Reconstructing Alimony and Spousal Maintenance

While there is no evidence of a groundswell of support for the idea that the alimony system should be reformed by using formulaic guidelines, there appears to be an escalating dialogue on this subject that matrimonial law practitioners, jurists and legislators in the State of New York and elsewhere cannot ignore.

The Origins of Debate

The genesis of the current discussions can be found in the American Law Institute's (“ALI”) Principles of the Law of Family Dissolution: Analysis and Recommendations (2002) (“Principles”). The ALI's Principles took an approach to what we in New York term “maintenance” (i.e., alimony or spousal support) that is premised on a much different concept than that which has prevailed over the course of matrimonial law history in this country. In the past, maintenance was either viewed as a reasonable needs-based support concept that took into account the standard of living established during the marriage, or as a rehabilitative concept designed to prepare the non'income-producing spouse to become essentially self-supporting. The ALI's approach did away with these concepts and, instead, suggested that compensation for losses sustained as a result of the marriage (e.g., foregone and, thus, lost economic opportunities of homemakers such as career advancement that would have resulted from employment outside of the home) should be the basis for the payment of spousal support as if “marriage” in and of itself were akin to “personal injuries” sustained in an accident or as the result of medical malpractice. The compensation approach was rejected by the American Academy of Matrimonial Lawyers in a recent report by its Commission that is reviewing the ALI's Principles. See Mary Kay Kisthardt, Re-Thinking Alimony: The AAML's Considerations for Calculating Alimony, Spousal Support or Maintenance, 21 J Am. Acad. Matrim. Law 61 (2008); See also Penelope Eileen Bryant, Vacant Promises?: The ALI Principles of the Law of Family Dissolution and the Post-Divorce Financial Circumstances of Women, 8 Duke J. Gender L & Pol'y 167 (2001).

In New York in early 2005, the Lawyers Committee Against Domestic Violence (a coalition of groups that focuses on issues affecting victims of domestic abuse between spouses, parents and children) attempted to attach to proposals for no-fault divorce legislation, that were being advanced by virtually every major bar association in New York State, a proposal for “Post-Marital Compensation Guidelines.” That effort was rejected by those bar associations, many of which believed that linking the two issues would surely doom their efforts to ensure the passage of no-fault divorce by the New York State Legislature. Since that time, no-fault divorce has continued to gather momentum, while the advocates of the guideline approach to spousal compensation have also pursued their goal.

Supporters of Change

In June 2008, Justice Jacqueline W. Silbermann, the Deputy Chief Administrative Judge for Matrimonial Matters of the New York State Office of Court Administration, invited lawyers from both the private and public sectors, as well as members of the judiciary, to participate in a round-table discussion. That discussion was about a proposal being circulated by a group that had labeled itself “The New York State Coalition for Post-Marital Income Guidelines.” Shortly before that round-table meeting was held, New York State Assembly Member Amy Paulin introduced legislation that contained, inter alia, virtually the identical proposal for the adoption of Post-Marital Income Guidelines. See Assembly Bill A.10446.

The Coalition for Post-Marital Income Guidelines explains its draft legislation as follows:

The ' Coalition ' has drafted legislation to establish guidelines, similar to those in the Child Support Standards Act, for determining what is now called maintenance. The Child Support Standards Act serves as the reference point for structure, language and definitions. Like the Child Support Standards Act, the legislation relies initially on a relatively simple, easily administered formula. Flexibility to accommodate cases for which the formula produces skewed results is introduced, as with the Child Support Standards Act, through provisions for deviations up or down from formula amounts; judges would justify deviations by reference to a list of statutorily-defined factors, and they would explain deviations in writing.

Calling the payments post-marital income captures the meaning of, and basis for, the periodic payments that are variously called alimony, maintenance, and spousal support. Post-marital income is rooted in the idea of marriage as a partnership in which husbands and wives make decisions jointly based on the assumption of a continuing relationship. With post-marital income, when the partnership ends, the burdens and benefits of marital decisions that have placed spouses in different economic positions are shared.

The guideline approach to child support standards cut drastically the time, expense, and uncertainty of making claims for child support. Post-marital income guidelines would do the same for divorce litigation.

