In re Marriage of Tate, 2024 IL App (3d) 230315-U

Summary

Case Summary: In re Marriage of Tate, 2024 IL App (3d) 230315-U - In In re Marriage of Tate, the Illinois appellate court affirmed that ALFA program payments to a retiring financial advisor constituted proceeds from the sale of personal goodwill (his book of business) rather than employment income, thereby excluding them from maintenance calculations. The decision turned on expert witness credibility and underscores that the characterization of business transition payments—not merely their amount or payment structure—determines whether they become maintenance-eligible income.

The opposing counsel is already on the back foot. When Wesley Tate's legal team walked into that Third District courtroom, they knew exactly what they were protecting—and it wasn't just a retirement plan. It was the strategic classification of wealth that separates sophisticated divorce strategy from amateur hour.

In re Marriage of Tate (2024 IL App (3d) 230315-U) just handed high-net-worth practitioners a masterclass in how business transition payments get characterized—and why that characterization can mean the difference between your client paying maintenance on hundreds of thousands of dollars or keeping it entirely off the table.

Pay attention. This is how the game is played at the top.

The Strategic Battlefield: What Was Actually at Stake

Wesley Tate wasn't just retiring. He was executing a sophisticated business transition through the Aspiring Legacy Financial Advisors (ALFA) Program—a structured mechanism for financial advisors to transfer their book of business to successors while extracting value from decades of client relationship cultivation.

The question that landed in front of the trial court was surgical: Are these ALFA payments employment income subject to maintenance obligations, or are they proceeds from the sale of personal goodwill—an entirely different animal?

Marsha Tate's team pushed hard for the employment income classification. They wanted those payments included in the maintenance calculation. Wesley's team understood something more fundamental: the characterization of income streams is where sophisticated divorce strategy lives or dies.

The Court's Analysis: Why Classification Matters More Than Amount

The trial court didn't just rule in Wesley's favor—it articulated precisely why the ALFA payments fell outside the maintenance income definition. The appellate court affirmed, and the reasoning is instructive for anyone advising high-net-worth clients with complex compensation structures.

Key Distinctions the Court Drew:


Ongoing employment compensation (salary, bonuses, commissions tied to current work) = maintenance-eligible income
Proceeds from the sale of personal goodwill (client relationships, book of business value) = not employment income


The court emphasized that Wesley's ALFA payments were compensation for the transfer of his book of business—value he created through long-term client relationships, not through ongoing labor. This distinction is everything.

The Extrinsic Evidence Play

Both parties brought expert witnesses. Wesley's expert testified that the ALFA payments constituted sale proceeds from the book of business. Marsha's expert argued they were performance-based employment income given their regular payment structure.

The trial court found Wesley's expert more credible. The appellate court affirmed that the trial court properly utilized extrinsic evidence—including witness credibility assessments and expert opinions—to reach its conclusion.

Translation: when the documents are ambiguous, the quality of your expert testimony becomes the deciding factor. This is not the place to economize.

The Practical Playbook: What High-Net-Worth Clients Need to Know

If You're the Higher-Earning Spouse with Complex Compensation:

Your compensation structure is either a liability or an asset in divorce proceedings. The Tate decision confirms that Illinois courts will look beyond the surface of payment labels to examine the underlying economic reality.

Action items:


Document the distinction between ongoing employment duties and business transition activities
Preserve contemporaneous records showing the sale/transfer nature of transition payments
Engage forensic accounting expertise early—before your spouse's team starts characterizing your income streams


If You're the Dependent Spouse Seeking Maintenance:

The Tate decision isn't a complete loss—it's a roadmap for what you need to prove. Marsha Tate's team lost on the evidence, not the law. The appellate court noted she "did not substantiate her claims adequately."

Action items:


Subpoena the actual program agreements and employment contracts—don't rely on your spouse's characterization
Examine whether "transition" payments are actually tied to ongoing performance metrics or employment requirements
Challenge the personal goodwill classification by demonstrating institutional support, branding, or enterprise goodwill components


The Cyber-Law Angle: Discovery in the Digital Age

Here's where sophisticated practice separates from standard family law work. Financial advisors—like Wesley Tate—operate in heavily regulated, digitally documented environments. Their communications with clients, transition planning documents, and internal program correspondence exist on servers, in email archives, and within compliance systems.

If your opposing party is claiming their payments are "sale proceeds" rather than employment income, their digital footprint will tell the real story. Did they continue servicing clients during the transition period? Were there performance requirements tied to the payments? Did internal communications characterize the payments as compensation?

Cyber negligence in preserving these records creates discovery leverage. A litigation hold demand at the outset of proceedings preserves your ability to challenge characterization claims with actual evidence rather than dueling experts.

The Credibility Factor: Why Expert Selection Is Non-Negotiable

The Tate appellate decision turned on the trial court's credibility determination regarding expert witnesses. Both sides presented experts. One side won.

In high-net-worth divorce proceedings involving complex compensation structures, your expert witness is not a luxury—it's the foundation of your case theory. The expert must:


Understand the specific industry compensation practices at issue
Articulate clear distinctions between income types under Illinois maintenance law
Withstand cross-examination without hedging into ambiguity


The judge already knows which expert sounds like they're testifying from genuine expertise versus which one sounds like they're advocating for a paycheck. Choose accordingly.

Strategic Implications for Illinois Practitioners

The Tate decision reinforces several principles that sophisticated family law practitioners must internalize:

First: The manifest weight of the evidence standard gives trial courts significant discretion in characterizing income. Win at trial or face an uphill appellate battle.

Second: Personal goodwill remains a viable shield against income characterization for business transition payments—but only when properly documented and supported by credible expert testimony.

Third: Equitable defenses require substantiation. Marsha Tate's equitable arguments were rejected because she failed to build the evidentiary foundation. Assertions without evidence are not legal strategy.

The Bottom Line

In re Marriage of Tate is a reminder that high-net-worth divorce is a technical discipline. The difference between Wesley Tate keeping his ALFA payments off the maintenance table and having them included wasn't luck—it was strategic classification, credible expert testimony, and a legal team that understood how to frame the economic reality of complex compensation.

Your opposition's counsel may not have read this case yet. That's their problem.

If you're facing a dissolution involving complex compensation structures, business transitions, or disputed income characterization, the time to build your evidentiary foundation is now—not after your spouse's team has already framed the narrative.

Book a consultation with our team today. The strategic advantage belongs to whoever moves first.

Full Opinion (PDF): Download the full opinion

Written by Jonathan D. Steele

Chicago divorce attorney with cybersecurity certifications (Security+, CEH, ISC2). Illinois Super Lawyers Rising Star 2016-2025.

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