In re Marriage of O'Malley, 2021 IL App (2d) 190917-U

In re Marriage of O’Malley, 2021 IL App (2d) 190917‑U (Order filed Aug. 3, 2021) (Rule 23(b) — non‑precedential)

1) Parties and citation
- Maura J. O’Malley (petitioner/appellee) v. Joseph B. O’Malley (respondent/appellant), 2021 IL App (2d) 190917‑U.

2) Key legal issues
- What components of an expatriate compensation package (expat allowance and employer tax “gross‑up”) may be included in a payor’s income for spousal maintenance?
- Whether RSUs awarded to the wife as part of equitable distribution can be treated as the husband’s “income available” for maintenance.
- Whether husband met the clear‑and‑convincing burden to attribute gains to non‑marital retirement funds.
- Whether the trial court properly awarded contribution to wife’s attorney fees under IMDMA §§ 503(j) and 508(b).

3) Holding / outcome
- Court affirmed in part and reversed in part:
- Affirmed that the trial court properly included the expatriate allowance and related tax‑protection gross‑ups (as reported on W‑2) when calculating husband’s income for maintenance.
- Reversed the court’s inclusion of the value of RSUs awarded to the wife (equitable‑distribution award) as a component of the husband’s income available for support.
- Upheld the maintenance award of $15,000/month to the wife (no abuse of discretion).
- Affirmed trial court’s finding that husband failed to prove by clear and convincing evidence the amount of gain attributable to his asserted non‑marital retirement assets.
- Affirmed award of attorney‑fee contribution under §503(j); reversed award under §508(b).

4) Significant legal reasoning
- Compensation characterization: the appellate court recognized that employer‑paid allowances and tax gross‑ups that appear as wages on W‑2s can be considered part of a payor’s available income for maintenance even if the payor does not receive the gross‑up as spendable cash; courts should examine the nature and substance of expatriate benefits.
- Double‑counting/asset‑to‑income distinction: treating assets awarded to the spouse (RSUs) as the payor’s income conflates equitable distribution with available income and improperly double‑counts marital resources; equitable awards cannot automatically be converted into the obligor’s income stream.
- Tracing burden: a party asserting non‑marital character of retirement gains must meet the high clear‑and‑convincing standard with adequate, specific tracing proof.
- Fee awards: §503(j) contribution affirmed based on disparity/need and financial resources; §508(b) award reversed where statutory prerequisites/factual findings supporting that particular statutory basis were lacking.

5) Practice implications
- When litigating maintenance in expatriate or cross‑border employment contexts, present detailed evidence tying reported W‑2 components to actual cash flow and explain employer gross‑ups; expect courts to treat reported compensation holistically.
- Don’t rely on the simple fact of an asset being awarded to a spouse to justify increased maintenance — separate the equitable‑distribution valuation from income calculations and avoid double‑counting.
- Prepare robust, documentary tracing if asserting non‑marital origins of retirement gains (meet clear‑and‑convincing standard).
- When seeking fee awards, plead and prove the specific statutory basis and factual predicates for each statutory provision relied upon; court must make discrete findings for each statutory ground.