Tag: Alimony Change

Calculating Alimony with De Niro’s Dinero

Calculating alimony with Robert DeNiro’s dinero is what is turning up the heat in his divorce. His wife, Grace Hightower, is seeking temporary alimony and has asked for an emergency order to raise her monthly credit card limit from $50,000 to $100,000 – which De Niro halved.

Alimony Calculation

Raging Bull?

In their response, De Niro’s lawyers claimed that the actor’s financial status had been significantly damaged by Covid-19 after restaurants Nobu and Greenwich Hotel, which he owns stakes in, were forced to close.

The judge was told that, as well as sushi restaurant Nobu losing $4.87m between April and May, De Niro had been forced to borrow from business partners to pay investors ($500,000) because “he doesn’t have the cash”.

The actor’s lawyers said: “He is going to be lucky if he makes $7.5m this year,” adding that he would likely make $2.5m in 2020 and 2021!

Addressing Hightower, they said: “These people, in spite of his robust earnings, have always spent more than he has earned so this 76-year-old robust man couldn’t retire even if he wanted to because he can’t afford to keep up with his lifestyle expense”.

Hightower’s lawyer is calling it raging bull: “I’m not a believer that a man who has an admitted worth of $500m and makes $30m a year, all of a sudden in March he needs to cut down by 50% and ban her from the house.

Florida Alimony

I’ve written about subject of alimony in Florida. In every Florida dissolution of marriage case, the court can grant alimony to either party – husband or wife.

Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In determining whether to award alimony or not, the court has to first make a determination as to whether a wife or a husband, has an actual need for alimony, and whether the other party has the ability to pay alimony.

As DeNiro’s wife is discovering, proving the ability to pay is one of the central issues in her divorce right now because DeNiro’s income, it is claimed, dropped significantly due to the coronavirus outbreak.

Typically, courts consider any type of earned income or compensation — that is, income resulting from employment or other efforts — along with recurring passive income, such as dividends on your investments, in establishing the amount of support you will be responsible to pay.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony. In doing so, the court considers several factors, some of which can include:

  • The standard of living established during the marriage.
  • The duration of the marriage.
  • The age and the physical and emotional condition of each party.
  • The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.
  • The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate.

But, after establishing Hightower’s need for alimony, how much dinero is there to determine De Niro’s ability to pay?

Analyze This…

The Supreme Court justice ruled that De Niro should keep the lower credit card limit while paying Hightower $75,000 to find a summer home for their children. De Niro filed from divorce from Hightower in 2018.

Robert De Niro’s attorneys said that the actor’s finances have taken a huge hit over the course of the coronavirus pandemic. The actor is battling a divorce case against Grace Hightower, his ex-wife who he was with for 21 years, in Manhattan Supreme Court.

De Niro appeared via Skype at an emergency hearing, which was called after De Niro cut Hightower’s American Express credit card limit from $100,000 to $50,000 a month.

According to the Daily Mail, Hightower’s lawyer told the judge that she and her two children with De Niro, Harvey (8) and Elliot (21), had been banned from his New York compound, which is where De Niro has been staying during the pandemic.

However, De Niro’s lawyer, Caroline Krauss, reportedly told the judge that De Niro was forced to make this cut to Hightower’s credit card limit because his finances have been so badly affected by the pandemic.

Krauss told the judge that Nobu and The Greenwich Hotel, the restaurant chain and hotel that De Niro owns, have both been badly hit by the pandemic as they have been closed or partially closed for months with next to no income.

Krauss said that the 2004 prenuptial agreement between De Niro and Hightower means that De Niro is only required to pay $1 million a year to Hightower as long as he is making at least $15 million a year. The terms, Krauss said, state that if his income falls, hers will proportionately fall too.

Krauss said that the money De Niro has earned from last year’s “The Irishman” has largely already been paid out, meaning he will only receive $2.5 million this year.

