Alimony

Relationship between Property and Alimony

So interrelated that the are referred to and being “two sides of the same coin”

What happens in one area will inevitably impact the other

In Florida, start with property, then move to alimony. Most states follow that rule, but perhaps less rigidly.

Award of alimony

Authorized by statute in every state Some states limit the type of alimony that can

be awarded or the circumstances under which it can be awarded

Also referred to as “spousal support” or “maintenance”

Types of alimony

Rehabilitative Permanent Reimbursement (more like a property award,

some states call this “alimony in gross)– Awarded to compensate for a property interest

that cannot be readily divided, such as an advanced degree

In FL, “Bridge the Gap” and “Lump Sum Support” alimony

Purpose of alimony

Needs/Ability to Pay: Meet needs of dependent spouse within the other spouse’s ability to pay

Standard of Living: Award should go beyond bare subsistence level of support to permit dependent spouse to have a standard of living similar to the years immediately preceding the divorce.

Considerations

Dependent spouse should not be required to liquidate property to support self

If there is inadequate income to maintain the two post-divorce households and the pre-divorce standard of living, each party must share in the reduced living standard

Paradigm Case for Alimony

Long-term marriage (25 years +) Recipient out of work force or with minimal

earnings Recipient age 50 or greater Adequate income for payor spouse to

support two households

Result in Paradigm case

Equal division of post-divorce income, work backward from there as facts depart from the paradigm

Equal division is rare in real world, even in strong cases, due to what is sometimes called the “mailbox postulate” – it is much harder to earn the income than to walk to the mailbox and pick up your check

- Larocque (Casebook)

Some states have threshold findings for alimony eligibility

Inadequate property for the support of the dependent spouse

Inability to support self through appropriate employment

Need to refrain from full-time work based on childrearing responsibilities

Alimony in Florida

Rehabilitative Permanent “Bridge-the-Gap” or Transitional Lump-sum support alimony

Rehabilitative Alimony in FL

The principal purpose of rehabilitative alimony is to establish the capacity for self support of the receiving spouse, either through the redevelopment of previous skills or through the provision of the training necessary to develop potential supportive skills. Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980)

Factors to consider in rehabilitative award

Earning ability of payor spouse. Feasibility of training payee spouse. Post-training capacity for self support in

marital standard of living (if long term marriage).

When rehabilitative vs permanent alimony?

Rehabilitative alimony is appropriate only where a spouse is able to gain the capacity for self-support within a finite period of time. Forster v. Forster, 436 So. 2d. 966 (Fla. 3d DCA 1983);

Bible v. Bible, 597 So. 2d 359 (Fla. 3d DCA 1992): 5 years rehabilitative not adequate after 25 year marriage.

Examples of rehabilitative alimony cases

Rehabilitative alimony is appropriate where a spouse has lost career opportunities during the marriage and requires time and money to reestablish career path. Kanouse v. Kanouse, 549 So. 2d 1035 (Fla. 4th DCA 1989)

Rehabilitative alimony is appropriate where the parties agreed that one of them would stay at home and care for the children. Green v. Green, 672 So.2d 49 (Fla. 4th DCA 1996)

Required Findings

The court must make specific findings of a rehabilitative plan and a termination date in order to support an award of rehabilitative alimony. Zelahi v. Zelahi, 646 So. 2d 278 (Fla. 2d DCA 1994); Roth v. Roth, 615 So. 2d 868 (Fla. 4th DCA 1993).

Permanent Alimony in FL

The purpose of permanent alimony is to provide for the needs and necessities of life for a former spouse as they were established during the marriage of the parties.

Permanent alimony is appropriate where the income of the spouse seeking alimony cannot support that spouse with the lifestyle established during the marriage. Webb v. Webb, 659 So. 2d 336 (Fla. 1st DCA 1995)

Factors to Consider

The criteria to be used in establishing this need include the parties‘:– Earning ability– Age– Health– Education– Duration of the marriage– Standard of living during the marriage– Value of the parties' estates

- Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980)

Permanent Alimony in Short Term Marriages

Short term marriages (generally less than ten years) – Permanent alimony is usually inappropriate unless a genuine inequity is created by the dissolution.

