health and also was 58 years of age. This was a unique case because the wife's maintenance award from a prior marriage was considered. The other high award (of 25% of the obligor's net income) also involved an elderly maintenance recipient considering the relatively short length of the marriage. See, Mayzner. Lloyd, Madoch, and Chapman also involved relatively unique fact patterns in each case there was a relatively short term marriage but the wife was disabled. In the averages, I did not include those cases in which a party was disabled or the unique fact pattern in Mohr.
Thus, of the more mainstream cases, the high was 19% and the low was 12% of the payor's net income with the average being 15.8 percent of the payor's net income.
Note that the Gattone case also appears to be somewhat of a trend case, demonstrating the movement toward permanent maintenance cases. Gattone involved a generous maintenance award, both in terms of the length of time and the amount. There were unique factors in Gattone including the age of the wife, the fact that she gave up her job in Wisconsin and sold her Wisconsin residence for the sake of the marriage. However, the case is significant because it was a four year marriage case in which the appellate court affirmed an award of permanent maintenance.
Marriages of Between Fifteen to Twenty Years: The maintenance awards were a low of 9% of the payor's net income and a high of 35% of the payor's net income. The percentages were 9, 15, 15, 24, 29, 35. The 9% award was a 1984 case and thus was not considered as a trend case. On this basis the average maintenance award was 25% of the payor's net income. However, the Wolf case was one in which the husband who was the maintenance recipient was disabled. This is not a typical fact pattern. Thus, the average maintenance award was 19.7% of the payor's net income for those cases which addressed more typical fact patterns. Thornton was not considered in the averages because it involved an unallocated award of maintenance and child support.
Any time the Supreme Court accepts a family law case it is instructive. Minear is an example of a trend case since this case was published after the 1993 amendments. This case is important because it involved a 19 year marriage. Wife had a net income of $1,000 monthly while husband had a net income of approximately $3,000 monthly. There were two children only one of whom was a minor. A significant comment of the appellate court decision was that, maintenance is granted to a spouse to enable that spouse to maintain the lifestyle enjoyed prior to dissolution or an approximation of that standard of living. The fact that the wife was not awarded custody of the eldest child was not relevant for this purpose.
Marriages of Greater than 20 Years (see above): In approximately 55% of the cases considered there was a permanent maintenance award. The average amount of the maintenance award in terms of percentages was 30% of the payor's income. The average length of marriage with those cases of more than 20 years was 27 years. The average property distribution was 55% of the net marital estate to the less monied spouse.
Standard of Living During the Marriage: One of the trends in maintenance which is not capable of being statistically reported is the flip side of permanent maintenance, that is, the appellate courts stopped believing in the concept of rehabilitative maintenance. First, the term rehabilitative is not a statutory term. Second, it is not a descriptive term because the term means to restore a person to a former capacity, but that is hardly ever the case in awards of maintenance.
The first attack on rehabilitative maintenance was where the award was for a fixed number of years. These awards were struck down by the review courts on the basis that it was speculative to assume the recipient would be rehabilitated at the end of the term of maintenance.
Attached is a copy of the Gitlin Law Firm's lifestyle maintenance spreadsheet as Exhibit A. In negotiations the recipient should urge lifestyle amount as an objective criterion for determining maintenance which is consistent with the statutory framework. However, if this amount exceeds what the amount would be likely to award, the lifestyle amount should ne reduced to a reasonable amount.
The first step in the maintenance formula is to determine the parties' anticipated net incomes following the divorce. Divide the combined net income combined by two. Note that often the net incomes following the divorce may be lower than the parties' net income before the divorce. This is because the parties will not have the advantage of filing under the status married, filing jointly. Assume that the parties during the marriage equally shared in this income for their lifestyle purposes. For the purpose of illustration assume that the total family net income is $100,000. This amount resulted from husband's contributions of $80,000 and wife's contributions of $20,000. Next, deduct the projected net income of the recipient from employment and assets from the lifestyle amount to determine the amount of maintenance that wife should receive to live at the lifestyle of the parties during the marriage. Assume further that as a result of the settlement the wife will receive assets valued at $200,000. If the house, car, and personal property constitute $100,000, only $100,000 would be available for investment purposes. The amount of net income from investments should be calculated upon the highest return for low risk tax free interest e.g., tax-free municipal bonds. At an eight percent rate of interest, wife's projected net income from employment would be $8,000. Deducting this amount from the lifestyle amount results in an annual maintenance obligation of $2,000 (See Appendix A). Finally, adjust the lifestyle amount for the amount of taxes which wife must pay on the maintenance. Thus, if wife is in an effective 18 percent tax bracket, she would incur tax of $3,960 on the maintenance and husband would be required to pay wife $2,163 per month maintenance.
Conclusion: Finally, the courts of review are realizing that some people who qualify for maintenance simply do not have the ability to generate sufficient income through employment to live at anywhere close to the lifestyle they enjoyed during the marriage and therefore permanent maintenance is appropriate.
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November 19, 2008