“These people, in spite of his robust earnings, have always spent more than he has earned so this 76-year-old robust man couldn’t retire even if he wanted to because he can’t afford to keep up with his lifestyle expense.

In response, Page Six reported that Hightower’s lawyer, Kevin McDonough, told the judge: “Mr. De Niro has used the COVID pandemic, my words would be, to stick it to his wife financially.

“I’m not a believer that a man who has an admitted worth of $500 million and makes $30 million a year, all of a sudden in March he needs to cut down [spousal support] by 50 percent and ban her from the house.”

McDonough said that “the idea that Mr. De Niro is tightening his belt is nonsense.” The judge issued a temporary ruling that the credit card limit is kept at $50,000 a month, but that De Niro pays Hightower a $75,000 lump sum so she can find a summer home for her and their two children, while De Niro stays in his compound with his other three children.

De Niro and Hightower were married in 1997 but filed for divorce two years later. However, their divorce never finalized, and they patched things up and renewed their vows in 2004. They officially separated in 2018.

The Insider article is here.

Photo credit: David Shankbone – Own work, CC BY-SA 3.0

Alimony Reform, Marriage Length, and Permanent Alimony

Does the length of your marriage matter for alimony anymore? Some people are asking that after a recent decision by a Florida appeals court re-wrote the rules for measuring what a long-term marriage is. The Regular Session of the Florida legislature convened in January, and alimony reform is a hot topic in Tallahassee.

Trouble in Tallahassee

The Florida House of Representatives is currently convening in Tallahassee to debate House Bill 843 on Dissolution of Marriage. The bill makes a few changes to the divorce statutes, especially alimony.

The bill also redefines the amount and duration for bridge-the-gap, rehabilitative, and durational alimony, prohibits ordering a spouse who retired prior to a divorce to pay any alimony, except temporary alimony, unless the court determines otherwise and allows payors to modify alimony up to 12 months before his or her anticipated retirement.

The bill removes presumptions about the length of a short, moderate, or long-term marriage, eliminating permanent alimony (but allowing it if agreed to), prioritizing bridge-the-gap alimony, followed by rehabilitative alimony, before any other form.

Meanwhile, across town in Tallahassee, a recent appeals case from the First District Court of Appeal may throw fuel on the fire. After 16 years and 11 months of marriage, a husband asked for dissolution of the marriage.

The judge granted permanent alimony to the wife. The husband appealed saying the trial court should not have awarded permanent alimony, and should instead have given her durational alimony.

Why? The husband argued they were only married 16 years and 11 months — that’s just one-month shy of the statutory presumption of a “long-term” marriage under Florida statutes. But the trial court treated his marriage as if it were a long-term marriage of 17-years or more – even though it clearly was less.

Florida and the Length of Marriage

In Florida, the duration of a marriage always played a very important role in divorce cases. I’ve written about the types of alimony awards available in Florida before. For instance, Florida Statutes dealing with alimony specifically limit the type of alimony awards based on the duration of the marriage.

For determining alimony, there is a rebuttable presumption that a short-term marriage is a marriage less than 7-years, a moderate-term marriage is greater than 7-years but less than 17-years, and long-term marriage is 17-years or greater.

Florida defines the duration of marriage as the period of time from the date of marriage until the date of filing of an action for dissolution of marriage.

In addition to alimony, the duration of marriage is also a factor in property divisions. When a court distributes the marital assets and liabilities between the parties, the court begins with the premise of an equal split.

Changes to Alimony?

The appellate court ruled that despite the statute, being one month shy of the statutory definition of “long-term” was a de minimis period given the length of the marriage, and that the family law judge was allowed to overcome the presumption as to the length of the marriage to qualify it as a long-term marriage.

In Florida, we have a rebuttable presumption that a long-term marriage warrants an award of permanent alimony. This court argued that even if the parties’ marriage falls into the “grey area” between a long and a short-term marriage, the family judge can consider other factors beyond the duration of the marriage.

