Verhines v. Hickey

JUSTICE JORGENSEN delivered the judgment of the court, with opinion.

Appeal from the Circuit Court of Du Page County. No. 05-D-2084 Honorable Neal W. Cerne, Judge, Presiding. JUSTICE JORGENSEN delivered the judgment of the court, with opinion.
Justices Schostok and Spence concurred in the judgment and opinion.

OPINION

¶ 1 Respondent, Michael J. Hickey, petitioned for a reduction of child support under section 510 of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/510 (West 2016)). Michael pleaded that an involuntary termination led to an early retirement and that, at age 64, he no longer earned the $180,000 net income upon which the support amount had been based. The court granted the petition, reducing the monthly support amount from $3043 to $1700. It determined Michael's net income under section 505 of the Act (id. § 505) to be $78,000 per year, with a guideline support amount of $1300 per month, and it issued an upward deviation of $400 due to Michael's wealth. comparatively modest support obligation over his son's remaining years of dependency. Also, we note that the trial court misapplied the law when it considered only those costs exclusive to the child in determining the child's needs, it misstated the evidence when it assessed Cherie's financial resources, and it engaged in faulty logic when it assessed the impact that satisfying Michael's support obligation would have on his financial security in retirement. Accordingly, we reverse.

¶ 4 I. BACKGROUND

¶ 5 Michael, born in 1953, and Cherie, born in 1967, married in 2004. Their only child together, a son, M.H., was born later that year. Michael had another son from an earlier marriage, who was then approximately 14 years old. The parties separated in September 2005, and they were divorced in March 2007. ¶ 6 The March 2007 judgment of dissolution incorporated the parties' marital settlement agreement and parenting agreement. Both parties waived maintenance. Cherie was to have residential custody of M.H. Michael, who had grossed approximately $550,000 in 2006 as an executive for a packaging company, was to pay child support according to the following downward sliding scale:

Amount Earned Gross	Percentage of Net	Amount Due
$0-$250,000	20%	$2596/month guaranteed
$250,000-$350,000	15%	$10,800/year if applicable
$350,000-$450,000	10%	$6900/year if applicable
$450,000-$500,000	5%	$2700/year if applicable
$500,000-$600,000	5%	$5400/year if applicable

Support from the last $100,000 bracket, representing $500,000 to $600,000 gross, would be deposited in a college fund. No support would be given for amounts earned over $600,000. Support would terminate at age 19 or upon graduation from high school, whichever occurred first. Support would also terminate if M.H. lived away from Cherie full time, such as in a boarding school, or if he married or joined the military. ¶ 7 In April 2009, Cherie petitioned to modify child support. She alleged numerous changed circumstances: (1) Michael's elder child had become emancipated, and Michael no longer paid child support for that child; (2) Michael's salary and bonuses increased; (3) M.H.'s expenses increased; and (4) Michael's visitation had been erratic, increasing daycare and other child-related costs and causing Cherie to miss opportunities, such as having to cancel a class in which she was enrolled. ¶ 8 Michael responded that Cherie "earns approximately $150,000 per year. The foregoing notwithstanding, [Cherie] s[eeks] an increase in child support." Subsequent discovery showed that at that time Cherie's salary was approximately $145,000 per year. ¶ 9 In June 2010, the trial court denied the petition. It did not increase support based on Michael's reduced obligations, increased bonuses, and increased travel. It modified child support slightly, however, due to a new base salary. It created the following downward sliding scale:

Amount Earned Gross	Percentage of Net	Amount Due
$0-$271,843	20%	$3043/month guaranteed
$271,843-$371,843	15%	$10,800/year if applicable
$371,843-$471,843	10%	$6900/year if applicable
$471,843-$521,843	5%	$2700/year if applicable
$521,843-$621,843	5%	$5400/year, if applicable

In other words, the court bumped up the gross base salary from which the guaranteed child support was calculated, from $250,000 to $271,843. This resulted in an increase of the guaranteed monthly payment from $2596 to $3043. As will become important on appeal, this $3043 per month represented 20% of Michael's guaranteed net income at the time, which must have been $182,000 per year ($3043 x 12 months is $36,516 per year, which is 20% of $182,000). The court continued with a downward sliding scale for the next $350,000 in bonuses, just as it had before. (The court inverted certain numbers, such as $10,080 instead of $10,800. We kept the numbers as originally ordered. On appeal, Cherie argues for only the $3043 per month guaranteed, so it is not essential that we resolve the discrepancy.)

