Gitlin Law Firm 2010 Illinois Divorce and Paternity Case and ...

Property Cases Law:
Retirement Benefit Cases
Defined Contribution Plans
Schinelli – Defined Contribution Plan and Change in Value of Plan from Date of Divorce Trial
to Date of Distribution
nd
IRMO Schinelli, (2 Dist., January 12, 2011).
This was the second appeal. In the first appeal the court had, among other things, changed the cap
regarding the percentage order regarding maintenance downward from $650,000 so that the ex-wife
was sharing in the her former husband's income regarding supplemental maintenance only for
income between $200,000 to $250,000 – rather than $200,000 to $650,000. Schinilli I, was
unpublished.
This case is important because in a number of divorce cases the court enters its judgment dividing
assets based upon evidence at the time of trial. But by the time the court decides the case after
taking the case under advisement, etc., and the assets are divided, the assets awarded to one party
may be of significantly less (or different) value than per the previous evidence. This might be
remedied by a stipulation regarding changes in value. But of course, after the close of proofs it may
be difficult or impossible to present this evidence. In any event, the changes in value in this case
were even more profound because the delay was attributable to the appeals.
In this case, the ex-husband pointed out that the value of his 401(k) plan on remand had dropped
drastically due to market conditions – with the evidence at the time of the trial -- in March 2007 --
indicating the value had been $309,423. The trial court stated:
The evidence established that as of March 31, 2009, the Wachovia 401(k) account
had a value of $179,830. In response to comments by the parties as to its intent in
dividing the retirement accounts, the trial court explained: “I added them all up,
divided them by two. She kept hers, he kept his; except for the 401K for him, he
would have to roll over money into her. So that, when they all ended up at the
bottom, they had the same amount. The Wachovia 401K was the vehicle designated
to be the one that money would come out of his so that, when it went into hers, they
would each have the same total for all of their accounts.
The ex-wife's attorney had argued that the divorce judgment provided that she was to receive
$152,522 from the Wachovia 401(k). So that is the amount she should receive. At the close of the
hearing on remand, the trial court awarded the wife $152,522 (84.8%) of the Wachovia 401(k)
account’s value. The ex-husband contended that the trial court’s dissolution order intended that the
parties’ retirement assets be divided equally between them. But the effect of the QDRO was to
award his ex-wife an additional $125,000.
In an interesting wrinkle the appellate court stated:
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