There is a rebuttable presumption against permanent alimony in short term marriages.

Examples

Income disparity not attributable to the marriage is not a factor to be considered in a short term marriage. Murray v. Murray, 598 So. 2d 310 (Fla. 2d DCA 1992); Cornell v. Smith, 616 So. 2d 629 (Fla. 4th DCA 1993)

Where a great inequity has been caused by the dissolution, permanent alimony may be awarded in a short term marriage. Driscoll v. Driscoll, 547 So. 2d 1247 (Fla. 4th DCA 1989); Simzer v. Simzer, 514 So. 2d 372 (Fla. 2d DCA 1987)

Middle Term Marriages

"Gray" area marriages (generally 9 -15 years) - The court must examine the factors in light of the evidence and without any presumption for or against permanent alimony, unless the parties agreed one parent would be a stay-at-home parent during the 9-16 years.

Long Term Marriages

Long term marriages (15 + years) - There is a presumption in favor of permanent alimony, unless the parties leave the marriage in comparable positions.

Considerations

Inability to be self-supporting due to lack of marketable skills combined with age/poor health requires permanent alimony. Bain v. Bain, 553 So. 2d 1389 (Fla. 5th DCA 1990); Moler v. Moler, 508 So. 2d 520 (Fla. 4th DCA 1987).

Disparity in income due to marital relationship is a basis for permanent alimony. Cloud v. Cloud, 586 So. 2d 492 (Fla. 1st DCA 1991).

More considerations

The court must consider all financial resources of the parties (total assets, total debts, and debts against assets including non-marital property and liabilities), not just their income., 263 So.2d 223 (Fla. 1972). Firestone v. Firestone

Portion of pension retained by payor spouse as part of equitable distribution of property at time of divorce may be considered as income in calculating the ability to pay alimony in post-divorce modification proceedings. Acker v. Acker, FL Sup Ct No. SC02-1925, 2005 Fla. LEXIS 693; 30 Fla. L. Weekly S 235, Decided April 14, 2005.

– But consider potential unfairness of this “double-dip”

Imputation of Income

Court may impute income to a spouse who is earning less than he/she could with the use of best efforts. Quinones v. Quinones, 870 So. 2d 108 (Fla. 2d DCA 2003); Ritter v. Ritter, 690 So. 2d 1372 (Fla. 2d DCA 1997)

However, there must be competent, substantial evidence supporting the conclusion that the spouse could earn the imputed amount. Hinton v. Smith, 725 So. 2d 1154, 1156 (Fla. 2d DCA 1998)

No need to dissipate assets for one’s support post divorce

Less affluent spouse should not have to dissipate capital assets for support. Henning v. Henning, 507 So. 2d 164 (Fla. 3d DCA 1987)

Consistent with general rule around the U.S.

“Bridge the Gap” or transitional alimony

Fla. Stat. § 61.08: Does not specifically authorize “transitional” or "Bridge-the-Gap“ alimony.

The 1st, 2nd, 3rd, and 4th District Courts of Appeal have allowed this form of alimony.

The Fifth District does not appear to allow this type of alimony. Martin v. Martin, 582 So. 2d 784 (Fla. 5th DCA 1991), but see Vick v. Vick, 675 So. 2d 714 (Fla. 5th DCA 1996).

“Bridge the Gap” Alimony

"Bridge the Gap" alimony is appropriate to allow a disadvantaged spouse to "transition" between being married and single. Iribar v. Iribar, 510 So.2d 1023 (Fla. 3d DCA 1987); Shea v. Shea, 572 So. 2d 558 (Fla. 1st DCA 1990); Borchardv. Borchard, 730 So. 2d 748 (Fla. 2dDCA 1999).

Considerations

Should be used to assist a spouse with legitimate, identifiable, short-term needs under such circumstances in which an award is reasonable and the other spouse has the ability to pay

Is not a compromise between opposing positions

2nd DCA special Bridge the Gap rules

The Second DCA approved the use of lump sum payments (which could be made as periodic payments) for this transition purpose.

