A recent Illinois Appellate court case demonstrated the legal mess and expensive post-divorce litigation that can occur when a non-attorney serves as a divorce mediator. The case was a DuPage County divorce but the court’s ruling applies to divorces throughout Illinois. These are some things that can be expensive mistakes when divorcing.
Because the divorce mediator was not an Illinois divorce attorney, parts of the child support terms of the divorce settlement did not adhere to Illinois law. In mediation, the parties agreed to calculate child support in a simplistic way that created a “windfall” for the wife. The wife likely ended up with the windfall because her husband did not retain an attorney.
Because the husband was self-employed, determining his net income for child support purposes required an proper understanding of Illinois law. It seems that he parties and their mediator did not understand Illinois law. The lack of legal knowledge ended up costing the husband a lot of money.
But that is not the only expensive mistake that could have been avoided. The settlement agreement the parties and their mediator reached in mediation was not clear enough. Immediately following the divorce, the parties disagreed over how much child support the father owed under the terms. This lead to years of conflict and expensive litigation that could have been avoided.
Using Mediator That Was Not An Illinois Attorney can be an Expensive Mistake when Divorcing
In this recent appellate case, In Re Marriage of Solecki, 2020 IL App (2d) 190381, the husband was a chiropractor who owned his own practice. The parties had three children. When the parties decided to divorce, they hired a divorce mediator. The mediator they hired was not an Illinois divorce attorney. This proved to be an expensive mistake in their divorce. In mediation, the chiropractor and his wife negotiated the financial and parenting terms of their divorce.
One of the terms was how his net income would be determined for purposes of child support. The chiropractor’s income and business expenses fluctuated every year. So, the parties agreed that they would conduct a “true up” every year. A “true up” is an attempt to confirm whether the correct amount support has been paid.
As is customary, the mediator prepared a mediation agreement with the settlement terms. The wife’s attorney prepared the Marital Settlement Agreement (“MSA”). The MSA reproduced the net income provisions agreed to in mediation.
Some of the financial terms the parties negotiated in mediation did not adhere to Illinois law — likely because the mediator was not an Illinois divorce attorney. The parties’ agreement on how to “true up” husband’s net income were not in line with how Illinois law defined net income for child support.
One Spouse Not Retaining An Attorney can be an Expensive Mistake when Divorcing
In the divorce, Mr. Solecki did not retain an attorney. The way net income was defined in the MSA created a “windfall” for the wife. Often the spouse represented by an attorney ends up with much better terms. Had husband retained a divorce attorney he may have avoided years of conflict and future litigation.
When each party has an attorney the legal writing is reviewed and analyzed by two legal minds. This could result in a better end product. In the Solecki case, the terms regarding how to calculate net income and child support were subject to different interpretations. Good legal drafting should avoid confusion and conflict.
“True Up” Clauses that are Not Extremely Clear or Do Not Follow Illinois Law can be an Expensive Mistake when Divorcing
For years after their divorce was finalized, the parties did not agree on how calculate child support under the MSA’s terms. “True up” clauses in general can increase future conflicts. Every year, the parties need to review each other’s tax returns and, likely, other income and expense documents. Most divorced people do not want their former spouse reviewing their financial information.
The calculations can become complex quickly, particularly for business owners. It provides an opportunity for your ex to question whether your business expenses are really reasonable and necessary. Was that trip really business-related? Certain business expenses probably should not reduce income for purposes of support. Depreciation is an example.
After years of disagreement, the chiropractor filed a petition with the court. He requested that the court calculate the “true up” amounts of child support for the previous three years. The court struck the terms in the parties’ MSA related to child support because the terms did not follow Illinois law. The court also struck terms because the MSA because its terms double counted some of the chiropractor’s income.
This case demonstrates mistakes to avoid when mediating or negotiating the financial terms of a divorce. If one or both of the parties owns a business or has fluctuating income, the calculations can be complex. Think carefully about whether a “true up” is something you really want to sign up for.
A divorce attorney can never advise or represent both parties. It is generally in the best interest of each party to retain his or her own attorney, even when mediating. This case also underscores the value of good legal drafting to avoid different interpretations. Investing in legal representation and an Illinois attorney-mediator can save years of conflict and save money in the long-run.
Here is a link to the case opinion: In re Marriage of Solecki, 2020 IL App (2d) 190381