In re Marriage of Dahm-Schell, 2021 IL 126802

1. Case citation and parties
- In re Marriage of Dahm‑Schell, 2021 IL 126802.
- Appellee/Petitioner: Sandra D. Dahm‑Schell. Appellant/Respondent: Mark R. Schell.

2. Key legal issues
- Whether mandatory required minimum distributions (RMDs) or other withdrawals from an inherited IRA—consisting of funds that were never previously imputed as income to the recipient—constitute “income” under 750 ILCS 5/504(b‑3) and 5/505(a)(3) for purposes of calculating child support and maintenance.
- Relatedly, whether treating such withdrawals as income creates impermissible “double counting.”

3. Holding / outcome
- Illinois Supreme Court affirmed the appellate court: mandatory distributions/withdrawals from an inherited IRA that were not previously imputed are properly treated as “income” for child support and maintenance calculations. The circuit court’s exclusion of those RMDs was reversed and the case remanded for recalculation.

4. Significant legal reasoning
- The Court relied on the Act’s broad definition of “gross income” as “all income from all sources” and on precedent (In re Marriage of Mayfield) that income includes gains/benefits that enhance a payor’s ability to support children.
- It distinguished McGrath (where regular withdrawals from a savings account were not income because the funds had already been counted as income previously) by focusing on whether the underlying funds were ever imputed as income. If the inherited funds were never previously treated as income, counting RMDs as income does not double‑count.
- The Act’s enumerated exclusions did not apply to inherited IRA distributions in this record. The Court therefore permitted courts to include mandatory inherited‑IRA distributions in gross income unless and until those funds were previously imputed.
- Practical tracing is required: courts must determine the source of distributions and whether the principal was previously accounted for as income.

5. Practice implications (concise)
- Counsel must fully disclose inheritances and required minimum distributions in financial affidavits and hearings on support/modification.
- Trial courts should (and will) trace distributions to determine whether the corpus was previously imputed; avoid mechanical exclusion of inherited account withdrawals.
- Parties who receive nonmarital inheritances should expect RMDs to be considered in support calculations unless the funds were already counted as income; reinvestment of distributions into other retirement accounts does not negate characterization as income.
- Consider tactical use of temporary/ interim imputations, tax effects of RMDs, and timely appeals or post‑judgment motions where inherited funds alter support capacity.