Other factors can include the earning capacity of the recipient of alimony. For instance, there was evidence that the wife’s health precludes employment. While she was just 53 years of age at the time of the divorce, her age was not a valid basis to deny permanent alimony absent evidence her relative youth would allow her to earn income sufficient to support a lifestyle consistent with that she enjoyed during the marriage.

What impact will this decision have on the Legislature, since they are considering scrapping permanent alimony altogether, and re-writing the rules around what the duration of a marriage is?

The new bill will require courts to consider the standard of living established during the marriage, and make specific consideration of the needs and necessities of life for each party after the marriage is dissolved, including a rebuttable presumption that both parties will inevitably have a lower standard of living than that which they enjoyed during the marriage.

The court of appeals opinion is here.

 

Speaking at Marital & Family Law Review Course

Honored to be asked to speak to over 1800 divorce lawyers, judges, hearing officers and other professionals at the prestigious Marital & Family Law Review Course in Orlando from January 31st to February 1st. I will be discussing modifications of parenting plans, settlement agreements, alimony and support. The event is co-sponsored by the Florida Bar Family Law Section and the American Academy of Matrimonial Lawyers.

Cert Review Speech

Modifications

Life happens. When it does, we often have to make changes to our parenting plans, agreements, the alimony we pay or receive, and the amount of support being paid. What do you need to modify any aspect of your divorce agreement or order?

In Florida, a substantial change is what must be proven in court when a parent wishes to modify a previous court order or divorce or separation agreement. It may be the person who must pay alimony or support and recently retired, lost their job, or received a significant pay cut.

A change may come from a whose job now allows them to spend more time at home and would like to spend that extra time with their children. Whenever there has been a substantial change in your circumstances you may be able to ask for a modification of your court order or agreement

Certification Review Course

It is a privilege to be invited to speak again at the annual Marital and Family Law Certification Review course again.

The annual seminar is the largest, and most prestigious advanced family law course in the state. Last year’s audience included over 1,800 attorneys and judges from around the state.

The review course is co-presented by the Family Law Section of The Florida Bar, and the American Academy of Matrimonial Lawyers.

Registration information is available here.

A Slice of Equitable Distribution and Alimony

The wife of Papa John’s founder John Schnatter filed for divorce, claiming her marriage with the unemployed pizza executive is “irretrievably broken,” according to court papers filed in Kentucky. If there is no prenuptial agreement, how big a slice of equitable distribution of the stock and any alimony is Annette entitled to?

Slice of Equitable Distribution

When the Moon Hits Your Eye

Papa John’s is an American pizza restaurant franchise. It runs the fourth largest pizza delivery restaurant chain in the United States, with headquarters in Jeffersontown, Kentucky, a suburb of Louisville.

Papa John’s was founded in 1984 when “Papa” John Schnatter knocked out a broom closet in the back of his father’s tavern, Mick’s Lounge, in Jeffersonville, Indiana. He then sold his 1971 Camaro Z28 to purchase US$1,600 worth of used pizza equipment and began selling pizzas to the tavern’s customers out of the converted closet.

John’s pizzas became so popular he moved into the adjoining space. The company went public in 1993 and a year later it had 500 stores. By 1997 it had 1,500 stores. And in 2009, John got his Camaro Z28 back after offering a $250,000 reward.

Schnatter and Annette Cox, 59, had been married since April 11, 1987, and separated on April 1 of this year, the wife’s attorney Melanie Straw-Boone writer in papers filed in Oldham Circuit Court. Cox called Schnatter a 57-year-old Louisville resident who “is not employed,” according to the boilerplate, three-page petition.

“The marriage between petitioner and respondent is irretrievably broken”.

The couple have two children and share unspecified real estate holdings, the filing said. Schnatter stepped down as CEO in late 2017 after reports surfaced that he uttered a racial slur during a conference call.

