ALIMONY REFORM BECOMES A REALITY
The Massachusetts legislature has finally passed a bill to reform the state's alimony law. It was signed by Governor Deval Patrick on September 26, 2011, and will take effect on March 1, 2012. This new legislation drastically changes the landscape of alimony law by providing rules and limitations for determining alimony awards, which are designed to discourage never-ending dependency on a payor spouse. The state's previous alimony law gave the courts broad discretion to determine alimony, but without any standards or guidelines & a result, alimony awards have been inconsistent, and often times, hindered the parties from a complete separation.
Although the new law still provides the court with discretion, it provides basic parameters that will allow divorcing parties and their attorneys to predict and plan for likely outcomes with much greater accuracy. The increased predictability of the new law may also encourage settlements in many cases that previously would have gone to trial simply because one party thought it would be advantageous to "roll the dice" to see what a judge would award. Although this well-intentioned change in the law will certainly provide a sense of relief and justice to many hardworking payor spouses, it may do so at the expense of others. The major changes in the law include:
- Categories of Alimony Defined. The new law creates four categories of alimony, each designed to address a specific type of need: (l) General Alimony, for an economically dependent spouse; (2) Rehabilitative Alimony, for a spouse who is expected to become economically independent in a defined period of time; (3) Reimbursement Alimony, to repay a spouse for contributions to the other spouse's financial resources; and (4) Transitional Alimony, to help transition a spouse to an adjusted lifestyle or location after divorce. The facts of each case will determine if a spouse is eligible for one or more types of alimony based on a list of factors applied by the court.
- Durational Limits on Alimony Created. The new law sets very specific limits on the duration and dollar amount of alimony. For example, the length of the marriage will now determine how long General Alimony payments can last in the following manner: (1) marriages that are 5 years or less allow alimony for up to half the length of the marriage; (2) marriages between 5 and 10 years allow alimony up to 60% of the length of the marriage; (3) marriages between 10 and 15 years allow alimony up to 70% of the length of the marriage; (4) marriages between 15 and 20 years allow alimony up to 80% of the length of the marriage; and(5) marriages 20 years or more allow lifetime alimony. The remaining types of alimony are limited as follows: Rehabilitative Alimony can only be granted for 5 years, but may be extended; Reimbursement Alimony is terminated upon death or a specific date, but cannot be modified; and Transitional Alimony cannot be granted for more than 3 years and cannot be modified. In addition to the general durational limits, the new law declares that the death or remarriage of the receiving spouse will terminate alimony. The law further states that alimony can be suspended if the receiving spouse lives with someone for more than 3 months; however, alimony can resume if the cohabitation ends. Perhaps the most desirous provision provides that General Alimony terminates when the paying spouse reaches the age of retirement.
- Alimony Amount Limited. The new law also imposes limits on the amount of alimony that can be awarded. The new law provides that except in extraordinary circumstances, alimony should not exceed the recipient's need or 30-35% of the difference between the parties' gross income. Moreover, the following are excluded from the parties' gross income: income from capital gains, dividends and interests from assets subject to equitable division; and gross income the court has already considered for setting a child support order. However, the court may attribute income to a party who is unemployed or underemployed for purposes of determining alimony.
- Modification of Existing Alimony Judgments. The new law also establishes clear rules regarding the modification of alimony judgments. One of the most significant changes is that in the event that the alimony payor remarries, his or her new spouse's income and assets cannot be considered to re-determine alimony. Furthermore, a payor spouse with a fulltime job who begins to receive income from a second job or overtime will have a presumption that the new income is immaterial to alimony. Finally, and in anticipation of a flood of modifications for existing alimony judgments, the new law provides that modification based only on the passage of the law is not permitted for existing alimony judgments unless they have already been in effect beyond the durational limits proscribed by the new law. Regardless, it is likely that the new law will prompt an increase in modifications filed by payor spouses to reduce or terminate pre-existing alimony awards.
Most people anticipate that the new alimony law will drastically alter the landscape of alimony. In the short term, the most immediate effect will likely be an increase in complaints for modification filed by payor spouses who are eligible to reduce or eliminate their pre-existing alimony payments -especially in cases where their former spouses are living with a new significant other. The long term effects of the new alimony law are difficult to determine; however, it is anticipated alimony determination will now be more predictable; and that the law will have a similar effect as the existing child support guidelines, helping to shape expectations prior to a divorce even being filed.