Times They Are A' Changin', or Are They? Alimony in a Changing Landscape
As I write this, the alimony landscape in Massachusetts is changing and causing confusion for divorce mediators, lawyers, and their clients.
Pierce v. Pierce
The Supreme Judicial Court ("SJC") of Massachusetts has rendered a decision in Pierce v. Pierce (SJC-10381, 2009), the case in which Rudolph Pierce, a former Massachusetts lawyer and judge, retired at age 65 years and 7 months and filed a complaint for modification asking the Court to permit him to stop paying alimony to his ex-wife. She was working as a fundraiser, but had recently resigned from her job when the responsibilities and travel requirements were increased.
The lower court judge had ordered Mr. Pierce to continue paying alimony, at the reduced rate of $42,000 a year, stating that he still had "earning capacity" and could easily obtain some additional legal work or perhaps become a law professor. The major issue on appeal is whether there should be a rebuttable presumption of alimony termination when a person reaches normal retirement age and actually retires. (Currently, the burden of proof on ending alimony at retirement is on the retiring payor spouse)
The SJC held that the retirement of an alimony payor at normal retirement age is one factor of many to evaluate when ending (or reducing) an alimony obligation. In this case, Mr. Pierce's present wife was working and earning enough to support the couple in their current lifestyle, whereas the there was an ongoing need for support of the former Mrs. Pierce. The SJC talked about the fair balance of sacrifice between the parties that need to occur in a case under facts like these, based on all the equitable factors, not just retiring at normal retirement age.
The Massachusetts Bar Association/Boston Bar Association Guidelines on Alimony (the "MBA/BBA Guidelines").
In its "Report of the Alimony Task Force" issued in July 2009, the MBA/BBA suggest maximum durational limits of alimony based on length of the "marital partnership". The marital partnership may include time of "proximate" and "significant" pre-marital cohabitation, at the discretion of the court.
The durational limits are as follows: In a marriage of up to 5 years, the maximum duration of alimony would be 50% of the length of marriage; more than 5 years up to 10 years, 60% of the length of the marriage; more than 10 years up to 15 years, 70%; more than 15 years up to 20 years, 80%; and more than 20 years, the alimony would be of "indefinite" duration.
Under the MBA/BBA Guidelines, alimony is presumed to end when the payor retires at an age that would be considered the usual retirement age for the payor's career. The Guidelines state that the dollar amount to be ordered should not generally exceed 33% of the difference between the gross ordinary incomes of the parties, but emphasizes that this percentage should not be utilized as a "formula" for setting an alimony order.
Boston Magazine published an article in its July 2009 issue entitled "Till Death Do Us Pay". As expected from the title, the article is highly critical of alimony practice and judges' decisions regarding alimony in Massachusetts. The article highlights the experiences of Steve Hitner, who was unable to get a modification in alimony after business reversals.
Terminating Alimony by Court Order.
Judges do not believe they have the authority to put a durational limit on alimony payments based on M.G.L. Chapter 208, Section 34, which provides equitable factors to determine the amount of alimony, but not its duration. The inability of the Courts to put durational limits on alimony has been supported by case law. See Gottesegen v. Gottesegen, 397 Mass. 617 (1986) (Probate Court judge may not order the termination of alimony on the occurrence of an event unrelated to the recipient spouse's need for alimony or the supporting spouse's ability to pay.)
Competing state Senate and House bills seeking to reform alimony laws in Massachusetts are currently under consideration. Senate Bill No. 1616 simply states that judges would have the authority to order amount "and duration" of alimony by amending Section 34.
House Bill No. 1785, is extremely detailed and fact-oriented. It puts the recipient of alimony on quite a short leash. It seeks to eliminate the mandatory factors to be considered Section 34 as well as all the established case law (such as need and ability to pay) and replace these with new factors, such as the willingness and diligence of the payee to seek employment, counseling, and training. The aim is for all payee spouses to become self-supporting within a reasonable period of time, which would not be greater than half the length of the marriage. It also provides for a tapering off of alimony during the second half of its duration by ten percent a year.