Alimony, Equitable Distribution, and the Length of Marriage

In Florida, the duration of marriage is an important topping in divorce cases. I’ve written about the types of alimony awards available in Florida before. For instance, Florida Statutes dealing with alimony specifically limit the type of alimony awards based on the duration of the marriage.

So, for determining alimony, there is a rebuttable presumption that a short-term marriage is a marriage less than 7-years, a moderate-term marriage is greater than 7-years but less than 17-years, and long-term marriage is 17-years or greater.

Florida defines the duration of marriage as the period of time from the date of marriage until the date of filing of an action for dissolution of marriage.

The duration of marriage can also be a large slice of the property division. When a court distributes the marital assets and liabilities between the parties, the court begins with the premise of an equal split.

However, there are times and cases which justify an unequal distribution based on several relevant factors. One of the factors a court can consider is the duration of marriage, in addition to other factors.

Dividing assets between spouses – especially large companies such as Papa John’s – is not as simple as taking a pizza cutter to a hot pie; even with agreements. Very often assets have appreciated over the course of several years. The longer the marriage is, the more a business interest can appreciate. When property appreciates, you need to distinguish between passive and active appreciation. A passive asset could be an investment account which is never traded.

A business, on the other hand, is an active investment, and the percentage a spouse is entitled to may depend on different things. Even with the most sophisticated couples, such as the Schnatter/Cox family, unless you clairvoyant, issues will arise that no one considered in earlier agreements, and are prime for negotiation.

Pizza Ready?

Separate from the divorce case, Schnatter filed a lawsuit Thursday against an advertising firm which was at the center of the racial slur incident.

Schnatter allegedly uttered the slur during a call with advertising firm Laundry Service, which the pizza executive accused of recording him without his consent. The lawsuit claims that Laundry Service leaked excerpts of the conference call, which broke a nondisclosure agreement.

Two weeks ago, Schnatter accused his former company of making substandard pizza. He said his former company has failed in keeping up with its long-time slogan: “Better Ingredients, Better Pizza.”

“I’ve had over 40 pizzas in the last 30 days, and it’s not the same pizza,” Schnatter told WDRB, a Fox affiliate in Louisville, Kentucky. “It’s not the same product. It just doesn’t taste as good.

The NBC News article is here.

 

Proving Income for Alimony in the Big Apple

Former New York City Mayor, Rudolph W. Giuliani, filed for divorce and set off a rancorous battle, in part, over how much income the former Mayor actually makes. Proving his income is important for determining her alimony and can be a tough question in the Big Apple.

income divorce big apple

It’s up to you New York

In caustic legal proceedings the couple has battled over many things like kitchen renovations, splurges of $7,131 on fountain pens and $12,012 on cigars. But the primary issue is Mr. Giuliani’s current income.

His wife believes that Mr. Giuliani left his law firm, Greenberg Traurig, in 2018, a month after the divorce was filed, and chose to work for President Trump pro bono in order to reduce any future alimony.

Mr. Giuliani earned $7.9 million in 2016 and $9.5 million in 2017, funding the couple’s roughly $230,000 a month lifestyle. In 2018, the year he began working for the president, Mr. Giuliani’s earnings dipped to $6.8 million, and he has suggested that this year’s income will be well below that.

Mr. Giuliani now gives his wife $42,000 a month, as well as covering other bills, including the carrying costs for their properties, as ordered by Judge Katz in February. Mrs. Giuliani must pay for the landscaping at their home in Southampton.

Mrs. Giuliani says she had no choice but to take him to court, to prove what he is actually worth financially and to get what she believes she is fairly entitled to.

Florida Alimony

I’ve written about the very public circus-like Giuliani divorce before, and on the subject of alimony in Florida. In every Florida dissolution of marriage case, the court can grant alimony to either party – husband or wife.

Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In determining whether to award alimony or not, the court has to first make a determination as to whether a wife or a husband, has an actual need for alimony, and whether the other party has the ability to pay alimony.