Any money remaining in the college fund upon M.H.'s graduation from college or at age 25, whichever occurs first, will be distributed to him. If the college fund is insufficient, then college expenses will be paid 65% by Michael and 35% by Cherie. --------

¶ 10 A. Michael's Petition to Modify and the Hearing

¶ 11 In December 2015, Michael petitioned to reduce child support, based on his December 2014 termination and $1.4 million in severance payments ending that month. He would, however, continue to receive $83,000 per year in deferred compensation through the end of 2017. He attached a signed financial statement. He acknowledged that Cherie had recently lost her job. And, he pleaded that their son had increased needs, which included a diagnosis of attention deficit hyperactivity disorder (ADHD) and sensory deprivation disorder. However, this special-needs issue was resolved in a separate settlement concerning reallocation of decision-making authority and parenting time. (The new parenting agreement shows that Cherie continues to be the residential custodian.) Various events, such as Cherie's continued unemployment and the aforementioned negotiations over decision-making authority, delayed the hearing on the December 2015 petition to modify support. ¶ 12 Thus, in mid-2016, Michael filed an amended petition to reduce support. In conjunction with this petition, he attached an updated signed financial statement, dated April 2017. The April 2017 statement detailed Michael's income, assets, and expenses. It was admitted into evidence at the April 2017 hearing.

¶ 13 1. Evidence of Michael's Financial Resources

¶ 14 In his 2017 statement, Michael represented that his 2016 income had been $129,000. This did not include a virtually tax-free $400,000 withdrawal from a retirement account, which we will detail below. Michael further represented that his gross income for the first quarter of 2017 had been $91,517, on pace for over $360,000 per year. Also, and somewhat inconsistently, Michael stated that his gross income was $8677 per month. This included a $2641 pension benefit, $5416 in investment income, $600 in rental income from an Oswego rental property, and $20 in other dividends. He took $5205 in required deductions. This included state and federal income tax, but, given his age and/or employment status, not FICA, Medicare tax, or retirement contributions. It also included the $3043 support payment at issue. He did not list the $83,000 in deferred compensation that he had been awarded as part of his severance package. ¶ 15 Michael's assets included three homes. He owned one home in Naperville, where he resided much of the year. The Naperville home was valued at $375,000, and it had a remaining mortgage of $104,000. He owned a vacation home in Bozeman, Montana, which he visited often. The Bozeman home was valued at $775,000, and it had a remaining mortgage of $368,000. Finally, he owned the rental property in Oswego, which he paid for in 2016 with $161,000 cash. There was no remaining mortgage. Additionally, Michael owned two cars: a 2014 Audi, valued at $35,000 and with a remaining balance of $15,000, and a 2011 Ford F150, valued at $18,000 and with no remaining balance. 2016, the total value of his retirement and nonretirement brokerage accounts fell by only $215,000 that same year, from $2.8 million to $2.585 million. ¶ 26 Michael testified to his termination and ultimate retirement. In 2014, new management took over his company, and on December 31, 2014, he was involuntarily terminated. The company referred to the involuntary termination of senior executives like himself as retirement. Indeed, as a matter of pride, he preferred to tell people that he was retired, rather than terminated. He also told Cherie in a January 2015 e-mail that he was "fully retired," the context being that he wanted to inform her that he had more free time to spend with their son. Nevertheless, he did try to find new employment consistent with his skill and experience. A noncompete clause somewhat limited his search. His initial resume indicated that he sought only a high-level executive or consulting position. His resume specified that he sought contact only with a prospective company's high-level personnel, such as its CEO or COO. He soon learned that, at his age, the positions offered were for consultants. He did not continue to send out resumes. At his level, networking was the better approach. He worked with an executive recruiter and went on 10 interviews. However, as of the 2017 hearing, then age 64, he had not found new employment. The process was discouraging, and his job log showed many months with no search activity. He believed that the likelihood of finding a significant position in the future was extremely low. ¶ 27 Finally, Michael testified that M.H. participated in three extracurricular activities: hockey, cross-country, and orchestra. Previously, M.H.'s hockey cost approximately $8000 per year. However, he had since joined a less competitive league, which cost approximately $3000 per year.

¶ 28 2. Evidence of Cherie's Financial Resources

$350 for extracurricular lessons; $250 for vacations; $180 for summer camps; $125 for education-related expenses, such as school-sponsored events, lunches, and books; $190 for clothing and grooming; $75 for entertainment; $25 for gifts for others; $45 for M.H.'s cell phone; $60 for sports equipment; $100 for childcare; and $50 for allowances. Cherie took M.H. on one nice vacation per year, such as to a resort in the Bahamas. Other trips throughout the year were more modest, such as remaining in the Midwest.

