Articles Posted in Alimony

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Florida is one of only a few states that still allow permanent alimony, and for that it has gained some notoriety. Of course, the requirements for awarding permanent alimony are quite strict, and the cases that involve it tend to be complex. The guiding principle that Florida courts use in determining spousal support and other matters related to property division is equitable distribution. Equitable distribution means assigning to each spouse the assets and obligations that the court deems fair based on the couple’s unique circumstances. As you might imagine, there is plenty of room for disagreement about what is fair. The Wayne v. Einspar appeal is a recent Florida family law case in which a former spouse challenged the court’s decision regarding equitable distribution.

Background of the Wayne v. Einspar Case

Matthew Wayne and Susan Einspar divorced in 2013, after their son had reached adulthood. At the time of their divorce, both parents had separately cosigned for various loans for their young adult son. Wayne was a cosigner on the student loans, and Einspar was a cosigner on the car loan. In the original divorce decision, the court did not count the loans as marital property.  Additionally, the court required Wayne to pay permanent alimony to Einspar and to keep a life insurance policy with Einspar as the beneficiary in order to secure this alimony. Wayne filed an appeal, challenging the court’s original decision on 10 counts, many of them related to alimony. Continue reading

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The longer a couple has been married, and the more assets they have, the more complicated the case tends to be if they divorce. Perhaps the most bitter divorce battles center around the physical custody of minor children and the right to make decisions related to their upbringing. When a couple does not have minor children, the biggest disagreements usually have to do with the division of property. Florida courts have clear rules about what is marital property and what is non-marital property, but there is still room for complicated situations to arise in which each spouse can make a claim to a certain asset. For example, if one spouse earned a lot more money than the other during the marriage, how should that money be divided? If one spouse used the couple’s money irresponsibly, how does that affect the court’s decision about how to divide the property?

Florida’s Equitable Distribution Doctrine

Florida courts divide divorcing couples’ property according to the principle of equitable distribution. In other words, they go by what is fair. They do not always divide marital property evenly, and they do not simply take into account how much income each spouse brought in and then let each spouse keep only the money he or she earned. Florida law also considers unpaid contributions to the marriage as reasons a person is entitled to a certain share of the marital property. For example, time spent as a stay-at-home parent also counts as a contribution. The logic is that, when taking care of the children full time, the stay-at-home parent spouse was freeing up the other spouse to concentrate more on earning money.

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No matter your profession, you have probably seen articles circulating online or on email lists about industry-specific words to expunge from your vocabulary. Most of these articles flag certain words for deletion because they are clichés or neologisms. The first time you clicked on a clickbait article telling you to avoid saying “think outside the box” or “circle back” was probably years ago, when the term “clickbait” was known only to professional writers. The family law terms you should remove from your vocabulary, however, are actually misleading. They refer to outdated concepts in family law and therefore are unhelpful in thinking about your divorce and parenting plan.

Custody

People tend to speak of one parent having custody of the children after a divorce, while the other parent has visitation. In the 1980s and 1990s, it was more common than it is now for children to spend most of their time with one parent and to spend only two weekends a month with the other parent. Now, when possible, courts often rule to have children spend at least two nights per week with each parent. Exceptions are when the parents live so far away from each other that it is not practical to transport the children back and forth each week.

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Florida is one of only a few states in which judges can award permanent alimony to the spouse with the lower income or earning potential as part of a divorce decree. For a novelist with a certain mindset, Florida’s spousal support laws could be a plot point in a farce about materialistic social climbers and wealthy business tycoons. (Would Bunny Lebowski in The Big Lebowski have had to stage her own abduction if she could have just sued for permanent alimony?) In practice, permanent alimony is one of the least frequently awarded forms of spousal support.  The only people who are even eligible to receive permanent spousal support are those who have been married for 17 years or more. Most permanent alimony recipients are elderly or have a chronic illness that would make gainful employment difficult or impossible.

Local media have recently highlighted the complexities of high asset divorce by reporting on the divorce of Nancy Hua and Dennis Tsung, an affluent South Florida couple. As of August 2017, the details of how to divide the couple’s assets have yet to be completely worked out. The rulings issued so far in the divorce and in Nancy Hua’s appeal reveal many interesting things about the way Florida courts view property division between divorced spouses.

Wealth Plus Time Does Not Always Equal Permanent Alimony

Nancy and Dennis were married for almost 18 years. In the original divorce case, Nancy requested permanent alimony of $20,000 per month. For most of the marriage she had been a stay-at-home parent with no income. The spousal support award she received was for rehabilitative alimony; Dennis was to pay her $2,500 per month for two years. He was also to pay $12,000 toward her educational expenses; the plan was for her to attend nursing school and then begin working. The court estimated that she would be able to earn an annual income of $50,000 working full time as a nurse. The reason for the court’s decision to award rehabilitative alimony is that Nancy Hua had plenty of potential for gainful employment. She was in her early forties and in good health, and her children were old enough not to require full time childcare. Continue reading

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Alimony, spousal support, and spousal maintenance all refer to money paid by one ex-spouse to another after a divorce. The idea behind alimony is that, if one spouse depended on the other financially during the marriage, that spouse cannot become financially independent immediately after divorce. Florida alimony laws are quite favorable to the spouse receiving alimony payments. In fact, Florida is one of only a few states that can require the supporting spouse to continue making alimony payments indefinitely.

