The New Alimony Bill
Three years ago, Governor Rick Scott vetoed a controversial alimony reform bill at least in part because it had a retroactive provision, which likely made it unconstitutional. Today another controversial alimony reform bill (the new alimony bill) sits on his desk awaiting either his signature or another veto. What will he do? No one knows for sure. He has fourteen days to sign it or veto it. If he does neither, it becomes law.
This new alimony bill also has a “retroactive” aspect to it, but it may pass constitutional muster. The new alimony bill will apply to modifications of alimony awards entered prior to the effective date of the bill, but, unlike the bill vetoed three years ago, the enacting of the new alimony bill itself cannot be the sole basis for the modification. In other words, merely running the new formulas to the incomes existing at the time of the prior entry of the judgment and getting new alimony numbers will not be enough to get a modification under the new alimony bill’s presumptive amounts. There will need to be an independent substantial change in circumstances, for example, an involuntary substantial reduction in the payor’s income, a substantial increase in the payee’s income, or perhaps a substantial reduction in the payee’s needs.
The new alimony bill requires formula calculations for the amount of alimony based on the number of years of marriage and the difference in the two spouses’ incomes. The court must determine a high presumptive amount and a low presumptive amount. The two presumptive calculations are rather simple: High presumptive amount is: (0.020 x [number of full years of marriage] x [difference between husband’s gross monthly income and wife’s gross monthly income]). Low presumptive amount is: (0.015 x [number of full years of marriage] x [difference between husband’s gross monthly income and wife’s gross monthly income]). The high and the low presumptive amounts create a “presumptive alimony amount range.”
There is also a “presumptive duration range” for the length of alimony. The short range is 25% of the length of the marriage and the long range is 75% of the length of the marriage.
Unless the judge awards a duration of 50% or less of the length of the marriage, the maximum length of any marriage for calculating the presumptive alimony amount high or low range is twenty (20) years. However, if the judge awards a duration of 50% or less of the length of the marriage, then the maximum length of the marriage for calculating the high range only is twenty-five (25) years.
The judge will have wide discretion to determine the actual amount between the high and the low presumptions and between the long and the short presumptive duration. However, in making this determination, the judge is required to consider thirteen specific factors, plus a fourteenth “catch all” factor of “any other factor necessary to do equity and justice” as long as evidence is properly presented as to each factor.
Under the new alimony bill can alimony awards ever be higher than the presumptive high or lower than the presumptive low? Yes! But only if after considering all of the fourteen factors, the judge specifically finds that the presumptive alimony amount range or durational range is inappropriate or inequitable.
What effect will this new alimony bill have on family-law litigation? For routine cases with W-2 employees and marriages of twenty years or less, it may make them much simpler and less costly. It may make most cases easier to settle, but that remains to be seen. At least three major areas will still likely require substantial litigation: (1) high vs. low amount and duration; (2) deviation from the presumptions; and (3) determining income and imputation of income.
High vs Low
Assume the following facts: Fifteen year marriage; Husband earns $10,000 per month ($120,000 annually) and Wife earns $4,166 per month ($50,000 annually). High presumptive alimony amount is $1,750.20 per month; low presumptive amount is $1,312.65. Best case for Wife and worst case for Husband is $1,750.20 per month for 11.25 years. Total payment to Wife = $236,277.00. Worst case for Wife and best case for Husband $1,312.65 per month for 3.5 years. Total payment to Wife = $55,131.30. The difference is $181,145.70.
Under a prior draft of the new alimony bill, the judge was guided by the fact that if the judge awarded more toward the higher presumptive amount, the judge should determine the duration more toward the shorter presumptive duration. If the judge awarded more toward the lower presumptive amount, the judge should award more toward the longer presumptive duration. Perhaps that is how most judges will make the awards in reality. However, that guidance is not in the final version of the bill. Thus, a great disparity in the possible presumptive awards clearly exists. Will parties litigate over $181,145.70 in alimony? Absolutely, and even less.
Deviation of Presumptions
Gone from the current alimony statute and a hallmark of alimony case law is the initial required determination that a party seeking alimony must first prove his/her “need” for alimony. Under the new alimony bill, no proof of any need is required, but the judge must still make a written finding that the payor has the ability to pay the award. The actual “need” for alimony may still be relevant, however, to a request for deviation of alimony.
Although permanent alimony no longer exists under the new alimony bill, alimony recipients in the long-term marriages will generally fare better than those of short and moderate term marriages. The general concept of the formulas is the longer the marriage, the greater both the amount and duration of alimony. Conversely, the shorter the marriage the lesser the amount and shorter the duration.
Many spouses will argue they are not able to meet their actual basic needs even at the highest presumptive alimony amount. The shorter the marriage, the more likely that may be true as to the amount. For example, in a ten year marriage the spouse will presumptively receive as alimony between 15% and 20% of the difference in income. Whereas, in a twenty year or more marriage, the spouse will receive between 30% and 40% of the difference in income. That’s twice as much for twice as long. So, perhaps the shorter the marriage, the more likely a spouse will seek a deviation in amount?
On the other hand, the longer the marriage the more likely the spouse will seek a deviation of the duration. Depending on the age of the parties at marriage, alimony in what was traditionally long-term marriages for stay-at-home wives even at the highest presumptive duration may terminate as early as 49 or 50 years of age. That’s seventeen years before retirement.
The payor spouse will possibly argue that the receiving spouse’s actual need is more than met by her own income and will seek a downward deviation.
The way the new alimony statute is written, almost every spouse seeking alimony will also seek a deviation. Only time will tell how the courts will rule on deviations.
Determination of Income and Imputed Income
Under the new alimony bill, a determination of each party’s actual income is very important. With respect to the law as it stands today prior to the new alimony bill, many high income spouses merely stipulated they had the ability to pay, and the issue was the amount of “need.” However, because there is no longer any requirement to show need and because the presumptive amounts depend strictly on the difference in income, the court will need to determine the exact amounts each party earns or has the ability to earn using best efforts.
The new alimony bill has more clearly defined income, “potential income” and “underemployment.” However, determining the actual income of the self-employed and business owners will still be a heavily litigated issue, as will imputing income to an unemployed or underemployed spouse.
This brief article merely scratches the surface of the new alimony bill. The new and novel issues the bill will raise if it becomes law are countless. If you or someone you know has issues or questions regarding alimony, you should seek consultation with a Florida Bar Board Certified Marital and Family Law attorney. Only Board Certified attorneys are permitted to represent themselves as specialists and experts in their designated area. Curtis R. Cowan and Michael Gilden of the Family Law Department of KOLawyers are both Board Certified Marital and Family Law attorneys. Call 954-525-4100. Ask for April to set up an appointment.