New York Divorce Report - New York's Divorce and Family Law Blog

The laws governing spousal maintenance in New York may be soon be changing.   

The Law Revision Commission issued a recommendation that New York adopt a formula to determine not only temporary maintenance, but post divorce maintenance as well.

Presently, New York courts only use a formula to award temporary maintenance.    Post divorce maintenance is generally based on consideration of a number of statutory factors.    

According to the recommendation, the maintenance formula would apply to the first $136,000 of income.    Courts would have discretion to vary from the guidelines if the award was unjust, inequitable or when the combined income exceeds $136,000.

In addition to announcing the maintenance formula, the Law Revision Committee suggested:

• Abandoning the theory of “enhanced earning capacity”  which enabled a spouse make a claim for equitable distribution whenever the other obtained a professional license or educational degree.  New York is the only state that allows distributes an enhanced earning capacity.
• Limiting the duration of temporary maintenance awards so that maintenance awards do not exceed the length of the marriage.
• Fixing the duration of any post divorce maintenance award so as to be based on the length of the marriage, the time required for the non-monied spouse to acquire sufficient education or training to find appropriate employment, and  the age of the non-monied spouse. 

We will have to wait to see what provisions, if any,  of the committee’s recommendations are enacted into law.    Stay tuned!

At the same tine no fault divorce came to New York, the laws regarding maintenance or alimony as is known elsewhere were changed. 

New York Courts were empowered to award temporary maintenance by way of a troublesome and formulistic calculation (discussed here).  

Maintenance to be paid after a divorce is now determined by consideration by an expanded list factors instead the type mathematical formula used to award temporary maintenance.    The twenty statutory factors to be considered are:

 (1) the income and property of the respective parties including marital property distributed pursuant to subdivision five of this part;

 (2) the length of the marriage;

 (3) the age and health of both parties;

 (4) the present and future earning capacity of both parties;

 (5) the need of one party to incur education or training expenses;

 (6) the existence and duration of a pre-marital joint household or a pre-divorce separate household;

 (7) acts by one party against another that have inhibited or continue to inhibit a party's earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;

 (8) the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary therefor;

 (9) reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage;

 (10) the presence of children of the marriage in the respective homes of the parties;

 (11) 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;

 (12) the inability of one party to obtain meaningful employment due to age or absence from the workforce;

 (13) the need to pay for exceptional additional expenses for the child/children, including but not limited to, schooling, day care and medical treatment;

 (14) the tax consequences to each party;

 (15) the equitable distribution of marital property;

 (16) contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;

 (17) the wasteful dissipation of marital property by either spouse;

 (18) the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;

 (19) the loss of health insurance benefits upon dissolution of the marriage, and the availability and cost of medical insurance for the parties; and

 (20) any other factor which the court shall expressly find to be just  and proper.

While many of these factors were long recognized, some are new. Among the more interesting is #5-the need of one party to incur education and training expenses.   What makes this interesting is that the education is not in any way linked to the party’s ability to become self-supporting.   The award could be justified on a need to be educated.

Also, new is # 6-the existence and duration of a pre-marital joint household or a pre-divorce separate household.    In most cases, and particularly in the case of long term marriages, the pre-marital standard of living pre-marriage is not an issue.  But now, especially where the parties have cohabitated for a number of years before a short marriage, their pre-martial cohabitation could potentially lead to a higher maintenance award.   

Factor 11 of the new law allows for the first time, consideration of the need of a party to care for elderly parents or in-laws. In addition, by making the care of disabled adult children a factor, the law, in effect, extends child support for disabled children beyond the age of 21.

I will continue to follow cases applying the statutory factors to maintenance awards and report about them here.   

 

Though divorce filings are up on Long Island since the New York’s no-fault divorce law took effect 17 months ago, the law is having its intended effect; couples are concentrating on the financial and child custody issues rather airing their dirty laundry in grounds trials.

According to Newsday, the number of new divorce cases in Nassau County increased by 6% last year compared with 2009, the last full year under the old law. In Suffolk County, divorce filings increased by 9%.  

In a no-fault divorce, a spouse can simply claim a marriage has "irretrievably" broken down for at least six months before filing for divorce. Prior to New York’s adoption of no-fault divorce, a spouse was required to allege and prove, at trial, if necessary, grounds such as abandonment, adultery or cruel and inhuman treatment.

A law, enacted at the same time as no-fault divorce, to provide guidelines for temporary maintenance has been more problematic.  The formula, which sets guideline to award temporary spousal maintenance based on the spouses' incomes, fails to address how to deal with household expenses such as mortgage and utility payments.   Revisions to the law are slated to be introduced sometime this spring. 