Bridge-the-gap alimony must be awarded as a form of permanent lump sum alimony that does not terminate upon the death of the payor or the remarriage of the payee. Athey v. Athey, 849 So. 2d 333 (Fla. 2d DCA 2003)

Adultery as a factor in Alimony

Fla. Stat. § 61.08(1). "The court may consider the adultery of either spouse and the circumstances thereof in determining the amount of alimony, if any, to be awarded.“

But not as the only factor

A party's marital misconduct, standing alone, is not a valid reason to preclude an award of alimony unless the misconduct has depleted marital assets, or resulted in greater financial need. Mosbarger v. Mosbarger, 547 So. 2d 188 (Fla. 2d DCA 1989) (Wife's attempted murder of husband, for which she was convicted, did not preclude award of alimony to her based upon financial need); Eckroade v. Eckroade, 570 So. 2d 1347 (Fla. 3d DCA 1990); Noah v. Noah, 491 So. 2d 1124 (Fla. 1986).

Misconduct factors to consider

But only if related to depletion of assets or increased financial need:– Adultery– Drugs or Alcohol– Injury to spouse by other spouse– Sexually transmitted disease– Criminal conduct of alimony seeking spouse– Intentional tort– Bigamous marriage

Lump Sum Support Alimony

The payment of a definite sum by one spouse to the other for support

It may be an award of cash, property or payments to a third party

The award is final and vests in the receiving spouse It may be paid in a lump sum or in installments Lump sum alimony may be paid from a party's non-

marital assets in cases of special need

Factors to Consider

Same as for other forms of alimony, plus:– The requesting spouse brought assets to the marriage or

assisted in the acquisition of property. Thompson v. Thompson, 546 So. 2d 99 (Fla. 4th DCA 1989), remanded, 576 So2d 267 (Fla. 1991).

– The payor is financially able to pay a lump sum without substantially affecting his/her business or profession or she is unable to make periodic payments.

– A lump sum is necessary to provide recipient spouse with security against payor spouse's possible early demise or disability. Rosen v. Rosen, 386 So. 2d 1268 (Fla. 3d DCA 1980).

– Lump sum alimony would accomplish putting a definite end to the relationship between the parties.

Lump Sum Alimony for Equitable Distribution

More closely resembles property than alimony

Not subject to traditional analysis of alimony factors

When used?

Lump sum or installments may be ordered if there is justification and the economic status of the payor would not be substantially endangered.

Such an award, however, can generate several complex issues, including:

– How the award is taxed. Borchard v. Borchard, 730 So. 2d 748 (Fla. 2d DCA 1999)

– Whether the award is dischargeable in bankruptcy. Doerjlein v. Doerjlein, 724 So. 2d 153 (Fla. 5th DCA 1998)

– Whether the award is enforceable by contempt. Mattera v. Mattera, 629 So. 2d 1106 (Fla. 4th DCA 1994)

Modification of Alimony - Requirements

A substantial change in circumstances The change was not contemplated at the

time of final judgment of dissolution The change is sufficient, material,

involuntary, and permanent in nature

Pimm v Pimm, 601 So. 2d 534 (Fla 1992)

Restrictions on Modification

Modification allowed prospectively only Payments already accrued cannot be

retroactively modified

Cross-State Modification

States can modify orders from other states prospectively only (unless the original state permits retroactive modifications – few do)

Can’t retroactively cancel arrearages to date before petition for modification

Must have personal jurisdiction over the parties to modify other state’s alimony order

Sistare v Sistare, 218 US 1, 16-17 (1910)

Payor’s voluntary retirement as a factor for modification of alimony

Age Health Motivation for retirement The type of work the payor performs The age at which others engaged in that line

of work normally retire.

Double-Dip Problem

Is a pension awarded as an asset at the time of equitable distribution then to be considered as income for the purpose of alimony modification?

