Alimony, also known as spousal support, is one of the most contentious issues couples face during a divorce. Spousal support is money paid by one spouse to another to compensate for financial inequities as the couple parts ways. It is based on a number of factors, including the couple’s standard of living during the marriage, the supporting spouse’s ability to pay, the duration of the marriage and the financial condition of the party seeking support, among other things.
Spousal support in California is commonly “rehabilitative,” meaning that it is intended to be a short-term solution that enables a spouse to get back on his or her feet. Alimony is awarded to enable a non-wage earning spouse to go back to school or to acquire needed skills that would enable the spouse to be competitive in the job market. In some circumstances, support payments can compensate for significant financial inequities caused when one spouse has chosen the role of homemaker over a long period of time.
Family court judges have broad discretion in awarding spousal support, but this may be curtailed if a new bill is signed into law. Senate Bill 481, introduced by Senator Rod Wright (D-Los Angeles) would require judges to consider the value of assets or income previously paid through the parties’ property settlement in determining alimony. The intent behind the bill is to limit “double dipping” by opportunistic spouses and to prevent inequitable results by double counting income.
Senator Wright previously authored a bill (Senate Bill 1482) that would allow alimony payors to request vocational examinations for recipients, and requiring judges to follow an examiner’s estimate of the recipient’s earning ability when recalculating support payments. The bill was signed into law in September 2010.
The double dipping issue could arise in a number of scenarios. For instance, with the allocation of pension benefits, a court could conceivably double count such benefits by first treating them as marital property to be awarded to the earner spouse. With that award, the court would then consider the benefits in determining the amount of alimony that should be paid to the non-earner spouse.
Proponents of the bill argue that this problem can also arise when considering the division of family-owned businesses, annuities and other property that could produce future income. A spouse who seeks to keep such an asset would have to “buy out” the other spouse’s share. However, the potential future income would then be counted in alimony considerations, even though a substantial amount would have been awarded as part of the property settlement.
If enacted, the bill could result in lower spousal maintenance payments. It has already been endorsed by the Family Law Section of the California State Bar Association, but has drawn sharp criticism from feminist groups, including the National Organization of Women (CA-NOW). Specifically, CA-NOW contends that:
“[S]pouses undergoing a divorce may choose to buy out assets from one another in order to maintain an asset as their own property. However, choosing to buy out an income-producing asset at current market value does not alter the fact that this asset will produce income in the future. As such, that income is rightly considered as part of spouse support determinations.”
Essentially, they believe that the characterization of such income should not be changed, because the property will still produce earnings.
In opposing the bill, the Commission on the Status of Women wrote that the bill:
“[W]ould alter the way in which spousal support is awarded in specified cases, unfairly targeting a spouse whose work and/or support during a marriage helped to start a business or create some other income-producing asset.”
Proponents seek to build a consensus that reforming California’s spousal support system is best for all divorcing parties, especially successful women business owners and executives who can be exploited by spousal support laws, just like men often have often been mistreated. Nevertheless, the bill will remain a contentious issue until it is resolved.
The bill is currently in the Senate Judiciary Committee, and has not reached the Senate floor. If you are in the midst of a divorce or believe that your marriage will be ending, it is important to consult a family law attorney to learn more about your rights and options.