Ironically, as Newsday reports, advocates for the victims of domestic violence, who were among the biggest critics of no fault divorce, have grown to embrace it.  

Advocates for victims of domestic violence have been won over by the no-fault law. They originally opposed it because they felt the history of abuse might not be factored into divorce settlements. But as it turned out, judges are much more likely to quickly award support and attorney fees that make it possible for women to leave an abusive home and get adequate legal representation, they said.

Though no fault streamlined the divorce process, the temporary support guidelines are a mess.  Rumor has it that the revisions will include guidelines for post judgment maintenance as well.    Rather than speculate as to the “fixes,” we will just have to wait and see and hope that the cure is not worse than the disease

One of the major criticisms of the new temporary maintenance law enacted last year was that it would lead to severe results, disproportionately re-distributing income. 

As I explained in a previous post, the new law provides for a formula to calculate the presumptive temporary maintenance award.  The law also provides a number of factors to be considered when the presumptive award would be unjust or inappropriate. 

In a case of first impression, Justice Jeffrey Sunshine granted a $24,000 deviation from the presumptive award to allow the husband to meet his “pre-divorce household expenses and take into account the parties’ expenses, child care costs and net available resources. 

In the case Scott M. v Ilona M. the Husband had an income of $156,000 and the Wife had an income of $34,000.   There was one child of the marriage for whom the parties paid $1,700 a month for child care. 

After conducting an exhaustive application of the child support and temporary maintenance guidelines, Justice Sunshine found that if the support and maintenance guidelines were rigidly applied, the husband would only be left with $39,000 in disposable funds, whereas the wife would have $78,000.   Even after the deviation from the guidelines, the Husband still only has $51,000 in disposable income compared to the Wife’s $67,000.

The Kings County court further noted that the income distribution pursuant to the child support and temporary maintenance guidelines must be taken in account in awarding counsel fees. 

The newly enacted DRL 237 provides that “"[t]here shall be rebuttable presumption that counsel fees shall be awarded to the less monied spouse.”

As Justice Sunshine aptly noted:

[T]he Court cannot decide that just because one party "earns more" than the other that they automatically become the "monied spouse" . . . However, based upon the temporary maintenance and child support award, even with the deviation, you can no longer consider the husband as a "monied spouse".

Notwithstanding this conclusion, the wife was still granted an interim award of $5,000 for attorneys’ fees.  

Simultaneous with the enactment of no-fault divorce, New York enacted guidelines for awarding temporary maintenance.    

 The stated purpose of the guidelines was to provide consistency and predictability for temporary maintenance awards in the same way that the child support guidelines do.

Pursuant to the guidelines, maintenance is to be awarded during the divorce when one parties’ income is less than 2/3’s of the other spouse’s income.  

The amount of maintenance is to be the lesser of a) 30% of the payor’s income minus 20% of the non-payor’s income or b) 40% of the combined income minus the non payor’s income.  (New York Temporary Maintenance Calculator)

Income for calculation of temporary maintenance is to be capped at $500,000.   Therefore, the maximum temporary maintenance award (when one spouse earns $500,000 and the other spouse has no income) is $150,000 per year or $2,885 per week.  

The guidelines shall not apply to incomes less than the self-support reserve (135% of the Federal Poverty Guidelines currently $14,620/year).

In awarding temporary maintenance, judges may also consider a host of factors including the duration of the marriage, the martial lifestyle and the party’s prospects of employment. 

While I took a short break from writing this blog, the Appellate Divisions have been very active, having decided several matrimonial cases of interest. In the next couple of posts, I will try to catch-up and discuss some of these recently decided cases.

In Graev v. Graev, the First Department, sought to answer the question, when does an ex-spouse’s cohabitation with another adult result in a forfeiture of maintenance payments?

Domestic Relations Law § 248 allows the court to eliminate maintenance upon proof that the wife is habitually living with another man and holding herself out as his wife. What happens when the parties have an agreement that merely provides that maintenance is to stop when the recipient of the spousal maintenance cohabitates with someone for some period of time?

In Graev, the parties had a settlement agreement which provided that maintenance would terminate upon “the cohabitation of the Wife with an unrelated adult for a period of sixty (60) consecutive days.”

The Court in a 3-2 decision, certain to appealed to the New York’s highest court, the Court of Appeals, ruled that the merely living together is not cohabitation sufficient to terminate maintenance. In order to terminate the maintenance, the Court ruled there must an economic component to the cohabitation.

Two Justices, in dissent, criticized the majority for not giving the word “cohabitation” its plain dictionary meaning.