Most importantly, perhaps, post-marital income guidelines would open the courthouse door to moderate and low-income spouses, who currently give up claims because thy cannot afford the expensive process of proving a right to maintenance under the existing laws. (Emphasis added.)

Parenthetically, it strikes this writer that enacting legislation because “perhaps” it may have a beneficial effect is not the way to go about ensuring that a proposed change would, in fact, benefit those for whom the legislation is designed to assist. But, putting aside the speculative nature of the Guidelines Coalition's proposal, focus for the moment on the reasons why proponents of the formula approach to maintenance believe that it is necessary to enact such legislation.

In general, those who believe that formulas are necessary also believe that there is a lack of consistency in the fashioning of alimony awards by the courts, so that similarly situated persons do not receive comparable spousal support awards in different cases, whether it be before the same judge or a different member of the judiciary, thereby making the results “inconsistent” and “unpredictable.” The supporters of the guideline approach also believe that “[t]his lack of consistency and predictability undermines confidence in the judicial system and further acts as an impediment to the settlement of cases, because without a reliable method of prediction clients are in a quandary and lawyers can only offer forecasts based on experiential, rather than empirical, backing.” See Kisthardt, supra at 62.

No Empirical Data

In considering the underpinnings of this call for a sea-change in the way we approach the awarding of spousal maintenance by our courts, one is immediately struck by the total lack of any empirical data from the New York State Courts or any other source for the proposition that there is a lack of consistency in the awarding of alimony to persons similarly situated. (Some of the criteria courts look at, and that are of interest when considering the similar treatment of similarly situated litigants are: 1) length of marriage; 2) possession of comparable marketable skills; 3) training and/or education for employment purposes; 4) whether the spouses have equivalent incomes and/or earnings histories; 5) whether equitable distribution property awards are of a same or similar magnitude; and 6) the time demands placed upon the primary post-divorce caretaker of the children.)

The lack of empirical data supporting the Coalition's proposal is a flaw that permeates the arguments that it makes, for just as there is no hard data to support claims of inconsistent and unpredictable awards of spousal maintenance from case to case, there is also no published empirical data to support the Coalition's premise that child support guidelines have “cut drastically the time, expense and uncertainty of making claims for child support.” Instead, the proponents of Post-Marital Income Guidelines rely upon anecdotal information gleaned from members of their Coalition and, possibly, others, while the opponents of the proposal rely on similar hearsay to support their contention that the status quo ought to be maintained.

What the Proposed Legislation Would Do

The proposed legislation would have judges calculate post-marital income in a two-step process. First, the court would be required to determine the respective incomes of each of the spouses based on the same definition of income utilized by the Child Support Standards Act (Domestic Relations Law (DRL)
' 240). Twenty percent of the lower income of the payee would be subtracted from 30% of the higher income of the payor. The court would then determine 40% of the combined incomes of the payor and the payee. The lower of the two amounts resulting from these two calculations would be the “amount of the post-marital income obligation.”

The second step in the process would be a determination of the duration of the award of post-marital income based upon a schedule derived from the length of the marriage. The schedule can be seen in the box below.

Under this proposal, the payments would cease upon the conclusion of the statutorily specified period determined under step two of the formula, or upon the death of one of the spouses. It would not, however, terminate upon the remarriage of the payee spouse, as is currently the law with respect to maintenance awards in this State. (The fairness of this approach, or the lack of fairness, will be addressed in the second part of this article.)

The proposal also makes provision for deviation from the formula if the court finds the result to be “unjust or inappropriate” based upon consideration of the following factors detailed in Assembly Member Paulin's bill. Those considerations are as follows:

1. the age and health of the parties;
2. the future earning capacity of the parties;
3. the wasteful dissipation of marital property;
4. the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
5. the existence and duration of a pre-marital joint household or a pre-divorce separate household;
6. the history of abuse by one party against the other;
7. the availability and cost of medical insurance for the parties;
8. the care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws that has inhibited or continues to inhibit a party's earning capacity;
9. the inability of one party to obtain meaningful employment due to age or absence from the workforce;
10. the tax consequences to each party;
11. the equitable distribution of the marital property; and
12. any other factor which the court shall expressly find to be just and proper.

