Business Valuation, Financial & Tax Issues in Divorce: Defining & Understanding Income (2021)

Welcome to the Program 
Bruce L. Richman, CPA/ABV, CVA, CFF, CFE, CDFA, CPEP, Mazars USA, LLP, Chicago, Program Moderator 

A View from the Bench  
Hon. Grace Dickler, Presiding Circuit Judge, Domestic Relations Division Circuit Court of Cook County, Chicago 

Financial Case Law Update 
2019 and 2020 have brought a flurry of cases involving financial issues in divorce cases. We will highlight these issues in this hard-hitting summary. 
Gunnar J. Gitlin, Gitlin Law Firm, Woodstock  

Income for Support: An Overview of What Qualifies as “Income” for Purposes of Maintenance and Child Support Determinations 
Income for support is not limited to W-2 wages or taxable income on a tax return. Learn about the variety of funds that fall within the definition of “income” through a review of the fundamental concepts underlying all income determinations. Understand the interplay between different types of income, imputed income, the support guidelines, and arguments in support of a deviation from the guidelines. 
Hon. Timothy J. McJoynt, Circuit Court of DuPage County, Wheaton  
Joshua T. Friedman, Davis Friedman LLP, Chicago  

When are Social Security and Retirement “Income for Support or Maintenance”?  
While the Court is required to consider each party’s financial circumstances in determining maintenance and child support, when and to what extent should the Court consider social security or retirement income? Should a court impute additional income onto a party when they are eligible to receive social security or retirement income, but choose not to? What effect, if any, does a child’s right to receive a portion of a parent’s social security impact support? A review of the case law will examine these questions and more.   
Katelyn Blanchard, Berger Schatz, Chicago
Leon I. Finkel, Berger Schatz, Chicago 

Is Lifestyle Still a Factor for Maintenance? 
What factors of the standard of living will a Court consider in view of the guidelines?  Is the ability to save for retirement an element that should be considered?  
Janet E. Boyle, Family Law Solutions, P.C., Chicago  

The Power and Pitfalls of an Attorney’s Engagement Agreement 
(0.5 Professional Responsibility Credit) 
How can we avoid “contingent fee“ pitfalls while ensuring that a reasonable fee may include considerations beyond an hourly rate? Understand how results accomplished is only one of several considerations in determining a reasonable final fee in domestic relations matters. 
Donald C. Schiller, Schiller DuCanto & Fleck, LLP, Chicago 
William J. Stogsdill, The Stogsdill Law Firm, P.C., Wheaton 

PPP Loans Update – Where Did the Money Go? 
How are we handling these funds?  Will these loans be forgivable debt?  Will they be true debt?  How will they be treated for tax purposes?   
Ryan J. Vaughan, Mazars USA, LLP, Chicago 

COVID-19’s Impact on Valuations and Cash Flow - Where Are We Now? 
Get an update on the impact that the COVID-19 pandemic has had on the valuation of companies this past year. Where do we go in 2021? 
Bruce L. Richman, CPA/ABV, CVA, CFF, CFE, CDFA, CPEP, Mazars USA, LLP, Chicago 

Modifications for Maintenance and Child Support: Pre, During and Post Pandemic  
Learn about topics like: what constitutes “substantial change in circumstances,” including implications of pandemic on individuals and businesses; differences and nuances of modification proceedings vs. review proceeds; application of the guidelines; burdens of proof; and other issues related to these post-decree proceedings. 
Hon. Pamela E. Loza, Cook County Circuit Court, Chicago 
James M. Quigley, Beermann LLP, Bannockburn & Chicago  
Jordan D. Rosenberg, Beermann LLP, Bannockburn & Chicago 

What is a Reasonable Rate of Return for Court Purposes?: or the Quest for the Holy Grail
Judges are frequently confronted with deciding expected and reasonable returns from an investment portfolio.  This session will provide a deep dive into the case law surrounding the application of rates of return to portfolio holdings and explore different approaches that have been used to develop and defend rates of return; the historical returns of markets; and studies that capture the historical returns of different investor groups.  We will also address the variables that have an impact on the returns expected and actually achieved by different investor groups and why knowledge of these is important to reaching a reasonable recommendation in marital dissolution matters. The recent Lugge case will also be discussed. What is the impact of an assumed 6.5% portfolio return on marital assets distributed to the wife in this matter?  What are the stated versus implied assumptions embedded in this rate?  How does this rate differ from the rate applied to the husband’s assets?       
Carlton R. Marcyan, CPA, CFP, MBA, MCR (in progress), Schiller DuCanto & Fleck, LLP, Lake Forest 
Brandi L. Ruffalo, MBA, CVA, CBA, Valuation & Forensic Partners, LLC, Schaumburg 

Cohabitation Clusterfork              
Unless otherwise agreed, maintenance terminates when the recipient “cohabits with another person on a resident, continuing conjugal basis.” Simple, right? Wrong! Since the doctrine of cohabitation was statutorily enacted in 1977, its judicial interpretation has been varied and even contradictory. Courts have vacillated on a spectrum between love and money, at times focusing on the recipient’s romantic relationship (See In Support of Halford, 70 Ill. App. 3d 609, 612 ruling the "husband-wife relationship” contemplates “acts of sexual intercourse as part of the full or de facto husband-wife relationship”) and at times focusing on the recipient’s financial relationship (See In Re Marriage of Sappington, 106 Ill.2d 456 (1985) ruling that “it is the husband-and-wife-like relationship which bears the rational relationship to the need for support, not the absence or presence of sexual intercourse.”) The one constant through it all is the “husband-wife relationship” which, in a world where married couples can have open relationships, financial independence, and even physical independence, distills the doctrine of cohabitation down to the clarity of mud. Review practical considerations, such as where a payor and recipient would be wise to focus their arguments, and philosophical considerations, such as whether our doctrine is fair and accomplishing the purpose it was designed for. 
David I. Grund, Grund & Leavitt, P.C., Chicago & Oak Brook 
Justin A. Haber, Kalcheim Haber, LLC, Chicago 

Annual Judges’ Panel 
(1.0 Professional Responsibility Credit) 
Judges offer practice tips on the income and divorce topics covered throughout the day and provide unique insights on your questions.
Hon. Stacy L. Campbell, St. Clair County Circuit Court, Belleville
Hon. Linda E. Davenport, DuPage County Circuit Court, Wheaton
Hon. Matthew R. Link, Cook County Circuit Court, Chicago 
Hon. Michele F. Lowrance (Ret.), JAMS, Chicago
Hon. James A. Shapiro, Cook County Circuit Court, Chicago 
Hon. Marita C. Sullivan, Cook County Circuit Court, Chicago

Panel Moderators: Jennifer M. Cohen, Kalcheim Haber, LLC, Chicago 
Judd Fineberg, Dussias Wittenberg Koenigsberger LLP, Chicago 

Adjourn