Proving the ability to pay is one of the central issues in the Giuliani divorce right now because his income dropped right before he filed for divorce. Typically, courts consider any type of earned income or compensation — that is, income resulting from employment or other efforts — along with recurring passive income, such as dividends on your investments, in establishing the amount of support you will be responsible to pay.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony. In doing so, the court considers several factors, some of which can include:

  • The standard of living established during the marriage.
  • The duration of the marriage.
  • The age and the physical and emotional condition of each party.
  • The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.
  • The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate.

But, after establishing a need for alimony, how much income is there to determine ability to pay?

Life in the Big Apple

Mrs. Giuliani said in an interview.

“I feel betrayed by a man that I supported in every way for more than 20 years, I’m sad to know that the hero of 9/11 has become a liar.”

But to hear Mr. Giuliani’s circle and his legal team tell it, Mrs. Giuliani’s endgame tactics are merely an extension of her personality, which they have not and do not describe kindly.

They portray her as being a social climber through marriage, someone who rose from her background as a nurse by marrying twice, before meeting the mayor of New York City.

And once she found her third husband, Mrs. Giuliani was accused of pushing her new husband’s children and many of his nearest friends away in an effort to control him.

“She has put 20 years into this relationship,” said her friend Andrea Ackerman, a real estate agent from whom she has purchased six homes. “She is not folding. Not this time, uh-uh.”

If there is one regret for Mr. Giuliani as his life once again upends in public, it is that his personal problems end up ensnaring the people around him, he said in an interview:

“Everybody’s life around you is being disrupted. You get the pain of that, but also you get the satisfaction of what it means to be in public office — they don’t. There is a certain amount of guilt in that.”

The New York Times article is here.

 

Short Term Alimony for a Three-Minute Marriage

In Kuwait, a newly married woman demanded a divorce within three minutes of signing her marriage contract. The Kuwaiti marriage is one of the shortest on record. But here’s an interesting question: what if she asked for short term alimony?

Short Term Alimony

Sands of Time

What lead to such an abrupt change of mind about nuptials? According to Kuwaiti news sources, the newly married woman tripped before exiting the courthouse with her husband after the judge married them.

Her newly minted husband made the “classic” new husband mistake: he started laughing at her for tripping and then called her “stupid”.

The bride became so infuriated with her new husband’s naïve mistake, she returned to the courthouse and demanded a divorce from the judge who just married them.

The Kuwaiti judge agreed and served an annulment just three-minutes after he originally married them. The couple, who live in Kuwait, never even left the courthouse as husband and wife.

So, is she entitled to any form of alimony?

Florida Alimony

I’ve written about divorce and the length of a marriage before. Florida Statutes actually define what the length of your marriage means. For example, in order to determine alimony, there is a rebuttable presumption in Florida that a short-term marriage is a marriage having a duration of less than 7 years.

Florida Statutes define a moderate-term marriage as a marriage having a duration of greater than 7 years but less than 17 years. And, a long-term marriage is a marriage having a duration of 17 years or greater.

How do you measure the marriage term? In Florida, the length of your marriage is the period of time measured from the date of your marriage until the date of filing of an action to dissolve your marriage.

In the Kuwaiti case, a three-minute marriage would be considered “short-term” under Florida law. Is there short term alimony for a short term marriage? The Length of the marriage is very important when it comes to determining the kind of duration of alimony payments. For example, permanent alimony is generally for longer term marriages if the statutory criteria are met. In shorter term marriages and for moderate term marriages, permanent alimony may be considered, but the burden of proof is much higher.

Conversely, bridge-the-gap alimony is generally awarded to allow a person to transition from being married to being single. So, bridge-the-gap alimony is designed for short-term needs. In fact, the length of an award bridge-the-gap alimony may not exceed 2 years.

Durational alimony helps provide a person with economic help for a set period of time after short or moderate length marriages or following a marriage of long duration if there is no ongoing need for support on a permanent basis.