Ultimately, the Court of Appeals will decide if merely living together is enough to constitute cohabitation sufficient to terminate the maintenance payments or whether there must be something more, i.e., a sharing of expenses. In the meantime, draftsmen of agreements need be particularly careful to specifically define all of the events that terminate the payment maintenance.

Postings in two divorce and family law blogs highlight a growing conflict between the states on how to deal with a parties continuing obligation to pay alimony or maintenance, as it called in New York, if the former spouse enters into a domestic partnership.

To frame the issue, what happens if you are obligated to pay maintenance to your ex, but your ex rather than  re-marrying, enters into a domestic partnership? A number of states have enacted civil union or domestic partnership statutes which grant same sex couples some, but not all, of the rights and privileges of marriage. Maintenance or alimony typically terminates when the receiving spouse remarries.

The New Jersey Law Blog provides an excellent survey of the issue, contrasting a case from Virginia, which held as a result of the domestic partnership alimony should terminate, and one from Oregon, which held that the support obligation should continue.

The Florida Divorce Blog reports on a California decision in which the court ruled that a domestic partnership “is mere cohabitation and not a marriage.” Therefore, the alimony payments were ordered to continue.

To avoid uncertainty and litigation, this issue must be addressed in a settlement agreement at the time of divorce. If it is the parties’ intention that maintenance should terminate in the event of a cohabitation (same sex or opposite sex), the entry into marriage or a domestic partnership or civil union, the settlement agreement should make special provision. The failure to address t his issue exposes the parties to an unknown and presently unpredictable future determination.

A bankruptcy filing does not discharge an obligation to pay child support.   To the contrary, since other debts are discharged, funds that might have been paid toward other debts can be freed up to pay child support.

The Child Support Blog cites the recent case of  former NFL wide receiver André Rison to illustrate this point.  A bankruptcy court  ordered Rison into involuntary bankruptcy so that  $105,000 in child support arrears can be paid.

While some unsecured debts can be wiped out or reduced in a bankruptcy, other obligations, like child support, are "nondischargeable." This means that the bankruptcy filing does not wipe them out or reduce them. These debts must be paid regardless of the bankruptcy.

In fact, the 2005 revisions to the Bankruptcy Code made “domestic  support obligations” like alimony and child support a top priority. In order to obtain a discharge under Chapter 13, the debtor must provide for full payment of priority debts, including arrearages in domestic support obligations and certify that all post-petition domestic support obligations have been met.

One product of women earning as much as or even more than men is that more wives are paying alimony (maintenance in New York) to their ex-husbands. Forbes Magazine reports that another by-product is that as men set their sights on women's earnings, women have become more protective of those dollars.

In fact, according to the American Academy of Matrimonial Lawyers, 44% of attorneys included in a recent survey said they've seen an increase in women asking for prenuptial agreements over the last five years, where in previous decades, prenuptial agreements were almost always sought by men.

A lot of women are indignant now that the shoe is increasingly on the other foot, says Carol Ann Wilson, a certified financial divorce practitioner in Boulder, Colo. "There's this sense of, 'What's yours is ours, but what's mine is mine,'" Wilson says. "My first response to that is, 'All these years we have been looking for equality; well, this is what it looks like.' I think women get angrier about having to pay than men do.

Just as some women object to men's request for spousal support, some men are particularly uncomfortable seeking it. Either they find it emasculating to ask, or they find the idea of receiving an allowance from their ex-wives humiliating, according to divorce attorneys.

As a practical reality, I have not seen  many cases where the husband seeks spousal support, though there really should not be a “legal” bar to their being granted support.  After all, the law is supposed to applied in a gender neutral manner.

However, because of systematic basis, the law has not always been applied in a gender neutral manner.  Indeed, until recently, how many men won custody of their children?  It was the conventional wisdom that there really  had to be something  wrong with a mother for her to have lost a custody fight. . 

Moreover, there may be a social stigma to a man seeking support from his wife.  Indeed, Forbes confirms that “Some men avoid the embarrassment by seeking a bigger bite of the marital assets instead of asking for alimony. Not only do lump-sum payments save them the humiliation of accepting monthly support, but they also reduce the ex-husband's taxes, since spousal support payments are taxed, while assets are not.”

There is much speculation on the web and in the blogs, for those who really care, that Britney Spears did not pick November 6 as the day to file for divorce from Kevin Federline by accident.

She filed two years and one month from the day of her marriage, on Oct. 6, 2004. Her prenup, according to legal theorists, evidently carried increases for Federline for every year of their marriage. And those deadlines, they say, likely had 30-day grace periods.

