In the Alimony Reform Act of 2011, St. 2011, c. 124 (“the Act”), “alimony” is defined as “the payment of support from a spouse, who has the ability to pay, to a spouse in need of support for a reasonable length of time . . . .” G. L. c. 208, § 48. However, because neither “ability to pay” nor “need of support” are defined in the Act, Probate and Family Court judges are given the discretion to balance numerous other factors, such as the parties’ ages, health, incomes, and economic and non-economic contributions to the marriage, in order to arrive at a fair alimony award. See G. L. c. 208, § 53 (a).
The use of the phrase “need” in the Act – how to define it, and the role it plays in a judge’s determination of an alimony award – has been an ongoing debate for family law practitioners in Massachusetts. The Supreme Judicial Court, in the recent case of Young v. Young, issued a ruling which provides some clarification on how “need” should be determined.
The parties in Young were married for over twenty years. At the time of the divorce filing, the husband worked as a high-level financial executive, earning a base salary as well as compensation through various compensation systems, such as stock options and bonuses. The husband’s gross income ranged from $1.53 million in 2008 to nearly $8 million in 2011 and 2012. Because the husband’s gross income had generally increased throughout the years of the marriage, the parties’ station in life had increased correspondingly. By the time of their separation, the parties lived an affluent lifestyle, purchasing designer clothing and handbags, living in a lavish home, driving luxury vehicles, and sharing expensive vacations.
At trial, the judge found that the wife, who had acted as a stay-at-home parent by agreement with her husband, did not have the present ability to become employed at a level which would allow her to maintain a similar lifestyle. Thus, although it was clear that the wife would receive alimony, the judge was left to determine the appropriate amount based on the factors in the Act.
Ultimately, the judge chose not to order a fixed alimony award. Instead, she ordered the husband to pay the wife thirty-three percent of his gross annual income each year, whatever that amount might be after accounting for income received from both his salary and other compensation systems. The judge reasoned that, because the husband’s income was “on an upward trajectory,” and because the parties’ lifestyle needs had expanded correspondingly during the marriage, a percentage-based general term alimony award which increased commensurate with the husband’s gross income, even after the divorce, would best allow the wife to maintain her standard of living.
Upon review, the SJC held that the trial judge had erred in two distinct ways. First, the SJC wrote that, although “[t]here may be cases in which a variable or contingent award is warranted . . . such cases are the exception rather than the rule, and must be justified by the special circumstances of the case.” Because the husband possessed considerable assets, the SJC concluded that his ability to pay a fixed alimony award to the wife would not be materially affected by his variable salary. Accordingly, the percentage-based award was held to be inappropriate on the facts of the case.
Secondly, the SJC held that the trial judge had misconstrued the phrase “need of support” in the Alimony Reform Act when she awarded the wife general term alimony with the goal of allowing her to increase her standard of living proportionately to the husband’s income, even following their divorce. The SJC held that “the need for support of the recipient spouse (here, the wife) under general term alimony is the amount required to enable her to maintain the standard of living she had at the time of the separation leading to the divorce, not the amount required to enable her to maintain the standard of living she would have had in the future if the couple had not divorced.” Thus, although it was fair for the judge to award the wife an amount of alimony intended to allow her to live the more expensive lifestyle to which she had grown accustomed by the end of the marriage, the judge should not have considered the husband’s future potential earnings as part of her evaluation of the wife’s “need for support.”
The SJC’s ruling provides an important consideration for high asset divorce cases in which alimony is a contested issue. Even if one spouse is on a trajectory to earn a progressively higher income in the years following the divorce, the Young decision limits the other spouse’s ability to share in any future wealth, at least in the form of alimony. Instead, the recipient spouse’s “need of support” must be measured by considering his or her station in life as it exists at the time the alimony order is issued.
Should you have further questions about alimony in Massachusetts, please feel free to contact Fitch Law Partners.