¶ 36 3. The Trial Court's Order

¶ 37 In September 2017, the trial court issued its decision. The court granted Michael's petition to modify, reducing Michael's support amount from $3043 to $1700 per month, retroactive to January 1, 2017. It relieved Michael of any responsibility to pay for ordinary medical expenses. Cherie would bear sole responsibility for ordinary medical expenses, and the parties would split extraordinary medical expenses. The court also capped Michael's contribution to extracurricular activities at $3500 per year. Thus, absent an extraordinary medical event, Michael's maximum child-support contribution would be $23,900 per year. ¶ 38 The court acknowledged that M.H.'s needs had increased since 2010, due to his age. Nevertheless, it determined that there had been a substantial change in circumstances justifying a reduction of the support award, due to Michael's change in employment status and reduced income. ¶ 39 In setting the new support amount, the court found that Michael's 2017 section 505 net income was approximately $78,000 per year, composed of $30,000 to $40,000 in dividends and interest, $31,692 in pension income ($2641 per month), and $7200 in rental income from the Oswego property. The court did not include Michael's $83,000 in annual deferred compensation. Also, the court did not include any of Michael's $400,000 retirement-account withdrawal. It reasoned that, per In re Marriage of McGrath, 2012 IL 112792, ¶ 14, accessing one's assets cannot constitute income for purposes of child support. Turning to the estimated $78,000 per year, the court noted that it was mostly tax free or low tax. The 20% guideline amount for the $78,000 was $1300 per month. The court acknowledged that, given Michael's $2.5 million in assets, $1300 per month would not provide the child with a standard of living close to that which he would have had if the marriage had not been dissolved. So, the court issued an upward deviation, bringing the total to $1700 per month. ¶ 40 The court found it understandable that Michael had traveled so much in 2015 and 2016, given that he had just received a $1.4 million severance. However, the court "found it difficult to believe" that this kind of spending would continue. ¶ 41 The court rejected Cherie's position that Michael should draw upon his $2.5 million in assets, and the interest earned from it, in order to keep the child support at $3043 per month. The court stated:

"Assuming [Michael's] income is now only $78,000 per year, Michael would be required to draw down his assets in the amount of $193,000 per year in order to equal the $271,000 annual income upon which child support was based. Assuming he lives for another 20 years, till age 84, this would require a sum of $3,860,000. Michael does not have this sum available. In addition, it would assume that Michael wants to leave $0 in his estate for his heirs. To require, or to impute to someone the requirement that they regularly draw on their assets until liquidated, when they are not actually currently engaged in doing that, is speculative and not supported by the facts."

¶ 42 Finally, the court made the following findings of fact to support its decision. Michael was unlikely to obtain employment, considering his age and salary history. On the other hand, "Cherie's income has increased significantly." She earns $135,000 but chose to remain unemployed for 20 months: "Cherie intentionally did not seek employment, because she wanted to focus on the needs of [M.H.]" Both parties have traveled extensively and extravagantly with M.H. Michael has assets of approximately $2.5 million. Cherie has assets of approximately $1 million. The expenses exclusive to M.H. are $3435 per month, as agreed by the parties (Michael's $1700 obligation comprising one-half that amount).

¶ 43 B. Cherie's Motion to Reconsider

¶ 44 Cherie moved to reconsider, and in December 2017 the court heard argument. Acknowledging a split of authority, she argued, inter alia, that the $400,000 withdrawal from a retirement account was income for the purposes of setting child support. See In re Marriage of Lindman, 356 Ill. App. 3d 462, 466 (2005) (Second District) (IRA withdrawals were section 505 income). But see In re Marriage of O'Daniel, 382 Ill. App. 3d 845, 850 (2008) (Fourth District) (IRA withdrawals were not section 505 income). ¶ 45 The court disagreed that the withdrawal should be counted as income. It stated that Michael had accumulated that asset in the past and now was simply drawing on it. The court did not believe that a distinction should be made between withdrawals from an IRA, a mutual fund, or a checking account. Moreover, this was not a periodic payment; it was a one-time occurrence. The court allowed that perhaps an IRA withdrawal could be treated as income, but only if it was used to pay for everyday living expenses, such as for a mortgage, a car, or food. "You can't avoid child support by saying, hey, I have no income but I am living off my assets." However, "if he pulls the money out for a one-time expenditure to go to Europe, that is not a monthly living expense, so why would I consider that as his income?" The court stated that "there was no evidence that [Michael] was living off his assets." ¶ 46 Cherie responded that, in McGrath, the supreme court expressly distinguished between withdrawals from an IRA and withdrawals from a savings account. McGrath, 2012 IL 112792, ¶ 10 n.2. It held only that withdrawals from a savings account were not income, declining to address whether withdrawals from an IRA were income. Id. This left Lindman, which held that IRA withdrawals were income, to control this case. And, Lindman specifically held that an IRA withdrawal need not be periodic or recurring to count as income. Also, Cherie disagreed that a party's use of an IRA withdrawal dictated whether it should be counted as income. Michael's use of an IRA withdrawal for lavish vacations showed only that he continued to live a lavish lifestyle. This weighed in favor of maintaining the $3043 support amount, not against it. ¶ 47 Michael added that, although the withdrawal came from a retirement account, it did not specifically come from an IRA. Rather, it came from a retirement annuity. ¶ 48 The court agreed with Michael that, whatever the nature of the $400,000 withdrawal, it already belonged to him. It was not new money. It was not income, and it could not be used to calculate the support amount. The court denied the motion to reconsider. This appeal followed.

