Illinois Divorce Lawyer Russell D. Knight Explains the Role of Income-Producing Assets in Maintenance Calculations

Understanding how income-producing assets impact spousal maintenance is a key concern during divorce proceedings, especially in Illinois, where the law balances fairness and financial stability. Illinois divorce lawyer Russell D. Knight (https://rdklegal.com/income-producing-assets-and-maintenance-in-an-illinois-divorce/), of the Law Office of Russell D. Knight, addresses this complex topic in a recent article, "Income Producing Assets and Maintenance in an Illinois Divorce." Knight explores how assets that generate income can affect whether a spouse is eligible for maintenance, how much may be awarded, and how courts approach these calculations.

The article by Illinois divorce lawyer Russell D. Knight outlines how Illinois courts must first determine if spousal maintenance is appropriate at all. According to Knight, "If the assets awarded are so incredibly lucrative that the spouse's needs will certainly be met, no maintenance need be awarded." He notes that Illinois law requires courts to evaluate all income and property-both marital and non-marital-when assessing maintenance eligibility. Income-producing assets, such as investments or rental properties, can significantly reduce or eliminate the need for maintenance if they generate enough independent income to cover a spouse's living expenses.

Illinois divorce lawyer Russell D. Knight expands on how maintenance is calculated when income from awarded assets is not enough to meet a spouse's needs. In such cases, Illinois courts use a formula set by state law-unless the couple's combined gross income exceeds $500,000, in which case the court applies its own judgment to determine a fair outcome. Any expected income from awarded assets must be clearly demonstrated in court, often through financial testimony or documentation. "Testimony may show a 4% or 5% return from AAA corporate or treasury rates, or an 8-9-10% return from a bank loan, collateralized loan obligation, or other preferred equity rate," Knight writes, highlighting the importance of presenting solid financial evidence.

Knight also addresses the idea of "double-dipping," where the same asset is considered during property division and again during maintenance calculation. This concept is particularly contentious when it comes to retirement accounts. He references differing judicial views across Illinois' appellate districts, with some allowing retirement distributions to count as income for maintenance and others rejecting this practice. The issue, according to Knight, remains unsettled: "This is the rare instance where two different judicial districts have multiple different rules in multiple different parts of Illinois."

Throughout the article, Russell D. Knight provides insights into how the Illinois courts weigh a range of factors beyond just income, including each party's future earning capacity, age, health, duration of the marriage, and the standard of living established during the marriage. A key point emphasized by Knight is that courts aim to ensure the maintenance-receiving spouse does not suffer a drastic reduction in lifestyle post-divorce. "Maintenance is designed to allow the recipient spouse to maintain the standard of living enjoyed during the marriage," he states, citing relevant Illinois case law.

Importantly, Knight also explains that courts are not required to use a fixed rate of return when calculating the presumed income from awarded assets. Judges have broad discretion and may take judicial notice of current interest rates or consider financial evidence presented during the case. If the income potential of awarded assets cannot be clearly demonstrated, the court may choose not to factor them into maintenance decisions. On the other hand, when that income is established with sufficient clarity, it can significantly reduce or even remove the need for a maintenance award.

The article reinforces that every divorce case involving income-producing assets is unique. Illinois divorce lawyer Russell D. Knight underscores the necessity of presenting solid evidence and legal arguments tailored to the specific financial facts of each case. Courts will consider not only asset value and income but also whether the party seeking maintenance can support themselves without selling assets or depleting capital. As one case Knight references points out, "A former spouse receiving maintenance is not required to exhaust all of her assets in order to meet her basic needs."

For anyone navigating a divorce in Illinois involving income-generating property, the analysis provided by Russell D. Knight offers a comprehensive breakdown of what to expect in court. The implications are particularly significant for high-asset divorces, where the line between fair asset division and equitable maintenance becomes harder to define.

Those facing divorce decisions involving financial assets are encouraged to learn more about their rights and obligations under Illinois law. The full article from Russell D. Knight presents a detailed roadmap to understanding how income from awarded assets is weighed in maintenance determinations-and when that income might change the outcome entirely.

About the Law Office of Russell D. Knight:

The Law Office of Russell D. Knight provides dedicated family law representation in Chicago, Illinois. Led by Russell D. Knight, the firm focuses on guiding clients through divorce and family law matters with practical strategies and a clear understanding of Illinois law.

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