Appeal from the Circuit Court of Cook County; the Hon. Charles
Grupp, Judge, presiding.
JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
Petitioner, Barbara Reib, appeals from those portions of the judgment for dissolution of marriage pertaining to the award to her of marital property and maintenance. Petitioner contends that (1) the trial court failed to value the parties' assets properly, and (2) the award of maintenance set by the trial court was inadequate.
Barbara and William Reib were married on March 28, 1954. Two children were born of the marriage, both of whom are now adults, and two children were adopted, both presently minors. In November 1979, Barbara filed her petition for dissolution of marriage. In December 1980, after a hearing, the court entered an order finding grounds to dissolve the marriage and reserving the remaining issues for future determination. Thereafter, a contested custody hearing was held, after which the trial court awarded custody of the two minor children to William.
At the subsequent trial relating to division of property and the award of maintenance, the following relevant evidence was adduced:
William Reib testified that, at the time of his marriage, he individually owned various savings accounts and securities, and with his father he owned a partnership enterprise. However, he could not place a value on any of these assets.
In 1959, William and his father formed an insurance agency, Reib and Reib, Inc. At that time, William's father owned a percentage of the shares. William subsequently purchased all of his father's shares and now owns 100% of the business. The corporation does not have any employees, since individuals who work for the agency perform services only for specific clients. The clients pay salaries directly, and the salary payments are deducted from the commissions and fees that the corporation earns.
The corporation's 1979 income tax returns revealed that it had total assets of $1,965,924 and retained earnings of $299,914, an increase of approximately $44,000 from the prior year. For 1979, the corporation declared total receipts of $231,762. From this, deductions of $186,700 were claimed, including $98,041 in commissions, sales promotions of $10,473, and $8,752 for leasing a Mercedes-Benz driven by William. Thus, the agency had a net taxable income of $45,062 in 1979.
The parties' 1979 joint income tax return declared total taxable income of $107,944 and income taxes due on that income in the amount of $17,065. The Schedule C income of $137,941 was derived from commissions and management fees. From this, William deducted $49,358, for a net profit of $88,583. William deducted $26,889 in expenses for travel, entertainment, meetings, lunches, dinners, and telephone. William also earned a one-time fee of $36,000 from Main Insurance Company, a subsidiary of Mainway Financial Corporation, which is wholly owned by William through Reib and Reib. In 1979, William "borrowed" $9,000 from Reib and Reib, which was not declared as income. At the end of that year William owed the agency a total of $119,242.
In 1972, William obtained two loans from the North Bank in the amount of $500,000 in order to purchase the stock of Mainway Financial Corporation. These loans have a current outstanding balance of $191,927. Various securities are pledged for the loans, including 8,333 shares of Mainway stock, 7,002 shares of Executive Life Insurance of New York, 332 shares of Weyerhauser Company, and 824 shares of Mid-America National Bank of Chicago. A third loan at the North Bank, obtained by Reib and Reib, Inc., and personally guaranteed by William, has a current balance of $168,034 and is secured by 19,678 shares of Mainway stock.
In addition to the stocks pledged to the North Bank, William also owns three shares of IBM stock, $5,000 in other stock that had been held jointly with his mother and father, and a 4.5% interest in Peter Morton's Father's Place, Inc., valued at $27,000.
William holds $60,000 in United States government bonds, which have been pledged as collateral for a letter of credit with Lloyd's of London. The letter of credit is in connection with his participation in an insurance underwriting syndicate for Lloyd's of London. The interest that he receives from the government bonds is credited to an account maintained for him. Through the Banker's Trust Company, he has a percentage interest in a special Lloyd's of London reserve fund held in the Cayman Islands. In 1979, William earned $5,600 in interest income from the bonds, and $15,430 from Lloyd's of London.
In 1968, the marital residence, located in Wilmette, Illinois, was purchased. The appraised value of the home at the time of trial was $300,000, with an outstanding indebtedness of $118,854. Of this indebtedness, $48,000 had been borrowed in 1976, but only $8,000 of this amount was used for remodeling the residence. Most of the funds were used for personal expenses and the purchase of $24,000 in government bearer bonds. William testified that the bonds were a gift to the four children, but were kept by him in a safe deposit box at a bank.
William established a Keogh retirement account, which has a current balance in excess of $37,600 and which matures in 1983. Since William is over 59 1/2 years of age, there are no income tax penalties for withdrawal of these funds.
In 1981, William executed an installment note, payable to DeNovo Enterprises, in the amount of $24,278. In addition, he is currently in litigation with Exchange National Bank over a note personally signed by him for the sum of $42,500.
In 1978, William's mother had purchased a one-bedroom condominium at 100 East Walton in Chicago for $54,000. This property had been placed in trust, with Williams having a one-fifth interest and holding the remaining four-fifths as trustee for the four children. The apartment was occupied by William's mother until her death in 1980, and is presently vacant.
William is the executor of his mother's estate and the sole trustee of 26 trusts. The value of his mother's estate was $143,000, of which William is the lifetime income ...