¶ 49 II. ANALYSIS

¶ 50 Cherie challenges the trial court's decision to reduce child support to $1700 per month. She argues that Michael failed to establish that a substantial change in circumstances warranted a reduction of the $3043 support amount, which had been based on a net income of $180,000 per year. Accordingly, she asks this court to reinstate the 2010 award. She also argues that, even if there was a substantial change in circumstances, the statutory factors support the $3043 support amount. She asserts that Michael's net income was much higher than the $78,000 that the court determined, because the court forgot to include the $83,000 in deferred compensation and to account for the $400,000 withdrawal from the retirement account. And, finally, she argues that, apparent or when the court's findings appear to be unreasonable, arbitrary, or not based on evidence. Eberhardt, 387 Ill. App. 3d at 233. ¶ 52 Before engaging in a traditional modification analysis, we address Cherie's arguments that the trial court erred in failing to include as income, or otherwise account for, Michael's $83,000 in deferred compensation and $400,000 retirement account withdrawal. Addressing these issues up front will make it easier to determine whether Michael has suffered a substantial change in circumstances that warrants the reduction of his support obligation and, if necessary, to determine Michael's net income, the guideline amount, and any deviation from the guideline amount.

¶ 53 A. Section 505 Income

¶ 54 Section 505(a)(3) broadly defines net income as "the total of all income from all sources, except" certain specified deductions, such as federal and state income taxes, social security payments, mandatory retirement contributions, union dues, individual and dependent insurance premiums, prior obligations of support or maintenance, and expenditures for the repayment of certain debts. 750 ILCS 5/505(a)(3) (West 2016); see Rogers, 213 Ill. 2d at 136. Definitions of income accepted by our supreme court include: (1) " 'something that comes in as an increment or addition ***[,] a gain or recurrent benefit that is usu[ally] measured in money ***[,] the value of goods and services received by an individual in a given period of time' " (Rogers, 213 Ill. 2d at 136 (quoting Webster's Third New International Dictionary 1143 (1986))) and (2) " '[t]he money or other form of payment that one receives, usu[ally] periodically, from employment, business, investments, royalties, gifts and the like' " (id. at 137 (quoting Black's Law Dictionary 778 (8th ed. 2004))). Under these definitions, a variety of resources that would not be taxable under the Internal Revenue Code will qualify as income for the purposes of child support. Id. A nonrecurring, one-time income source must be included in the court's computation of net income. Id. at 139. However, if the evidence shows that the parent is unlikely to continue receiving payment from that source, then the court may consider that when determining whether and to what extent a deviation from the guideline amount is appropriate. Id. If an income source stops earlier than anticipated, the obligor parent may seek a modification. Id. ¶ 55 Consistent with this understanding of income, courts have determined the following to constitute income under section 505(a)(3): (1) deferred compensation (Posey v. Tate, 275 Ill. App. 3d 822, 826 (1995)); (2) pension payments (People ex rel. Myers v. Kidd, 308 Ill. App. 3d 593, 596 (1999)); (3) a military allowance (In re Marriage of McGowan, 265 Ill. App. 3d 976, 978 (1994)); (4) a gift from parents (Rogers, 213 Ill. 2d at 137); (5) a lump-sum worker's compensation award (In re Marriage of Dodds, 222 Ill. App. 3d 99, 103 (1991); cf. Villanueva v. O'Gara, 282 Ill. App. 3d 147, 151 (1996) (the entire amount of a personal injury settlement should not have been included as income, where the settlement largely made the parent whole and did not increase his wealth)); and (6) IRA disbursements (Lindman, 356 Ill. App. 3d at 466 (Second District). But see O'Daniel, 382 Ill. App. 3d at 850 (Fourth District)).

¶ 56 1. Deferred Compensation

¶ 57 Deferred compensation is income for the purposes of determining child support. Posey, 275 Ill. App. 3d at 826. The trial court erred in failing to include Michael's $83,000 in deferred compensation when determining his 2017 income. Michael concedes this. Thus, as we proceed in our analysis, we do so with the understanding that Michael's net income is, at a minimum, $128,000 (taking the low estimate of the trial court's $68,000 to $78,000 range, adding $83,000 in deferred compensation, and subtracting $23,000 in tax obligations that are likely to come with the deferred compensation).