The length of your marriage also factors in to property divisions. When a court divides the marital assets and debts, the court begin with the premise that the distribution should be equal. One of the factors a court can look to in justifying an unequal distribution includes the duration of the marriage.

Are congratulations in order?

Many on the internet who heard about the case responded in support of her choice, lauding her decision because, as one put it, “If this is how he acts in the beginning of their lives together, then its best she leaves now.”

Another responded, “Marriage without respect is a failed one from the start.”

A Twitter user commented: “This woman is a queen” In another case a bride who insulted her husband-to-be when she arrived at the altar and demanded the groom change his outfit. It’s believed to be the shortest marriage in Kuwait’s history.

The Khaleej Times article is here.

 

Alimony and Cohabitation

Actress, Alicia Silverstone, is on the hook for large monthly alimony payments following the finalization of her divorce from ex-husband Christopher Jarecki. What’s different is that alimony can end if he cohabitates with someone. What is Florida law on alimony and cohabitation?

Alimony cohabitation

The Wonder Years

According to media sources, the Clueless star is responsible for paying $12,000 per month in spousal support until Jan. 31, 2024, with the due date being the first of every month, according to court documents obtained by ET.

While the 42-year-old actress is required to pay the substantial spousal support sum for the next five years, the agreement provides that if Jarecki, also 42, lives with a “romantic partner” for at least five months out of a 12-month period, Silverstone’s financial obligation “shall immediately terminate.”

The couple also agreed to share joint physical custody of their 7-year old sone, with an equal and fair custody schedule to be agreed upon by both parents.

Florida Alimony & Cohabitation

I’ve written about alimony issues before. An early end to alimony because of cohabitation can be a clause anyone who pays alimony would want. As Silverstone’s divorce shows, very often it can be women paying alimony to men.

In Florida, cohabitation is referred to as a “supportive relationship.” In Florida, our statute allows a court to reduce or terminate an award of alimony if a supportive relationship exists between the recipient of alimony and the person the alimony recipient resides with.

The Crush

In determining whether a supportive relationship exists, the court considers the following:

  • The period of time that the obligee has resided with the other person in a permanent place of abode.
  • The extent to which the obligee or the other person has supported the other, in whole or in part.
  • The extent to which the obligee or the other person has performed valuable services for the other.
  • Whether the obligee and the other person have jointly contributed to the purchase of any real or personal property.
  • Evidence in support of a claim that the obligee and the other person have an express agreement regarding property sharing or support.
  • Whether the obligee and the other person have provided support to the children of one another, regardless of any legal duty to do so.

But simply proving a supportive relationship is not enough. Also, people can waive their right to seek modification of alimony in a settlement agreement. Cohabitation is not as easy to prove as you might think. Even if you can prove a supportive relationship, you must check your agreement to see if you can even modify alimony.

Clueless

The Silverstone agreement also has a clause stating that if his “housing costs” are reduced by at least 50 percent as a result of sharing a residence with any unrelated adult for five months out of a 12-month span, Silverstone would also be free from her support payments.

The pair started dating in 1997 and tied the knot in 2005. They later welcomed their son in May 2011. When Silverstone filed for divorce earlier this year, the actress’ rep released a statement to ET addressing the nature of their split.

According to court documents obtained by ET at the time, Silverstone cited “irreconcilable differences” as the grounds for the termination of their 13-year marriage.

The ET article is available here.

 

Alimony Modification

Florida law allows you to lower what you pay in alimony each month, increase your alimony payments, or terminate alimony payments altogether. A recent Florida case is an interesting example why alimony modification is a hot issue.

Alimony modification

Florida Alimony Modification

There are a few reasons why alimony can be modified. Dramatic changes in health, inability to go back to work (due to disability, injury, etc.), substantial raise in pay, big gifts or lottery winnings, loss of job, and of course, retirement are the major forces behind alimony modification.

