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The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 8

Wednesday, January 24, 2018

Levine Dispute Resolution - Alimony

“Did stated intent of the
order trump the its effect?”

In Young v. Young, the Supreme Judicial Court (SJC) vacated the trial court judgment that awarded variable alimony based on a fixed percentage of the husband’s gross pre-tax compensation, based in part on its conclusion that it crossed the Alimony Reform Act (ARA) (eff. 3.1.12):

…[B]ecause [the order] was intended to award the wife an amount of alimony that exceeds her need to maintain the lifestyle she enjoyed during the marriage. (Italics ours)

By focusing on the intent of the order, we can only infer that the court was addressing the judge’s rationale for the order, instead of the order itself. That election matters, because it raises two questions:

  1. If the trial judge explained herself differently, might the SJC have upheld the judgment?
  2. If the SJC looked at the order in its full ramification, would it have impacted the outcome?

The actual support award in Young was bi-lateral, rising and dropping with the husband’s income, a fact eclipsed by the court’s sharp focus on intent. Thus, while the trial judge may have focused her analysis of the parties’ rising station, her order actually provided downside protection for the husband, too.

Had the judge expressed an intent to protect the husband in the event of income decline and stressed it concomitantly with the potential for “upside”, might the “intent” infirmity that the SJC seized upon been neutralized? Or, if the judge had found that a family with roller coaster income might experience corresponding lifestyle flux?

After all, as the SJC observed:

    There may also be special circumstances where an alimony award based on a percentage of the supporting spouse's income might not be an abuse of discretion, such as where the supporting spouse's income is highly variable from year to year, sometimes severely limiting his or her ability to pay, and where a percentage formula, averaged over time, is likely not to exceed the needs of the recipient spouse.

The SJC dealt with the former, but not the latter.

 

Why was the GOP out to get Alimony?

Monday, January 22, 2018

Levine Dispute Resolution - Alimony

Well, they did it. In December, Congress repealed the alimony deduction, and as a result, support for divorce families will become more expensive and less generous, beginning in 2019.

Unbeknownst to us, the federal alimony deduction was on Republican chopping block wish list for a long time, with previous failed repeal attempts in 1984 and 2014. Few of us thought it important enough to the president or the GOP caucus to actually make it happen this time, especially when the senate bill did not mention it in its bill. Boy, were we wrong.

The question is: why?

To save majority lawmakers from having to reach actual consensus with Democrats, God forbid, by keeping the red ink caused by the 2017 Tax Cuts and Jobs Act below $1.5 trillion over the next ten years, permitting a budget reconciliation maneuver and permitting passage on Republican votes only?

Whatever happened to simplification and revenue neutrality: watchwords of tax reform and Republican faith, for as long as memory serves? Not this Congress, and not this time.

But, really, how much did it help that cause? According to the House Ways and means Joint Committee on Taxation, repeal of the alimony deduction, upon which divorcing families have relied for three-quarters of a century, will “save” $8.3 billion from the aggregate deficit over 2018-2027. See here.

A drop in the bucket…

… especially in context. When a Fox Business reporter asked Treasury Secretary Mnuchin about the president’s abandonment of his campaign-guaranteed crackdown on carried interest preferences for private equity and hedge fund principals, which would have saved an estimated $100 billion over the same ten years, he blathered that, “…it’s not that much money…”. Really. Listen for yourself here.

So, we come back to “why”, if not budget reconciliation? Was it the moralism of Paul Ryan’s wing of the GOP, punishing divorcing families for their failings? If so, we are dangerously more like the theocratic regimes that our president loves to praise or castigate, depending on his momentary whim, than we like to believe.

In the meantime, families are the collateral damage. So much for family values.

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 7

Wednesday, January 10, 2018

“Is ‘need’ a floor or a ceiling?”

Levine Dispute Resolution - Alimony

This question does not rise from historic alimony law, which has long rested on the axiom that alimony exists to meet a recipient’s “needs”, as measured by the marital living standard.

But, the Alimony Reform Act (ARA) (eff. 3.1.12) created the question with its M.G.L., ch. 208, § 53(b), stating that general term alimony

    …should generally not exceed the recipient’s need or 30 to 35 per cent of the difference between the parties’ gross incomes…” (Italics ours)

Since the lawmakers did not specify “the greater of” or “the lesser of”, judges and lawyers (and we, in earlier blog entries) have been left to speculate about whether “need” functions as a “floor” for support.

Since the appellate courts have now branded 53(b) as the range a “reasonable and lawful order”, this question was critical.

Where the payor’s income capacity is more than sufficient to meet the recipient’s “need”, should the latter enjoy “upside” alimony, even if that raises him or her above the marital station? Or, does the marital living standard cap the payor’s exposure?

We have consistently suspected the latter, and we have said so during many conciliation cases, since we did not believe that the legislature intended to upend the time-honored linkage to need. If anything, the ARA signaled a reining in of alimony, not its expansion. But given the vagaries our appellate courts, we braced for another surprise.

It didn’t happen.

The SJC spoke plainly:

    Here, the percentage-based award ran afoul of the act and therefore was an abuse of discretion not because of its variable nature but because it was intended to award the wife and amount of alimony that exceeds her need to maintain this lifestyle she enjoyed during the marriage. (Italics ours)

Now, we know for sure: “need”, in the law, is a ceiling.

 



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