ALBANY – New York should adopt a mathematical formula to determine both the temporary and post-divorce maintenance due the non-monied spouse in a dissolving marriage, a state commission has recommended (See Report).
The Law Revision Commission said on May 17 that the proposed statewide formula would apply to the first $136,000 of a couple’s combined annual adjusted gross income.
Courts would have the discretion to adjust an award if it were to be too harsh or inequitable, guided by a set of statutory factors when considering an additional award from income exceeding $136,000.
The panel said the formula would function similarly to one used to award child support and, in fact, should be indexed with it. The income ceiling is adjusted every two years according to changes in the Consumer Price Index.
About 50,000 divorces are finalized each year in New York state.
"The commission’s recommendations are an effort to strike a balance between predictability and the uniqueness of each marriage," chairman Peter Kiernan of Schiff Hardin said in a statement.
"Where the parties have limited assets and income, the court has fewer options in granting awards and it is less likely that either or both parties are represented by counsel," he said. "Where the parties have greater, more complex assets and income, the court has more variables to consider, more options in crafting relief, and both parties are more likely to have counsel."
Other recommendations are:
• Abandoning consideration of one party’s "increased earning capacity" as a marital asset. The commission said this provision in §236B(5) of the Domestic Relations Law, as interpreted by the state Court of Appeals in O’Brien v. O’Brien, 66 N.Y.2d 576 (1985), has caused "much dissatisfaction and litigation because of the asset’s intangible nature" and is best addressed in an award of post-divorce income.
• When determining the length of post-divorce maintenance, the court should take into consideration the length of the marriage, the time required for the non-monied spouse to acquire sufficient education or training to find appropriate employment, the age of the non-monied spouse and other factors.
• Temporary maintenance payments involving a spouse in a short-term marriage should not last longer than the marriage.
The commission’s recommendations stem from New York’s 2010 adoption of no-fault divorce (NYLJ, July 6, 2010).
At that time, advocates for spouses who had few assets of their own feared they would not get the temporary maintenance they deserved because they could not afford attorneys.
The no-fault divorce law was accompanied by a statute requiring courts to consider 19 financial factors when determining maintenance payments due the non-monied spouse. The statute capped at $500,000—the cap has since increased to $524,000 because of changes to the CPI—the income that can be applied to an interim award.
But the new temporary maintenance rules have attracted criticism (NYLJ, Oct. 12, 2011).
Judges complained they were asked to take into account factors in temporary maintenance awards, such as the income that is to be distributed equitably between a couple, that had traditionally not been considered in interim maintenance.
Attorneys said the rules were too rigid and took discretion away from judges.
The commission was ordered by the Legislature when it adopted no-fault divorce to study the awarding of maintenance, both pre- and post-divorce, and to report to lawmakers on possible improvements.
The commission said it consulted with judges, matrimonial lawyers, bar groups and other organizations to devise its recommendations.
Assemblywoman Helene Weinstein, a Brooklyn Democrat who chairs the Assembly’s Judiciary Committee, said on May 17 that she wanted to study the commission’s recommendations and hoped there was still time in the last five weeks of the 2013 legislative session to pass proposed changes.
The formulaic approach recommended by the commission to awarding maintenance, both pre- and post-divorce, makes sense, at least conceptually, Weinstein said.
"I think it’s very important to have predictability," she said. "I think it helps to reduce litigation."
A bill introduced last month would make different changes to the temporary and permanent maintenance systems than those proposed by the Law Revision Commission.
A6728/S5168 would maintain the income cap at $524,000 and extend it to final maintenance awards. It also would not terminate spousal support upon the remarriage of the recipient spouse, as current law provides, but allow judges to determine if support should be terminated according to the extent that the recipient spouses financial circumstances have improved after remarriage.
A6728/S5168 is being sponsored by Assemblywoman Amy Paulin, D-Scarsdale, and Senator Jack Martins, R-Mineola.
The Law Revision Commission said it found the $500,000 income guideline "too high," but that it had wrestled with arriving at an acceptable lower amount because of the often vast differences in income levels of New Yorkers.
It said it chose the $136,000 standard because state tax and income statistics indicate that roughly 85 percent to 90 percent of New Yorkers filing jointly or individually make $136,000 or less.
Michael Stutman, a partner at Mishcon de Reya and president of the New York chapter of the American Academy of Matrimonial Lawyers, said the commission’s recommendations would be a "tremendous step forward" if adopted by the Legislature.
Use of a formula with an income "cap" of $136,000 would "make it easier for New Yorkers of more modest circumstances" to reach a determination on final maintenance "with more speed and less expense than they have before," Stutman said.
Stutman called the commission’s recommendation for abandoning O’Brien on valuation of a spouse’s increased earning capacity an "absolute watershed event" that he said could be as important in matrimonial matters as applying a mathematic formula to both pre- and post-divorce maintenance.
Lee Rosenberg of Saltzman Chetkof & Rosenberg in Garden City said he was pleased that the commission recommended dropping a couple’s income to $136,000 from $524,000 for temporary maintenance calculations.
But Rosenberg said he was less enthusiastic about using the same income figure as a basis for a final maintenance award, when other assets of a couple will also be factored in.
"Is it fair to use a temporary number as a final number and then do a division of assets?" Rosenberg said. "I am not so sure about that."
In addition to Kiernan, who was former counsel to governor David Paterson, other commission members are Michael Hutter, a partner at Powers & Santola in Albany; John Ryan, a partner at Ryan & Brennan in Floral Park; John Cirando, a partner at D.J. and J.A. Cirando in Syracuse; and Jay Carlise, a professor at Pace Law School.
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