¶ 58 2. IRA Withdrawals

¶ 59 The question of whether IRA withdrawals constitute section 505 income is not so simple. Broadly, the Second District holds that they do. However, the case law is split. As noted, two cases specifically address whether IRA withdrawals constitute income for the purposes of child support: Lindman, from the Second District, and O'Daniel, from the Fourth District. ¶ 60 In Lindman, the trial court based the father's support obligation on an income of $80,000. Two years after the divorce, in addition to his $80,000 salary, the father received $75,000 in IRA disbursements. (The court did not clarify whether the father was of retirement age, withdrawing from his IRA without penalty.) Nevertheless, he obtained a court order reducing his support obligation. (The court did not explain why.) Three years after the divorce, the father lost his job due to alcohol abuse. That year, in addition to approximately $40,000 in partial salary, he received $80,000 in IRA disbursements. The next year, the court reinstated the original support amount, finding that the IRA disbursements had constituted income. Therefore, his income was $120,000 and there was no reason why he could not pay the original support amount, which had been based on an $80,000 salary. ¶ 61 This court affirmed, agreeing that the IRA disbursements constituted income for child-support purposes. Lindman, 356 Ill. App. 3d at 466. We explained:

"We see no reason to distinguish IRA disbursements from [other monies that have been labeled income, such as deferred compensation, worker's compensation awards, military allowances, and pensions]. Like all of these items, IRA disbursements are a gain that may be measured in monetary form. [Citation.] Moreover, IRA disbursements are monies received from an investment, that is, an investment in an IRA. [Citations.] Thus, given its plain and ordinary meaning, 'income' includes IRA disbursements." Id.

We further held that it did not matter whether the disbursements were recurring. Id. at 467. Should the disbursements stop or lessen, the father could petition to modify the support award. Id. at 468. ¶ 62 Separately, we acknowledged that, in a future case, a court could be called upon to determine what percentage of an IRA withdrawal should be counted as income. Id. at 470. We would not address it there, however, where the father did not raise a concern of "double counting." Id. ¶ 63 Next, in O'Daniel, the father suffered two periods of unemployment over a two-year period. During each of those periods, he withdrew approximately $50,000 from his IRA to pay his living expenses, mortgage, and child-support obligation. At the beginning of the first period, the father petitioned to modify his support obligation, based on his unemployment. At the hearing, he argued that the trial court should not consider his IRA withdrawals as income, because, as in a savings account, he had already accumulated those funds. The trial court agreed and, accordingly, reduced the support amount from approximately $1000 per month to $750 per month. ¶ 64 The appellate court affirmed, agreeing that the IRA withdrawals were not income. O'Daniel, 382 Ill. App. 3d at 850. The court explained:

"IRAs are ordinarily self-funded by the individual possessing the retirement account. Except for the tax benefits a person gets from an IRA and the penalties he or she will incur if he or she withdraws the money early, an IRA basically is no different than a savings account, although the risks may differ. The money the individual places in an IRA already belongs to that individual. When an individual withdraws money he placed into an IRA, he does not gain anything as the money was already his. Therefore, it is not

a gain and not income. The only portion of the IRA that would constitute a gain for the individual would be the interest and/or appreciation earnings from the IRA.
[The mother] does not state in her brief what portion of [the father's] IRA was made up of his contributions. As a result, we cannot say what portion of [his] withdrawals might have constituted income for child-support purposes." Id.

¶ 65 We are not convinced that Lindman and O'Daniel are in absolute conflict. Lindman stated that IRA withdrawals are income, after subtracting for "double counting." (It did not consider "double counting," because the appellant did not raise the issue.) O'Daniel stated that IRA withdrawals are not income, except for that portion representing interest and appreciation. (It did not consider interest and appreciation, because the appellant did not raise the issue.) Thus, both Lindman and O'Daniel allow for the possibility that a portion of IRA withdrawals would constitute income. ¶ 66 Lindman stated that double counting would occur if earnings deposited into IRA were counted as income both in the year they were deposited and in the year they were withdrawn. Lindman, 356 Ill. App. 3d at 470. To avoid that double counting, the court might have to determine what percentage of the IRA was considered income in the year it was deposited and discount that amount from the calculation of income in the year of withdrawal. Id. The Lindman court detailed a double-counting hypothetical where the father contributed to and withdrew from the IRA during years that he was paying child support. However, we did not preclude the double-counting scenario set forth in O'Daniel. The double-counting scenario set forth in O'Daniel was broader. O'Daniel excluded as income not only what had already been documented as income in a prior support year, but anything that was not new growth, interest, or appreciation. O'Daniel, 382 Ill. App. 3d at 850. hearing and it reflected his circumstances at the time of the hearing. Having assessed the relevance of the $83,000 in deferred compensation and the $400,000 IRA withdrawal, we proceed to the substantial-change analysis.