Any deviation from the guidelines would have to be explained by the judge in a detailed written decision.

Last, the proposals for post-marital income guidelines would exclude divorcing couples who have family incomes of $1 million or more. This so-called “cap” is but another piece of this legislative offering that contradicts the notion that it is meant, for the most part, to apply to divorcing spouses of moderate or little income; surely, families with six-figure incomes are not those of moderate means under the economics that prevail throughout most of New York State.

Instead of the usual guidelines, in those cases where the family's annual income is seven figures or greater, the court would apply a series of factors similar to the deviation factors, as follows:

1. the standard of living of the parties established during the marriage;
2. the age and health of the parties;
3. the present and future earning capacity of the parties;
4. the duration of the marriage;
5. the need of one party to incur education or training expenses;
6. the extreme differences in the incomes of the parties;
7. the wasteful dissipation of marital property;
8. the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
9. the existence and duration of a pre-marital joint household or a pre-divorce separate household;
10. the history of abuse by one party against the other;
11. the availability and cost of medical insurance for the parties;
12. the care of the children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws that has inhibited or continues to inhibit a party's earning capacity;
13. the inability of one party to obtain meaningful employment due to age or absence from the workforce;
14. the tax consequences to each party;
15. the equitable distribution of the marital property;
16. the reduced or lost lifetime earning capacity of the party seeking post-marital income as a result of having foregone or delayed education, training, employment or career opportunities during the marriage;
17. the contributions and services of the party seeking post-marital income as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and
18. any other factor which the court shall expressly find to be just and proper.

More to Discuss

The second part of this article will critique this proposal, including the question of whether there is any justification for the differences between the deviation factors and the factors to be applied to families with incomes in excess of $1 million. In addition, we will look at a possible alternative mechanism for establishing a process that would contribute to the resolution of the heated debate that this latest proposal has engendered among attorneys, who all have the welfare of their respective client constituencies at heart.

[IMGCAP(1)]

Alton L. Abramowitz, a member of this newsletter's Board of Editors, is a partner with New York's Mayerson Stutman Abramowitz Royer LLP.

While there is no evidence of a groundswell of support for the idea that the alimony system should be reformed by using formulaic guidelines, there appears to be an escalating dialogue on this subject that matrimonial law practitioners, jurists and legislators in the State of New York and elsewhere cannot ignore.

The Origins of Debate

The genesis of the current discussions can be found in the American Law Institute's (“ALI”) Principles of the Law of Family Dissolution: Analysis and Recommendations (2002) (“Principles”). The ALI's Principles took an approach to what we in New York term “maintenance” (i.e., alimony or spousal support) that is premised on a much different concept than that which has prevailed over the course of matrimonial law history in this country. In the past, maintenance was either viewed as a reasonable needs-based support concept that took into account the standard of living established during the marriage, or as a rehabilitative concept designed to prepare the non'income-producing spouse to become essentially self-supporting. The ALI's approach did away with these concepts and, instead, suggested that compensation for losses sustained as a result of the marriage (e.g., foregone and, thus, lost economic opportunities of homemakers such as career advancement that would have resulted from employment outside of the home) should be the basis for the payment of spousal support as if “marriage” in and of itself were akin to “personal injuries” sustained in an accident or as the result of medical malpractice. The compensation approach was rejected by the American Academy of Matrimonial Lawyers in a recent report by its Commission that is reviewing the ALI's Principles. See Mary Kay Kisthardt, Re-Thinking Alimony: The AAML's Considerations for Calculating Alimony, Spousal Support or Maintenance, 21 J Am. Acad. Matrim. Law 61 (2008); See also Penelope Eileen Bryant, Vacant Promises?: The ALI Principles of the Law of Family Dissolution and the Post-Divorce Financial Circumstances of Women, 8 Duke J. Gender L & Pol'y 167 (2001).

In New York in early 2005, the Lawyers Committee Against Domestic Violence (a coalition of groups that focuses on issues affecting victims of domestic abuse between spouses, parents and children) attempted to attach to proposals for no-fault divorce legislation, that were being advanced by virtually every major bar association in New York State, a proposal for “Post-Marital Compensation Guidelines.” That effort was rejected by those bar associations, many of which believed that linking the two issues would surely doom their efforts to ensure the passage of no-fault divorce by the New York State Legislature. Since that time, no-fault divorce has continued to gather momentum, while the advocates of the guideline approach to spousal compensation have also pursued their goal.