I’ve written about alimony modification before. In Florida, to modify alimony, the payor has to show three fundamental things: a substantial change in circumstances, the change was not contemplated at the time of the final judgment of dissolution, and that the change is sufficient, material, involuntary and permanent in nature.

The Supreme Court of Florida has addressed the impact of retirement on support obligations in Florida. To determine whether a voluntary retirement is reasonable, courts must consider, in part, the payor’s age, health, and motivation for retirement, the type of work, and the age at which others engaged in that line of work normally retire.

In Florida there’s been a debate about whether these reasons for modifying alimony have to be “unanticipated” or can they be reasons everyone knew about. That dispute was recently settled here.

Retirement Accounts

In a recent Florida case, the trial judge and the spouses did not take into consideration the eventual income that the former wife would receive from her retirement and annuity accounts without penalty, once she reached retirement age when they drafted their settlement agreement more than 10 years ago.

Her former husband asked the court for an alimony modification – even though he had not retired and had the ability to pay the required alimony – because the former wife’s retirement accounts had appreciated, and she had reached the age of 59 ½, so she could take distributions without penalty.

The family court judge agreed to grant an alimony modification, and the former wife appealed. The former wife argued that her ability to access the retirement accounts without penalty was not an unanticipated change in circumstances, and alimony may not be modified in Florida for anticipated changes in circumstances.

The appellate court, agreed with the former husband, and sustained the alimony modification. Given that their agreement was silent as to what would happen once the former wife could access the funds in retirement accounts, the retirement accounts had not been taken into consideration to determine the former wife’s income.

The appellate decision is here.

 

The Alimony Race

Yet another news outlet is reporting on the 2018 Alimony Race. NPR weighs in on why people are rushing to finalize divorces this year: so they can deduct alimony payments before the new tax law kicks in.

alimony race

On Your Mark

As NPR reports, divorce lawyers and accountants have been advising many of their wealthier clients to hurry up and get divorced, like, now or at least before the end of the year because under the new tax law starting in 2019, a generous tax break for alimony payments will be gone.

The New York Times’, Jim Tankersley, who covers tax and economics stories, had a few things to say:

TANKERSLEY: So right now, if you get divorced – let’s say you’re a husband who is paying alimony to your ex-wife. You can deduct that, if you so agree with your spouse in the divorce settlement, from your taxes. But what’s going to happen is you won’t be able to anymore.

CHANG: OK, so spouses who will be on the hook for alimony payments will be eager to get their divorce settlements finalized this year but also, I can imagine, spouses who will be receiving the alimony payments because I would think that my soon-to-be ex would have more of a reason to give me more alimony if he or she gets a bigger deduction out of it this year.

TANKERSLEY: Yes, but it affects different couples differently. For couples who make essentially the same amount of money, if they’re in the same tax bracket, this is just an accounting shift. The same total amount of money changes hands.

TANKERSLEY: But for couples who make different amounts of money and are in different tax brackets, what they basically got before was a subsidy from the government for their divorce…

CHANG: What do you mean?

TANKERSLEY: …Because the higher-earning spouse was able to pass on income that would have been taxed at a really high rate but then instead was getting taxed at a low rate.

TANKERSLEY: So that difference between the tax rates was just free money from the government. Now that goes away. So, if you’re the husband, for example, who earned more and is paying that alimony to a wife, now you have to pay the taxes at the higher rate. That free money disappears, and so you are probably going to say to your ex-wife, sorry, there’s no more money; I’m not going to give you even more than I was originally thinking I was going to have to pay. And so, you the ex-wife end up with less money overall. And in between, the government gets more money.

CHANG: And I can imagine most couples that have severely disparate incomes – it’s usually the woman who earns less. So, this tax law change will probably have women bearing most of the cost.

TANKERSLEY: That’s what divorce lawyers and tax professionals and financial planners have been telling me – is that, yeah, it’s largely women who receive alimony. And particularly with wealthy couples, it’s largely women who leave the labor force to take care of kids or for whatever reason. And women earn less in the economy for the same work than men do. This is a potentially big loss for women…

Why it Matters

Spouses negotiating alimony payments may try to pay less when the change takes effect because there will be no tax savings.