¶ 78 B. No Substantial Change in Circumstances

¶ 79 A substantial change in circumstances typically means that the child's needs, the obligor parent's ability to pay, or both have changed since the entry of the most recent support order. See, e.g., In re Marriage of Pylawka, 277 Ill. App. 3d 728, 731 (1996). Here, Michael conceded in his pleading that M.H.'s needs have increased since 2010 due to M.H.'s medical issues and expenses. As set forth in the parties' financial statements, as much as $1000 per month in M.H.'s medical costs were not covered by insurance. And, per the trial court's order, Michael would not contribute to ordinary medical costs. This means that a significant portion of the support award would go toward medical costs. The trial court agreed that M.H.'s needs presumably have increased since 2010 because he has grown from a young child to an early adolescent. Also, Michael acknowledged that Cherie endured 20 months of unemployment. It is within this context that Michael pleaded a reduced ability to pay, based on a change in his employment status. As the petitioner, Michael had the burden to show that the change in his employment status resulted in an economic reversal sufficient to constitute a substantial change in circumstances, warranting a reduction of support, even in the face of M.H.'s increased needs. No reasonable person could have found that Michael met his burden. In fact, the evidence supports the opposite conclusion, i.e., that Michael has the means to continue to meet his $3043 monthly support obligation without risking his financial security in retirement. ¶ 80 Broadly, the trial court based its substantial-change determination entirely on Michael's change in employment status and reduced income. While these are important factors, they are $2.585 million). The record shows these accounts to have grown by a far higher percentage, more than 7%, in less than one year, whether Michael chooses to draw upon the growth or not ($185,000 is more than 7% of $2.585 million). Each year of full payment constitutes less than 20% of the portfolio's growth ($36,516 is less than 20% of $185,000). The disputed portion constitutes less than 9% of the portfolio's growth ($16,116 is less than 9% of $185,000). In other words, in the snapshot of time presented, and setting the issue of taxes aside, Michael was being asked to use 20% of his portfolio's growth to pay child support, without ever dipping into the principal of his vast retirement assets and while being able to reinvest the remaining 80% of the growth. Payment of the full support amount, even if paid through the withdrawal of funds alone, would not lead to the depletion of assets. No rational person would conclude that payment of the full support amount would jeopardize Michael's financial security in retirement. ¶ 98 In light of these factors, the evidence does not support that Michael suffered a substantial change in his financial resources that decreased his ability to satisfy the full support amount. Because we have held that there was no substantial change in circumstances to warrant a reduction in child support, our analysis could end here. However, we choose to explain why, even if Michael's retirement constituted a substantial change in circumstances, the statutory factors support the $3043 award.

¶ 99 C. The Statutory Factors Support the Original $3043 Award

¶ 100 The first step in setting the support amount is determining the supporting parent's net income. As we have discussed, Michael's net income is, at a minimum, $128,000, with a 20% guideline support amount of $2133 per month. If even a small portion of the $400,000 withdrawal can be categorized as net income, we are at the original $180,000 net income amount, upon which the $3043, 20% guideline award was based. Again, no further analysis is needed. ¶ 101 Even if the $400,000 withdrawal cannot be categorized as income, we still must consider whether the statutory factors unquestionably warrant an upward deviation from the guideline amount. Here, the statutory factors call for an upward deviation. We consider the needs of M.H. and the financial resources of Cherie and Michael. Upon review of each of these factors, we conclude that the trial court erred in its analysis and abused its discretion.

¶ 102 1. The Needs of M.H.

¶ 103 First, we consider the educational, physical, mental, and emotional needs of M.H., as well as the standard of living M.H. would have enjoyed had the marriage not been dissolved. As to this factor, the court determined that costs exclusive to M.H. were $3435 and that this amount was more than sufficient to meet M.H.'s needs. Its $1700 support order essentially split the burden of the costs exclusive to M.H. This contribution is insufficient when one considers that Michael's effective share of M.H.'s ordinary medical expenses will account for $500 of that amount and leave just $1200 per month to contribute to M.H.'s other needs. Moreover, M.H.'s other needs include more than those costs exclusive to him, and the court erred when it considered only those costs. ¶ 104 Child support is not limited to the child's demonstrated needs. In re Marriage of Osborn, 206 Ill. App. 3d 588, 604 (1990). Rather, the court may issue an award in excess of the child's needs or in deviation from the guideline amount, if it is necessary to enable the child to enjoy the standard of living he would have enjoyed had the marriage not been dissolved. Id. Even more to the point, the court must consider expenses beyond those exclusive to the child, such as household and transportation expenses from which the child benefits. I.I., 2016 IL App (1st) 160071, ¶ 54. In I.I., the court ordered that the noncustodial father contribute $3000 per month to support the child. It acknowledged that expenses exclusive to the child were only $1500 per month. However, household expenses were $1900 per month and transportation expenses were $500 per month. The court explained:

"Child support is intended to 'provide for the reasonable and necessary educational, physical, mental and emotional health needs of the child.' [Citation] A child is not expected to live without a roof over his head or with no way to travel from place to place. Thus, even based on the disclosure alone, the expenses eligible for child support would include more than the $1497 asserted by respondent." Id.

¶ 105 Here, the lifestyle that M.H. would have enjoyed had the parties stayed married certainly would have included the option of a middle-class family home in an affluent suburb (if not its big-city equivalent). Per Cherie's testimony, that is exactly what she provided for her son. First, she provided a family home in Glen Ellyn. She sold that home in 2016. Hoping to buy into the Naperville school district, Cherie was currently renting a home for $2900 per month in Lisle. On top of rent, she incurs lawn-care costs and utilities. The home is big enough to host her mother more than two-thirds of the year, who helps care for M.H. Cherie pays her mother a nominal $100 per month. Cherie's mother owns her own home in Michigan, so the housing is not a windfall to her. To the contrary, allowing M.H., an only child, to have his grandmother in the home while his mother works necessarily adds warmth, companionship, and loving supervision to his childhood experience. Thus, while the parties might have agreed to $3435 in expenses exclusive to M.H., the court must also consider the costs of running a comfortable household, from which M.H. benefits. Cherie, the residential custodian, incurs over $5000 in costs to run her household, including groceries and transportation costs, and the court erred in failing to consider any of these costs.

¶ 106 2. Cherie's Financial Resources

¶ 107 Next, we turn to the financial resources of the custodial and noncustodial parents. We begin with the custodial parent, Cherie. Cherie earns $135,000 per year and the record indicates that her highest income has been $150,000 per year. Cherie does not receive maintenance, and no spouse contributes to her household income. She has also endured 20 months of unemployment, during which time she did not seek to increase child support but, rather, lived off of her savings. ¶ 108 The court determined that Cherie's income had substantially increased. She earns $135,000 per year, but she chose to remain unemployed for 20 months: "Cherie intentionally did not seek employment, because she wanted to focus on the needs of M.H." Further, the court stated that Cherie traveled extensively and extravagantly with M.H. and had assets of approximately $1 million. Aside from an accurate statement of Cherie's salary, the court's characterizations are not supported by the evidence. Thus, the court's conclusion that Cherie and Michael are equally situated so as to bear an equal burden in supporting M.H. is erroneous. ¶ 109 The record refutes that Cherie's income had substantially increased since the last support order. In 2010, she earned $145,000. In 2017, she earned $135,000. Also, the record refutes that Cherie did not seek employment. Rather, Cherie testified that she did seek employment but was selective because M.H. was her first priority: "Well, I was looking for an opportunity, but [M.H.] was a child that was in pretty big distress [due to his behavioral diagnoses], [and M.H. was traveling 45 minutes each day to reach a school that met his needs], *** so I looked for things that could get him through, and I could be able to care for [M.H.] during that time. But I used my savings and things like that to subsidize my income, and [I could afford to be discerning because I had saved for a time like this]." Indeed, Cherie was M.H.'s primary caregiver, and Michael's credit card statements showed him to be traveling to different locations around the world during Cherie's period of unemployment. ¶ 110 On the topic of travel, nothing in the record supports the trial court's finding that Cherie traveled extensively and extravagantly with M.H. Cherie testified without contradiction that she went on one nice vacation per year. She always took M.H. Most recently, they went to an all-inclusive resort in the Bahamas, which cost $5000. In the past 12 years, Cherie has also gone to the Caribbean (2014), Alaska (2008), Italy (date unclear), and Salt Lake City (date unclear). Taking five notable vacations in 12 years is fortunate, but it cannot be called extravagant. This is in keeping with the lifestyle M.H. would have enjoyed had the parties not dissolved their marriage. It is Michael who traveled extensively and extravagantly, though generally without M.H. ¶ 111 Finally, we put into context the trial court's statement that Cherie had $1 million in assets. Approximately $860,000 of this is held in retirement accounts that cannot be accessed without penalty. An additional $145,000 is held in a checking account to be used as a down-payment on a home. Cherie does not have the liquidity that Michael enjoys. Cherie does not own a home, and she owns one car valued at $11,000. While Cherie earns a comfortable $135,000 per year, every dollar of her budget is accounted for in a predictable, responsible, and nonextravagant manner.