A change in the financial situation of one or both parties can lead to a modification of the spousal support order. One of the most common reasons for early termination of alimony payments is if the supported spouse remarries. As with so many legal issues, though, there is a gray area in which judges must consider the unique circumstances of the couple in deciding whether to terminate or reduce alimony payments.

Lump Sum vs. Monthly Payments

Most alimony payments in Florida take the form of periodic alimony, meaning that the supporting spouse pays the supported spouse a certain amount of money each month.  Bridge-the-gap alimony is intended to help the supported spouse through the transitional period of divorce and cannot exceed two years. Durational alimony, which is new as of 2010, lasts for a finite period of time specified in the court order. Both temporary and permanent periodic alimony stop immediately if the supported spouse remarries. Continue reading

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Although there have been several recent attempts to abolish permanent alimony in Florida, all those recent attempts have failed.  Permanent alimony is still alive and well in the State of Florida.

So what does this mean to you, either as a potential recipient, or as a potential payor of alimony?  Permanent alimony is generally, as a rule, reserved for those cases in which the marriage has lasted at least 17 years.  Once that 17 year threshold is met, the potential for either paying or receiving permanent alimony is quite real.

An award of permanent alimony is not however, based solely upon the years of marriage between the parties.  The court is still required, and is mandated by Florida Statute 61.08 to consider the 10 factors listed in that statute regarding the award of alimony.

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Although 401K accounts and IRA retirement accounts are generally protected from creditors, they may not have the same protection against an ex- spouse regarding the payment of alimony or child support arrears.  Stated another way, if you are owed either alimony or child support, do you have a right to collect the monies owed from your ex-spouse’s retirement accounts?

Statutes that were designed to protect the family assets from creditor claims, so that the family would not become dependent upon the state for support, do not afford an individual the same protection against their ex-spouse for the payment of child support or alimony arrears.

In order for a spouse to reach funds held in a retirement account, whether it be an IRA or a 401(k), there must first be an existing support order.  Next, there must be a finding by the court that there are in fact arrears owed pursuant to that court order which have accrued as a result of nonpayment by the obligor.  If the court makes an affirmative finding that the obligor has willfully refused to pay support obligations, he or she may be found in contempt of court.

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The rate at which alimony and/or child support arrears are repaid is largely dependent on whether or not an income withholding order has been previously entered in the case.

If an income deduction order or income withholding order has been entered, Florida Statute 61.1301(1)(b)(2) mandates that any arrears must be repaid at least at the rate of 20% of the regular monthly support obligation. This is a nonnegotiable amount that cannot be repaid at less than the 20% rate based upon the statutory mandate.

The situation is a little bit different when there is no previously existing income withholding order.  The court has more discretion to dictate the terms at which arrears will be repaid to the recipient.  Case law has made it clear that in situations where income deduction or income withholding orders are not at issue or in play in the case, the trial court would have discretion to provide a different rate of payment on existing arrears.

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All income available to the recipient of alimony should be taken into consideration prior to the court assessing the amount of alimony to be paid.

Income from all sources reduce the “needs” of the spouse who is claiming alimony from the other party.  “Needs versus ability to pay” is the general standard utilized by the courts in determining alimony awards.  The importance of examining all sources of income available to the recipient of alimony cannot be understated.

Interest earned on 401(k) retirement accounts should be considered as income available to the spouse even though the spouse is not able to draw on the income until he or she reaches the age of 65.  Niederman v. Niederman, 6o So3rd 544 (Florida 4th DCA 2011)  stands for that very principle.  This is true regardless of whether the recipient of the alimony award has attained the age at which funds may be withdrawn without penalty.

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A trial court is required to make sufficient findings about an individual’s ability to pay alimony.  A litigant requesting alimony has the burden of proof on both his or her financial need as well as the other spouse’s ability to pay and meet that need. Gilliard v. Gilliard, 162 So3rd 1147 (Florida 5th DCA 2015).

In a recent case, Rutan v. Rutan, 177 So3rd 35 (Florida 2nd DCA 2015), the trial court noted the well-known ability of “self-employed spouses, in contrast to salaried employees, to control and regulate their income.”

Reasonable inferences made by a trial court from the evidence submitted regarding a party’s income are not enough. Inferences, no matter how reasonable, do not constitute a satisfactory substitute for the trial court making specific findings concerning the actual amount of income that would justify an alimony award.