Our 2016 amendments to Illinois law provide welcome clarity to a line of Illinois cases involving reimbursement claims for a non-marital business. These cases had essentially overlooked the reasonableness or the adequacy of the compensation. The line of cases that will be discussed brings up the issue involving non-marital corporations regarding whether retained earnings are marital or non-marital in character. The Second District 2009 case and the 2011 First District case provided the bookends for the court’s treatment of retained earnings, prior to the 2016 rewrite. And in 2012 the Second District again weighed in with its Dann decision. But, in light of the 2016 amendments, whether or not a non-marital business accrued substantial retained earnings during the marriage should no longer matter – so long as the marital estate has reasonably been compensated. Nevertheless, because there can be claims that the marital estate was not reasonably compensated, we will review this line of Illinois case law.
Classification of Retained Earnings of a Premarital Business in Illinois Divorce Cases Updated 2022
Published Date: May 20, 2016
Last Updated: March 26, 2018
Number of Pages: 15