On October 25, 2011 the New York State Law Revision Commission held a round-table discussion to review New York’s spousal support, i.e. “maintenance” statute, Domestic Relations Law §236(B)(5-a, 6). The discussion precedes a final report which that Commission is required to render under a mandate imposed by the Legislature when new laws concerning temporary maintenance, interim counsel fees and no-fault divorce were adopted last year. In part, the Commission was charged to:
review the maintenance laws of the state, including the way in which they are administered to determine the impact of these laws on post marital economic disparities and the effectiveness of such laws and their administration in achieving the state’s policy goals and objectives of ensuring that the economic consequences of a divorce are fairly and equitably shared by the divorcing couple . . . .
Lee Rosenberg, chair of the Nassau County Bar Association Matrimonial Law Committee, noted that last week’s round-table discussion revealed a gap in opinions. Those advocating for lower income women and domestic violence victims believed that the interim temporary maintenance statute enacted last year should remain in effect, with permanent guidelines leaving little to judicial discretion needed as well. The rest of the attorneys and judges believed a “one size fits all” formulaic approach did not work, created more litigation and did not do justice for both parties.
Mr. Rosenberg commented that if there was any majority view, it was that the temporary maintenance statute needed a major overhaul or complete repeal, except perhaps in lower income cases. Courts should retain real discretion to consider long-established factors in making any award, temporary or final.
A Preliminary Report on Maintenance Awards in Divorce Proceedings (Law Revision Report on Maintenance May 11 2011.pdf) was issued by the Law Revision Commission on May 11, 2011. That Report concluded that the 2010 temporary maintenance law sparked “intense debate over whether a formula should be used to calculate temporary maintenance.” To pursue its mandate, the Commission is reviewing reported appellate and trial court decisions awarding or denying temporary and/or final maintenance over the past 14 years. The Preliminary report presented a summary of the most recent decisions.
One step taken by the Commission in its review has already been canceled. It had been agreed that information drawn from nine counties be taken from responses in a new questionnaire required in all cases where child support has been ordered. That new form, UCS-11A, was discussed in the blog post of April 18, 2011. However, during past summer, use of the new form was suspended, and its predecessor, UCS-111, once again required.
In the absence of complete data, the Preliminary Report relied heavily upon “anecdotal concerns,” comments from lengthy interviews with judges and lawyers. The primary focus of those discussions had been the presumptive temporary maintenance awards, although permanent (post-divorce) awards were discussed, as well.
Many attorneys thought that concerns about inequitable and unpredictable results were more appropriate in cases where the parties’ income and assets were more limited. Cases involving substantial assets and income tend to have significantly more variables and options for a court to consider when dividing assets and awarding maintenance and child support. Consequently, it was suggested there should be a way to resolve the termination of marriage with limited assets and income in an expeditious and reasonably inexpensive manner, both as to cost and time.
The Preliminary Report revealed concerns over temporary maintenance awards which included:
- guidelines should provide a definition of what temporary maintenance is designed to cover;
- the formula does not address the actual needs of the parties to maintain the status quo pending the outcome of the divorce proceedings and reduces the court’s flexibility;
- determining a spouse’s unrecorded or under‑reported income is difficult at the commencement of the proceeding so the award may not properly reflect actual available income;
- expenses reported by the parties tend to be fairly accurate and thus a better guide for setting temporary maintenance;
- the court should continue to consider reasonable needs and earning capacities or the spouses so that application of guidelines does not create a windfall to certain payees or create a hardship to payor spouses, especially custodial spouses, who may be unable to meet their and their children’s reasonable needs;
- the application of the formula to income producing property during the pendency of the proceeding forces the court to decide whether 10 use the property for support or preserve it for equitable distribution;
- treatment of income from jointly owned property during the pendency of the proceeding needs to be clarified;
- evidence of certain statutory factors which could support an adjustment to the presumptive amount is generally not available prior to discovery and trial;
- if the presumptive award is too high, the court may be unable to order the payment of additional money to pay actual expenses such as the mortgage;
- the tax consequences to both parties need to be clarified;
- the use of a formula for temporary maintenance often creates unrealistic economic expectations which will inhibit settlements;
- using a formula for temporary maintenance will inhibit any reductions in final awards;
- using a formula for temporary maintenance will contribute to delays in the proceedings because if the awards are high the payee spouse will have no incentive to bring the matter to a conclusion; and
- consider eliminating the formula altogether whenever combined income exceeds the cap.
Concerns regarding for post‑divorce maintenance awards included:
- using a formula fails to take into account the varying costs and standards of living across the state; right now upstate practitioners see the presumptive awards as too high and downstate practitioners see the presumptive awards as too low;
- the payor’s eventual retirement needs to be considered in how the payment of a post‑divorce award will play out;
- the standard for modification of a presumptive award needs to be changed because the current standard of “undue hardship” is difficult to satisfy and will likely be more so where a formula dictates the award;
- neither side should be able to use a formulaic result as a way to bankrupt the other spouse;
- the guideline should be advisory rather than presumptive;
- if a presumptive formula were to continue, its application should be capped at $130,000 − the same amount as the child support guideline, subject to adjustment according to the cost of living index or in tandem with the child support guidelines;
- if the income is above the cap, the factors should be used to determine the entire award, and the formula should have no application;
- guidelines should be advisory, rather than mandatory; mandatory application will discourage payee spouses from increasing their earned income;
- where the assets in a case exceed a certain threshold, the formula should not be applied given the ability to earn investment returns on such assets; and
- in considering duration of maintenance, courts should consider the parties’ reasonable retirement ages and financial resources, including retirement benefits.
The efforts of the Law Revision Commission are to be loudly applauded. So to the contributions of the representatives from the American Academy of Matrimonial Lawyers, the Family Law Section of the New York State Bar Association, the Post Marital Income Coalition, the Women’s Bar Association of the State of New York, and other Bar Associations and practitioners who took the time to contribute to the dialogue.
A consensus does seem to be emerging. Couples of modest means should be provided with a quick and inexpensive process and presumptive guidelines to end their marriage.
However, where high income, assets or other issues are present, application of a formula is likely to prove unjust and inappropriate. In such cases, matrimonial judges should be given the power and discretion to balance issues of maintenance, child support and equitable distribution guided by both traditional and reconsidered factors. Financial projections should be presented which reveal the likely futures of the parties. The trial judge should be able to make an award based on equity and fundamental fairness in light of all of those factors. Wo formula can do that.
Following a formula is often the easy way out, doing injustice to the parties and the legal system, itself. The court system should be better than that.