Hence, Nov. 6 would have been Britney's last chance to get out of paying a third year of alimony settlement to a basically talentless slacker who was a drain on her finances.

And in the end, money is probably what Spears’ divorce is all about. Since she deliberately showed off a new trim body on David Letterman’s show the other night, Spears is obviously getting ready to go back to work. If a new album and tour are on the boards, Spears obviously doesn't want to share the proceeds with Federline. It was clearly better to get out now, so that K-Fed can lay claim to only half of Spears’ earnings during what has been the most fallow period in her career.

Since celebrity cases oft provide good facts to illustrate how the legal system works, I thought I would offer my two cents.   It is not uncommon for the provisions of a pre-nuptial agreement to make payments (either the amount of money or the duration of payments or both) conditioned on the length of the marriage. 

In Britney's case, divorce became a consideration as a triggering or measurement date in the pre-nup approached.  Britney elected to cut her economic losses. 

Perhaps, her "poor" husband's motive  for contesting the divorce is economic,  too.   If he is successful, then  he may be entitled to whatever rights he would have acquired on the third anniversary of marriage. 

Look for a settlement, soon.

The old adage is, “Only a fool has himself for a lawyer.” But every once in awhile a case is reported to prove that it is even more foolish for a lay person to represent himself instead of retaining an attorney.  

   Certainly, this would seem to be the rule in cases in which the parties plan to sign an agreement, whether it be a pre-nuptial, post-nuptial or separation agreement. In order to be enforceable and valid, a marital agreement not only has to be signed and notarized, but “subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. Dom Rel. L. §236(B)(3)(emphasis added).

  The failure to properly acknowledge an agreement will invalidate it, rendering it unenforceable.

  In a recently reported case, the parties signed a handwritten post-nuptial agreement, which provided that a cooperative apartment would be purchased by Wife for $750,000 and would remain her separate property. She, alone, would be solely entitled to all of its income and profits.   The parties signed the one page agreement before a notary. The agreement was, however, not acknowledged. 

 Years later, when the parties divorced, the property was valued at $2,300,000. The husband contended that since the agreement was not executed as required by statute, the agreement was not valid. The Court agreed.    

  In an earlier case, the Court of Appeals,   Matisoff v. Dobi. 90 N.Y.2d 127, 659 N.Y.S.2d 209 (1997) explained why the law requiring the agreements to be acknowledged is absolute. 

Primarily, a bright-line rule requiring an acknowledgment in every case is easy to apply and places couples and their legal advisers on clear notice of the prerequisites to a valid nuptial agreement. Consequently, spouses or prospective spouses will not need to speculate as to whether the enforceability of their agreements will be supported by their original motivation or subsequent economic relationship during the marriage. Certainly, consistent and predictable enforcement is desirable with regard to such important marital agreements. . .

Acknowledgment, moreover, serves a valid purpose apart from prevention of fraud. Marital agreements within section 236(B)(3) encompass important personal rights and family interests. As we explained with regard to the similar prerequisites for proper execution of a deed of land:

 "When [the grantor] came to part with his freehold, to transfer his inheritance, the law bade him deliberate. It put in his path formalities to check haste and foster reflection and care. It required him not only to sign, but to seal, and then to acknowledge or procure an attestation, and finally to deliver. Every step of the way he is warned by the requirements of the law not to act hastily, or part with his freehold without deliberation"

(Chamberlain v Spargur, 86 NY [603] at 607, supra).

Here, too, the formality of acknowledgment underscores the weighty personal choices to relinquish significant property or inheritance rights, or to resolve important issues concerning child custody, education and care.

Certainly, had the Wife in the recent case sought the aid of counsel in preparing the marital agreement, the agreement would have been properly acknowledged. The valid agreement would have rendered the wife immune to the husband’s claim of entitlement to her property.   The wife’s two million dollar asset would have been fully protected. I would have to guess that the value of the asset to be protected dwarfed the attorney’s fee “saved” by the wife. 

Paul McCartney announced recently that he was seeking a divorce from his present wife Heather Mills. The question most frequently asked, is why didn’t Paul (since we all seem to familiarly call him by his first name) have a pre-nuptial agreement. Whatever the reason he didn’t we can only speculate.

Regardless, I believe that under New York law, most of his assets would be safe.    Paul acquired most of his wealth prior to his current marriage so that would be his separate property and, therefore, beyond the claims of his current wife. Where Sir Paul has exposure is on the issue of spousal maintenance. Certainly, Heather Mills became accustomed to living the jet set lifestyle enjoyed by one of the richest men in the world.   She has the right to continue to enjoy that lifestyle.  

How it will play out in the English system, and what Paul will have when he turns “64”, only time will tell.”