Background
Cynthia and Talmage Raine divorced in 2009. The dissolution judgment required Talmage to pay monthly maintenance, a property settlement, and maintain life insurance. Subsequent agreed orders addressed unpaid maintenance and other obligations, including a 2018 judgment for maintenance arrearages, fees, and costs.
In 2024, the circuit court found Talmage in indirect civil contempt for willfully failing to make required arrearage and maintenance payments. After Cynthia discovered that Jackson National Life Insurance Company held $137,381.68 in Talmage’s variable annuity, she sought a turnover order. Talmage argued that the annuity was exempt from attachment as a qualified retirement plan.
The Court’s Holding
The Illinois Appellate Court, Third District, affirmed the turnover order. Although the annuity generally qualified for the retirement-plan exemption in sections 2-1402(b)(5) and 12-1006 of the Code of Civil Procedure, that exemption does not shield retirement assets from enforcement of maintenance arrearages and interest.
Section 15 of the Income Withholding for Support Act defines income to include annuity, pension, and retirement benefits and provides that contrary state or local exemption laws do not apply. Relying on longstanding Illinois authority, the court held that this creates an exception to the retirement exemption for child-support and maintenance obligations. It rejected Talmage’s arguments that maintenance should be treated differently from child support and that the exception applies only to distributed income rather than funds still held in a retirement annuity.
Key Takeaways
- A qualified retirement annuity is generally exempt from judgment enforcement, but not from collection of maintenance arrearages and related interest.
- The Income Withholding for Support Act covers both child support and spousal maintenance.
- The statutory exception reaches funds held in an annuity, not merely retirement payments already distributed to the account holder.
Why It Matters
The decision confirms that Illinois retirement-account exemptions do not provide a safe harbor from unpaid support obligations. Former spouses enforcing maintenance judgments may seek turnover of annuity and other retirement assets covered by the Act’s broad definition of income.
The court also declined to draw a timing-based distinction between retirement benefits held in an account and benefits already paid out, preserving a practical enforcement mechanism for support arrearages.