¶ 112 3. Michael's Financial Resources

¶ 113 We next turn to the financial resources of the noncustodial parent, Michael. Unlike Cherie, Michael's finances are not straightforward, and we have discussed Michael's finances at length elsewhere in our analysis. We recap, however, that prior to retiring, Michael had a decade-long history of earning in the range of $500,000-plus per year. Entering retirement, Michael had $2.8 million in his brokerage accounts. Despite withdrawing $400,000 in retirement funds in 2016, his accounts fell in value by only $215,000 in 2016, to $2.585 million, indicating that the value of the accounts continued to grow passively by $185,000 in less than one year. He can access these funds without penalty as he chooses. Michael also owns three homes and two cars. Michael spent at a rate of $230,000 per year in the months preceding the hearing, including $60,000 per year on travel and $40,000 per year on gifts. ¶ 114 Indeed, Michael lives extravagantly. However, contrary to the trial court's statement, Michael does not travel extensively and extravagantly with M.H. He took M.H. to Washington D.C., as an educational trip; to Florida to visit M.H.'s half-brother; and to Montana, where he lived for much of the year, thus constituting a hybrid between travel and ordinary visitation. No reasonable person would characterize as extravagant Michael's domestic travel with M.H. to visit family and to spend time at his residence. ¶ 115 As a final point, we note that the trial court demonstrated that it misunderstood the effect that maintaining the $3043 support amount would have on Michael's security in retirement. The trial court rejected Cherie's position that Michael should draw upon his $2.5 million in assets, and the interest earned from it, in order to keep the child support at $3043 per month. The court stated:

"Assuming [Michael's] income is now only $78,000 per year, Michael would be required to draw down his assets in the amount of $193,000 per year in order to equal the $271,000 annual income upon which child support was based. Assuming he lives for another 20 years, till age 84, this would require a sum of $3,860,000. Michael does not

have this sum available. In addition, it would assume that Michael wants to leave $0 in his estate for his heirs. To require, or to impute to someone the requirement that they regularly draw on their assets until liquidated, when they are not actually currently engaged in doing that, is speculative and not supported by the facts."

The court's logic is flawed and greatly exaggerates Michael's purported burden. First, withdrawing money typically has a net value, and the court is working in gross values. Second, the withdrawal amount need not bring Michael to a total that would result in a guideline amount of $3043. Cherie's point in this portion of her argument was that the court should deviate upward from the guideline amount. Third, keeping child support at $3043 will not require Michael to liquidate $2.5 million in assets to $0. Paying $3043 per month, as opposed to $1700 per month, is a difference of $16,116 per year. Paying $3043 per month, as opposed to $2133, the true guideline amount after accounting for the forgotten $83,000 in deferred compensation, is a difference of $10,916 per year. That is the amount that Michael would withdraw, not $193,000. Fourth, the value of the accounts is not static. Withdrawing $10,916 per year will not cause the accounts to lose value by $10,916 per year. In 2016, Michael withdrew $400,000, but the accounts lost only $215,000 in value. Fifth, the $10,916 withdrawal will not continue for 20 years. The question is not how much longer Michael will live but how much longer he will be obligated to pay child support. M.H. was 12 or 13 years old in 2017, and the original judgment of dissolution mandated that payments "in no event" continue beyond age 19. Withdrawing $10,916 in the first year, and $16,116 per year after the deferred compensation ends, equates to $107,612 over six years against accounts that have generated six-figure growth in less than one year. The court's understanding of Michael's financial resources, and of the impact that full payment of his child-support obligation would have on those financial resources, is, again, flawed.

¶ 116 III. CONCLUSION

¶ 117 Contrary to the trial court's assessment, and as we have stated, well-funded retirement accounts are meant to finance one's life, and existing obligations are part of one's life. Traditional earned income is expected to be lower in retirement, but this should not result in a presumption that there has been a substantial change in economic fortune resulting in a decreased ability to pay child support. Just as income decreases, a countervailing shift in financial goals occurs. The focus shifts from work, traditional income, and savings to passive income, passive growth, and measured withdrawals. The petitioner must prove, based on his unique circumstances, that his financial position in retirement renders him less able to pay the full support amount. Michael failed to do so. Because the trial court abused its discretion in modifying the support amount, we need not consider whether any modification should be applied retroactively. ¶ 118 For the reasons stated, the judgment of the circuit court of Du Page County is reversed and the 2010 award of child support is reinstated. ¶ 119 Reversed.