Supporters of Change

In June 2008, Justice Jacqueline W. Silbermann, the Deputy Chief Administrative Judge for Matrimonial Matters of the New York State Office of Court Administration, invited lawyers from both the private and public sectors, as well as members of the judiciary, to participate in a round-table discussion. That discussion was about a proposal being circulated by a group that had labeled itself “The New York State Coalition for Post-Marital Income Guidelines.” Shortly before that round-table meeting was held, New York State Assembly Member Amy Paulin introduced legislation that contained, inter alia, virtually the identical proposal for the adoption of Post-Marital Income Guidelines. See Assembly Bill A.10446.

The Coalition for Post-Marital Income Guidelines explains its draft legislation as follows:

The ' Coalition ' has drafted legislation to establish guidelines, similar to those in the Child Support Standards Act, for determining what is now called maintenance. The Child Support Standards Act serves as the reference point for structure, language and definitions. Like the Child Support Standards Act, the legislation relies initially on a relatively simple, easily administered formula. Flexibility to accommodate cases for which the formula produces skewed results is introduced, as with the Child Support Standards Act, through provisions for deviations up or down from formula amounts; judges would justify deviations by reference to a list of statutorily-defined factors, and they would explain deviations in writing.

Calling the payments post-marital income captures the meaning of, and basis for, the periodic payments that are variously called alimony, maintenance, and spousal support. Post-marital income is rooted in the idea of marriage as a partnership in which husbands and wives make decisions jointly based on the assumption of a continuing relationship. With post-marital income, when the partnership ends, the burdens and benefits of marital decisions that have placed spouses in different economic positions are shared.

The guideline approach to child support standards cut drastically the time, expense, and uncertainty of making claims for child support. Post-marital income guidelines would do the same for divorce litigation.

Most importantly, perhaps, post-marital income guidelines would open the courthouse door to moderate and low-income spouses, who currently give up claims because thy cannot afford the expensive process of proving a right to maintenance under the existing laws. (Emphasis added.)

Parenthetically, it strikes this writer that enacting legislation because “perhaps” it may have a beneficial effect is not the way to go about ensuring that a proposed change would, in fact, benefit those for whom the legislation is designed to assist. But, putting aside the speculative nature of the Guidelines Coalition's proposal, focus for the moment on the reasons why proponents of the formula approach to maintenance believe that it is necessary to enact such legislation.

In general, those who believe that formulas are necessary also believe that there is a lack of consistency in the fashioning of alimony awards by the courts, so that similarly situated persons do not receive comparable spousal support awards in different cases, whether it be before the same judge or a different member of the judiciary, thereby making the results “inconsistent” and “unpredictable.” The supporters of the guideline approach also believe that “[t]his lack of consistency and predictability undermines confidence in the judicial system and further acts as an impediment to the settlement of cases, because without a reliable method of prediction clients are in a quandary and lawyers can only offer forecasts based on experiential, rather than empirical, backing.” See Kisthardt, supra at 62.

No Empirical Data

In considering the underpinnings of this call for a sea-change in the way we approach the awarding of spousal maintenance by our courts, one is immediately struck by the total lack of any empirical data from the New York State Courts or any other source for the proposition that there is a lack of consistency in the awarding of alimony to persons similarly situated. (Some of the criteria courts look at, and that are of interest when considering the similar treatment of similarly situated litigants are: 1) length of marriage; 2) possession of comparable marketable skills; 3) training and/or education for employment purposes; 4) whether the spouses have equivalent incomes and/or earnings histories; 5) whether equitable distribution property awards are of a same or similar magnitude; and 6) the time demands placed upon the primary post-divorce caretaker of the children.)