The deduction is a big deal to couples negotiating their divorce because if someone who earns, say, $250,000 agrees to pay $4,000 per month in alimony, it really costs the person about $3,000 after taking the deduction into account.

Without the break, many people will agree to pay only what would have been their after-tax amount. It is feared that more couples will end up fighting in court because they won’t be able to agree on alimony.

2019 Deadline

The alimony deduction repeal doesn’t take effect immediately and won’t kick in until 2019. That is why lawyers are advising clients to file for divorce now.

However, meeting the 2019 deadline won’t be easy.

Some states have mandatory “cooling-off” periods, others states have residency requirements. So, you can’t just file for a divorce today, and expect that you’re going to be divorced tomorrow.

The NPR interview is here.

 

Alimony for Him

Score another win for the women’s rights movement, but I’m guessing it’s not a win women will celebrate. In a surprise twist in the age of #equalpay, more women in divorce are having to pay alimony to their ex-husbands.

Hear Me Roar!

As MarketWatch reports, an increasing number of women are paying alimony and child support when their marriages break up, according to a recent survey by the American Academy of Matrimonial Lawyers.

Some 54% of the attorneys surveyed have seen an increase in women paying child support in the last three years, and 45% noticed an uptick in women paying alimony.

Despite complaints about the women’s pay gap, the trend of women paying alimony is being seen as a sign of women’s growing earning power. But experience is also showing that having to pay a man alimony is a bitter pill to swallow for women.

Florida Alimony

I’ve written about alimony, and alimony reform in Florida, many times. In every dissolution of marriage case, the court can grant alimony to either party – husband or wife.

Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

In determining whether to award alimony or not, the court has to first make a determination as to whether a wife or a husband, has an actual need for alimony, and whether the other party has the ability to pay alimony.

Once a court determines there is a need and ability to pay alimony, it has to decide the proper type and amount of alimony. In doing so, the court considers several factors, some of which can include:

  • The standard of living established during the marriage.
  • The duration of the marriage.
  • The age and the physical and emotional condition of each party.
  • The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.
  • The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate.

But, the gender of the recipient is not a statutory basis for granting or denying alimony. Courts are supposed to be blind to gender in alimony awards.

The Future is Female!

Many women, no matter how educated, how professional, how modern they are, are surprised to learn that they might have to pay alimony. In the past, maybe mom was a kindergarten teacher and dad was working on Wall Street. For example:

  • In 1960, just 11% of households with children under 18 had mothers who were the breadwinner.
  • In 2013, moms were the primary provider in a record 40% of families, a 2013 Pew Research Center report found.
  • Some 31.4% of single dads who have custody of their kids received spousal support in 2016, and 52.3% of moms did.

The average amount of child support was $5,774 per year, or about $329 a month, but only 68.5% of that money was actually received, according to Census data.

Equality Includes Both Genders!

Paying alimony is something Sarah Gilbert never thought she would have to do, but the 44-year-old mom of three boys now sends $349 a month to her ex-husband. The Portland, Ore. resident says the experience has made her never want to get married again, even though she’s now in a happy relationship.

Her husband was a stockbroker when they first met, then he left the financial world to join the U.S. Army. After the military, he struggled to find work and was unemployed when they split. She was shocked when a judge gave her ex-husband primary custody and ordered Gilbert to pay monthly support.

The jaw dropped out of my mouth. I literally could not believe it. Had I been working a corporate job, I would have expected to pay spousal support to him, but I was a tour guide.

As a defense to paying alimony, working women going through a divorce will sometimes argue that their husbands are underemployed and could have earned much more than if he worked harder.

But the reality is, if during the course of the marriage, you and your husband agreed he’d earn less, work less, and you took on the role of the primary breadwinner, you’re going to pay that support.

The MarketWatch article is here.