When the New York “no-fault” divorce statute took effect in October 2010, in addition to permitting a divorce to be granted without finding either party at fault, the law provided a formula for calculating temporary spousal maintenance (DRL §236[B]5-a). While no formula or specific rules were set forth regarding maintenance awards post-divorce, the statute set up a law revision commission, which was directed to, among other things, review New York’s maintenance laws and make recommendations to the legislature regarding statutory revisions.
On May 15, the commission issued its “Final Report on Maintenance Awards in Divorce Proceedings.” According to the commission, its recommendations resulted from “an effort to strike a balance” between “individualized treatment for each marriage” and “predictability and consistency of awards.”
In doing so, the commission reasoned, “this balance can be struck by taking into account the differences between cases with limited assets and income on the one hand, and cases involving substantial assets and income on the other. In the former, the court has fewer options in granting awards and it is less likely that either party is represented by counsel; in the latter, the court has more variables to consider, more options in crafting relief, and both parties are more likely to have counsel.”
The commission recommended that temporary maintenance calculations be applied to the first $136,000 of combined adjusted income, rather than the first $500,000 in the current statute. The court still has the power to vary the maintenance award based on discretionary factors if the court finds the presumptive award “unjust or inappropriate,” or if the parties earn in excess of $136,000. However, if the court does not follow the formula, it must provide a written or on-the-record explanation, and “the court must … set a date certain for the termination of the award so that the duration of the award does not exceed the length of a short term marriage.”
To calculate post-divorce maintenance, the commission proposed using the temporary maintenance calculation already in the Domestic Relations Law, and again recommended a guideline of $136,000 combined adjusted income be employed, with the “cap” to be adjusted biannually. Like with temporary maintenance awards, the court would have discretion to fashion a different award based on the circumstances of the case.
Further, the commission recommends that post-divorce maintenance awards should continue take into account the parties’ assets. However, “based on a widespread consensus,” the commission wants a party’s “increased earning capacity” to “no longer be considered as a marital asset, and that any spousal contribution to the career or career potential of the other party be addressed in an award of post-divorce income.”
The commission based its position on the “intangible nature, the speculative nature of its ‘value’ as well as the costs associated with valuations, and problems of double counting increased earnings in awards of post-divorce income and child support.” New York is the only state to regard “enhanced earnings” as a marital asset, and those of us who practice matrimonial law have all witnessed the problems expressed by the commission.
Regarding duration of final maintenance awards, the commission proposes only that they be based on a consideration of the length of the marriage, the length of time necessary for a party seeking post-divorce income to acquire sufficient education or training to enable that party to find appropriate employment, the normal retirement age of each party as defined by the Internal Revenue Code and the availability of retirement benefits, and any barriers facing the party with regard to obtaining appropriate employment such as child care responsibilities, health or age. The court must state the basis for the duration of the award in its decision granting the award.
Another significant recommendation from the commission is to modify spousal support under Family Court Act §412 so as to mirror the newly recommended Domestic Relations Law temporary maintenance provisions.
The final report is available online. It remains to be seen when and if the state legislature will modify the law to incorporate all or some of these recommendations.
Sara Stout Ashcraft is a partner in Ashcraft, Franklin, Young & Peters LLP. She concentrates her practice in the areas of matrimonial and family law.