Issue arises when alimony payor retires and seeks to reduce or terminate alimony, but still has pension income from which he or she could pay alimony

In other words, can the same dollars be an asset at the time of divorce for the purpose of equitable distribution and then be transformed into income later when alimony modification is sought?

In Florida, Double-Dip May Be OK

Acker v Acker, FL Sup Ct No. SC02-1925, April 14, 2005:

– A court is permitted to consider a pension which has been equitably distributed to the payor in determining the payor's ability to pay alimony.

Is age 65 a “safe haven” for voluntary retirement?

It is “normal” retirement age, but; the court should consider the needs of the receiving

spouse and the impact a termination or reduction of alimony would have on him or her:

– In assessing those needs, the court should consider any assets which the receiving spouse has accumulated or received since the final judgment as well as any income generated by those assets (see Acker).

Effect of Cohabitation on Alimony

New language in FL Stat. § 61.14(1)(b) creates specific factors for court to consider when asked to terminate or reduce alimony upon recipient’s cohabitation (eff. 6-10-05) in those cases where alimony is terminable upon remarriage

Those factors focus on the financial impact of the cohabitation

Payor has burden of proving that a “supportive relationship” exists between recipient and the cohabitant.

Cohabitation factors in new statute

Holding out as married Length of cohabitation period Pooling of assets and income Mutual financial support Performance of valuable services for one another Working together to create something of value Joint contributions to purchase of real or personal

property Expressed or implied agreement concerning property or

support Support for one another’s children

Shifting presumption

Once support to or from the cohabitant is established, the burden shifts to the recipient to show continued need.

- Lee v. Lee, 544 So. 2d 1083 (Fla. 1st DCA 1989

Effect of Remarriage

Permanent periodic alimony automatically terminates upon the recipient’s remarriage. Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980).

But the remarriage must be a valid marriage, not just a de facto marriage. Buchan v. Buchan, 550 So.2d 556 (Fla. 5th DCA 1989). - This is the case that led to the new “termination upon cohabitation” statute

Effect of Death

Permanent periodic alimony generally terminates on the death of either spouse. Canakaris v. Canakaris, 382 So.2d 1197 (Fla. 1980).

On agreement of the parties, however, the final judgment may provide for alimony to continue after the death of the payor. Florida National Bank v. McCarthy, 547 So.2d 1239 (Fla. 2d DCA 1989).

Other states

Death of payor does not terminate alimony, but may be a factor in seeking modification.

Alimony becomes an obligation of the payor’s estate.– Flager v Flager, 190 Mich. App. 35; 475 N.W.2d

411 (1991)

Security for Payment of Alimony

Name recipient as beneficiary of a policy on the life of the payor.

Amount of death benefit should be equal to the present value of the stream of future alimony payments– Requires a decision about life expectancy - or

how long alimony will be paid if permanent periodic

– Requires selection of discount (interest) rate

Enforcement of Alimony

Contempt power of court available to enforce alimony

– Civil contempt: intended to coerce compliance with court orders

– Criminal contempt: punish party for past wrongdoing

Contempt generally not available to enforce property provisions of settlement or judgment in FL (La Roche v. La Roche, 662 So. 2d 1018 (Fla. 5th DCA 1995). Is allowed in many other states.

Civil Contempt

Must show that the respondent has the ability to comply with the order he/she has violated (ability to purge contempt)

Order of contempt must describe what the respondent needs to do to purge the contempt

Incarceration is generally for an indefinite period of time until contempt is purged

Criminal Contempt

Most of the procedural protections associated with a criminal trial apply

Sentence is for a fixed term as punishment for violation of the court’s order (or disrespect for the court’s authority)

Other enforcement mechanisms

Income withholding (similar to child support) Execution and garnishment of bank accounts

or assets Liens on property QDRO on retirement assets

– Not exclusively to divide pension rights– Can be used to enforce alimony or child support

Limitations on enforcement

Each installment of alimony is considered a judgment on the date it is due

Statute of limitations (typically 10 years) applies to each installment and may bar collection of installments due before the limitation period

Limitations periods often “tolled” if:– Respondent out of state during limitation period– Respondent makes payments toward the debt