College expense contributions by divorced parents: Reservations about reservation provisions
When two individuals obtain a divorce, all of their financial issues are not necessarily fully and finally resolved upon entry of the divorce decree. For individuals with children, they may enter their divorced lives with a particularly crucial financial question unresolved—who will pay for college? Courts do not always require divorcing parties to expressly allocate the cost of their children’s college expenses between themselves upon termination of their marriage. Rather, the issue of each party’s respective obligation to contribute to their children’s college expenses is instead often “reserved” for future determination pursuant to Section 513 of the Illinois Marriage and Dissolution of Marriage Act (“IMDMA”). In other words, a party can petition the court to allocate college expenses at a later date (usually when their children are closer to college age). Given the popularity of these reservation provisions in divorce decrees, family law practitioners must understand the ramifications of these provisions, and how to best convert the “reservation” into actual college expense contributions.
Most recently, the Supreme Court of Illinois recognized that reservation provisions are not the equivalent of a blank check to be cashed at any time. To the contrary, In re the Marriage of Petersen, No. 1108984, 2011 WL 4391130 (Ill. Sep. 22, 2011), holds that a divorced party, whose divorce decree reserves the issue of college expenses and who wishes to later petition a court to force their ex-spouse to contribute to said expenses, cannot obtain contributions for expenses that predate the petition.
The implications of such a rule are evident upon review of the facts in Petersen. In Petersen, the trial court entered the parties’ divorce decree on August 27, 1999. Upon entry of the divorce decree, the wife received sole custody of the parties’ three children (none of whom had yet begun college). With respect to college expenses, the divorce decree contained a standard reservation provision: “The Court expressly reserves the issue of each party’s obligation to contribute to the college or other education expenses of the parties’ children pursuant to Section 513 of the Illinois Marriage and Dissolution [of Marriage] Act.” Id. at *1. In other words, neither parent had an obligation to contribute a specific amount of money towards their children’s college expenses upon entry of the divorce decree. Their obligations were instead reserved for a later day.
That later day arrived on May 17, 2007, when the wife petitioned the trial court to allocate the college expenses of the parties’ children. Specifically, she requested the following contributions from her ex-husband: (1) all previously paid tuition and expenses for her oldest child who attended college in 2002 and graduated in 2006; (2) all previously paid and future tuition and expenses for the second child who began college in 2004 and was still in school at the time of the wife’s petition; and (3) all future tuition and expenses for the parties’ youngest child who was set to graduate from high school in the days following the wife’s petition.
As illustrated, the wife’s petition requested her ex-husband to contribute to expenses that were accrued and paid by the wife prior to her petition as well as future expenses yet to accrue and yet to be paid. The trial court granted the wife’s petition and ordered the husband to pay 75% of the college expenses for all three children (regardless of whether the expenses were accrued or paid before or after the filing of the wife’s petition). The appellate court disagreed and held that the trial court could not order the husband to pay for college expenses that predated the notice of filing of wife’s petition to allocate college expenses. Petersen v. Petersen, 403 Ill. App. 3d 839, 846 (1 Dist. 2010). The wife then appealed to the Supreme Court of Illinois wherein she argued that the appellate court erred in precluding her from obtaining college contributions from her ex-husband for expenses that predated her petition.
Ultimately, the Supreme Court of Illinois disagreed with the wife. The court held that when a divorce decree reserves the issue of college expenses pursuant to Section 513, and one party later petitions the court to allocate said college expenses, the court may not order the other party to contribute to expenses that “predate” the petition. In re the Marriage of Petersen, No. 1108984, 2011 WL 4391130, at *6 (Ill. Sep. 22, 2011). Accordingly, the wife in Petersen would be unable to receive financial contributions from her ex-husband for the tens of thousands of dollars in college expenses of her children that predated her May 2007 petition.
The court’s decision was premised both on statutory construction and underlying policy concerns. From a statutory perspective, the court explained that Section 510 of the IMDMA governed the wife’s petition, which required the conclusion that expenses that predated the petition were not recoverable. In re the Marriage of Petersen, No. 1108984, 2011 WL 4391130, at *2-3 (Ill. Sep. 22, 2011). Section 510 provides, “Except as otherwise provided . . . the provisions of any judgment respecting maintenance or support may be modified only as to installments accruing subsequent to due notice by the moving party of the filing of the motion for modification. . .” 750 ILCS 5/510. The court first explained that Section 510 applied because college contributions are a form of support and are thus modifiable only pursuant to Section 510. Id. at *2-3. The court then explained that the wife’s petition to allocate college contributions was indeed a modification of the parties’ original divorce decree, which merely reserved the issue of college expenses. Id. at *3-4. Therefore, “[u]nder the plain language of the statute, a retroactive modification is limited only to those installments that date back to the filing of the petition for modification.” Id. at *4.
The court further justified its decision based upon underlying policy concerns. Specifically, the court noted that if an individual were able to receive contributions from their ex-spouse for any and all college expenses, regardless of when said expenses were initially incurred or even paid, then individuals could “wait indefinitely until seeking to act pursuant to the reservation clause.” Id. at *6. The court stated that various purposes of the IMDMA—including mitigating harm to spouses and children caused by divorce proceedings and securing maximum involvement of both parents regarding their children after divorce litigation—are furthered by prompt resolution of reserved issues such as college expenses. Id.
Practitioners should note that scope of Petersen is limited to post-decree cases involving reservation provisions. Where an individual does not have a final divorce decree, but instead simply petitions the court during the pendency of their divorce proceeding for allocation of college expenses, Petersen is not necessarily controlling. For example, In re the Marriage of Chee, No. 1-10-2797, 2011 WL 3186508 (1 Dist. Jul. 22, 2011), involved a wife who moved the court (pursuant to a motion for summary judgment during the underlying petition for dissolution/invalidity of marriage proceeding) to order her husband to contribute to their two children’s college expenses even though most of the expenses were incurred prior to the wife’s request. The husband disagreed and claimed that that the Petersen appellate decision precluded such an order, as the expenses were incurred prior to wife’s motion. Id. at *5.
Chee distinguished Petersen on the basis that Petersen involved a final divorce decree with a reservation provision. Id. at *5. When the wife in Petersen requested allocation of college expenses, she “sought a modification of a final judgment bringing the case within the scope of section 510(a) of the Marriage Act and limiting the father’s liability for his children’s education to the notice date of the mother’s expense petition.” Id. Chee did not involve a modification of a final order and thus Section 510 was inapplicable. Id. at *5. Thus, the spouse in Chee was not legally precluded from seeking a college expense contribution for expenses that predated her motion.
Overall, Petersen nonetheless provides a cautionary reminder for thousands of divorced individuals in Illinois. Namely, spouses who possess divorce decrees that reserve college expenses for further determination, yet eventually desire to obtain a contribution to these expenses from their ex-spouse, must be sure to petition the court for said contribution at the earliest possible time to ensure they are not precluded from receiving contributions for expenses that predate the petition. Notably, Petersen does not expressly explain when an expense will be deemed to have predated a petition. Is the date upon which the expense is incurred instructive? The invoice due date? The actual date of payment? Absent express guidance from the court, family law practitioners should err on the side of caution and advise their clients to file their petitions for college contributions as soon as practicable. Otherwise, the client could end up footing the bill for thousands of dollars that may otherwise be subject to contribution from their ex-spouse. ■