The lack of empirical data supporting the Coalition's proposal is a flaw that permeates the arguments that it makes, for just as there is no hard data to support claims of inconsistent and unpredictable awards of spousal maintenance from case to case, there is also no published empirical data to support the Coalition's premise that child support guidelines have “cut drastically the time, expense and uncertainty of making claims for child support.” Instead, the proponents of Post-Marital Income Guidelines rely upon anecdotal information gleaned from members of their Coalition and, possibly, others, while the opponents of the proposal rely on similar hearsay to support their contention that the status quo ought to be maintained.

What the Proposed Legislation Would Do

The proposed legislation would have judges calculate post-marital income in a two-step process. First, the court would be required to determine the respective incomes of each of the spouses based on the same definition of income utilized by the Child Support Standards Act (Domestic Relations Law (DRL)
' 240). Twenty percent of the lower income of the payee would be subtracted from 30% of the higher income of the payor. The court would then determine 40% of the combined incomes of the payor and the payee. The lower of the two amounts resulting from these two calculations would be the “amount of the post-marital income obligation.”

The second step in the process would be a determination of the duration of the award of post-marital income based upon a schedule derived from the length of the marriage. The schedule can be seen in the box below.

Under this proposal, the payments would cease upon the conclusion of the statutorily specified period determined under step two of the formula, or upon the death of one of the spouses. It would not, however, terminate upon the remarriage of the payee spouse, as is currently the law with respect to maintenance awards in this State. (The fairness of this approach, or the lack of fairness, will be addressed in the second part of this article.)

The proposal also makes provision for deviation from the formula if the court finds the result to be “unjust or inappropriate” based upon consideration of the following factors detailed in Assembly Member Paulin's bill. Those considerations are as follows:

1. the age and health of the parties;
2. the future earning capacity of the parties;
3. the wasteful dissipation of marital property;
4. the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
5. the existence and duration of a pre-marital joint household or a pre-divorce separate household;
6. the history of abuse by one party against the other;
7. the availability and cost of medical insurance for the parties;
8. the care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws that has inhibited or continues to inhibit a party's earning capacity;
9. the inability of one party to obtain meaningful employment due to age or absence from the workforce;
10. the tax consequences to each party;
11. the equitable distribution of the marital property; and
12. any other factor which the court shall expressly find to be just and proper.

Any deviation from the guidelines would have to be explained by the judge in a detailed written decision.

Last, the proposals for post-marital income guidelines would exclude divorcing couples who have family incomes of $1 million or more. This so-called “cap” is but another piece of this legislative offering that contradicts the notion that it is meant, for the most part, to apply to divorcing spouses of moderate or little income; surely, families with six-figure incomes are not those of moderate means under the economics that prevail throughout most of New York State.

Instead of the usual guidelines, in those cases where the family's annual income is seven figures or greater, the court would apply a series of factors similar to the deviation factors, as follows:

1. the standard of living of the parties established during the marriage;
2. the age and health of the parties;
3. the present and future earning capacity of the parties;
4. the duration of the marriage;
5. the need of one party to incur education or training expenses;
6. the extreme differences in the incomes of the parties;
7. the wasteful dissipation of marital property;
8. the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
9. the existence and duration of a pre-marital joint household or a pre-divorce separate household;
10. the history of abuse by one party against the other;
11. the availability and cost of medical insurance for the parties;
12. the care of the children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws that has inhibited or continues to inhibit a party's earning capacity;
13. the inability of one party to obtain meaningful employment due to age or absence from the workforce;
14. the tax consequences to each party;
15. the equitable distribution of the marital property;
16. the reduced or lost lifetime earning capacity of the party seeking post-marital income as a result of having foregone or delayed education, training, employment or career opportunities during the marriage;
17. the contributions and services of the party seeking post-marital income as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and
18. any other factor which the court shall expressly find to be just and proper.

More to Discuss

The second part of this article will critique this proposal, including the question of whether there is any justification for the differences between the deviation factors and the factors to be applied to families with incomes in excess of $1 million. In addition, we will look at a possible alternative mechanism for establishing a process that would contribute to the resolution of the heated debate that this latest proposal has engendered among attorneys, who all have the welfare of their respective client constituencies at heart.

[IMGCAP(1)]

Alton L. Abramowitz, a member of this newsletter's Board of Editors, is a partner with New York's Mayerson Stutman Abramowitz Royer LLP.