In addition, the House Bill would require that alimony payments cease at normal retirement age (now 66) "without exception," i.e., whether or not the payor continues to be employed and whether or not the payee is still in need. And, all current alimony orders would be revisited within 18 months to make sure that they are in substantial compliance with the new statute. The maximum duration of these existing orders would be three more years, plus a "reasonable period of time," defined as not longer than one-half the length of the marriage, less the number of years alimony has been already paid to the receiving spouse.
Though fairly silent about the amount of alimony to be paid, the House Bill adds unearned income generated by the marital assets owned by the "supported" party to income available to her/his support. This is a change from existing case law, which generally separates assets (and income derived from assets) from income. The House Bill does not recognize any partnership theory of marriage and the taking on of complementary roles during a long-term marriage.
Massachusetts Alimony Reform (www.massalimonyreform.com), an advocacy group is highly critical of current alimony practice in Massachusetts. A typical headline in Massachusetts Alimony Reform's website's "Breaking News" section leads with: "Massachusetts Alimony Reform to Tell Shocking Stories of People Who Have Lost Almost Everything Because of Archaic Alimony Laws..." Two of the stated goals of Massachusetts Alimony Reform are to "[e]liminate lifelong marital welfare" and to "[e]nd expensive lawyer battles over vague alimony rules and interpretations." You can get the drift of the accusations - lazy ex-spouses and rapacious lawyers. Steve Hitner, the divorced husband profiled in the Boston Magazine article on alimony highlighted above, is the current president of Massachusetts Alimony Reform.
The new Child Support Guidelines, effective January 1, 2009 (the "new Guidelines"), calculates child support based on the first $250,000 of the combined earned income of the parties rather than the first $100,000 of combined incomes. This is a significant departure. Previously, the non-custodial parent's income in excess of $100,000 a year was looked at for payment of alimony in customary practice. If construed as eliminating alimony in many cases, it represents a significant reduction in support.
At the annual Alimony presentation at the Massachusetts Continuing Legal Education Alimony Summit 2009, held in Boston in October 2009, even the presenters seemed unsure of how to calculate alimony in light of the new Child Support Guidelines. The new Guidelines have engendered so much uncertainty in the area of alimony that even the experts are confused and perplexed.
So What is a Divorce Lawyer or Mediator to do in light of this uncertainty?
Practitioners have always struggled with the issue of alimony. Clients have strong emotional issues surrounding it. The practices and guidelines available are often inconsistent, vague, fact sensitive, and frequently lead to arguably unfair practical results. For instance, why should a stay-at-home spouse raising several children have less after-tax income than the non-custodial working spouse? Should after-tax income be equalized? Should it be allocated 55%/45% in favor of the income earner?
The push for alimony reform reflects a concern that the system does not provide an incentive for dependent spouses to become self-supporting. However, it also fails to reflect an agreed-to division of labor over a marriage of many years duration, which is essentially a partnership. In many cases, the at-home spouse has made career sacrifices and decisions that cannot be changed at this late date. On the other hand, the presence of alimony can be a debilitating factor in some spouses' emotional ability to re-enter the job market and may lead to unnecessary dependency.
As divorce lawyers and mediators, we must sensitively navigate between these competing interests, concerns and realities as we seek to help our clients resolve the issues alimony presents in their divorces.
ABOUT THE AUTHOR
Laurie Israel is an A-V rated lawyer practicing in Brookline, Massachusetts. Laurie helps clients resolve their disputes with a high level of dignity, integrity and creativity.
She works in the areas of collaborative divorce, divorce mediation, divorce negotiation and prenuptial agreements. She also helps people who wish to stay married through providing marital mediation (a/k/a mediation to stay married) and negotiation of postnuptial agreements.
She can be contacted by phone at (617)277-3774 or or Visit Web Site
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