ARE ALIMONY GUIDELINES IN OUR FUTURE?
THE USES AND ABUSES OF VOCATIONAL EVIDENCE IN DIVORCE CASES
© 2003 National Legal Research Group, Inc.
The movement for alimony guidelines is now reaching critical mass, if Florida is any indicator. In Bacon v. Bacon, 819 So. 2d 950 (Fla. 4th DCA 2002), in a concurring opinion, Judge Farmer expressed his view that "broad discretion in the award of alimony is no longer justifiable and should be discarded in favor of guidelines, if not an outright rule." 819 So. 2d at 954. Judge Farmer recognized that under Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980), there has been a policy of discretion with respect to alimony. He noted, however, that the policy was under challenge in the literature. He believed alimony entitlements should be standardized to ensure that outcomes be more predictable, thus encouraging settlement and decreasing litigation. 819 So. 2d at 956.
Two months later, in Landow v. Landow, 824 So. 2d 278 (Fla. 4th DCA 2002), Judge Polen referred to Judge Farmer's concurrence when Judge Polen stated that broad discretion may not be the best policy and statutory guidelines should be established.
In most states, the standard for granting alimony is the "need" of the requesting spouse balanced against the ability to meet that need by the paying spouse. The problem with the "need" standard is that it is difficult to define the standard of living upon which such need is based. At what length of marriage should the standard of living be applied? Should generous payor spouses be penalized in a divorce with a high alimony payment to meet the standard of living, when parsimonious spouses are rewarded? Should public policy define a "middle class" standard when the payor spouse is able? Or a necessities standard? At what point do divorce laws cause people not to marry is this good public policy? All these questions are raised under the current common law standard. These questions also precipitate a more serious look at alimony guidelines. See Marti E. Thurman, Maintenance: A Recognition of the Need for Guidelines, 33 U. Louisville J. Fam. L. 971, 972 (1995).
The American Law Institute suggests a policy for compensatory payments. This is a payment to compensate the receiving spouse for loss of earning ability caused by the marriage. American Law Institute, Principles of the Law of Family Dissolution: Analysis and Recommendations 5.02, comment a (2002). The ALI principles in 5.03 propose five bases for compensatory payments, including:
(a) In a marriage of significant duration, the loss in living standard experienced at dissolution by the spouse who has less wealth or earning capacity.
(b) An earning-capacity loss incurred during the marriage but continuing after dissolution and arising from one spouse's disproportionate share, during marriage, of the care of the marital children or of the children of either spouse.
(c) An earning-capacity loss incurred during marriage and continuing after dissolution, and arising from the care provided by one spouse to a sick, elderly, or disabled third party, in fulfillment of a moral obligation of the other spouse or of both spouses jointly.
(d) The loss either spouse incurs when the marriage is dissolved before that spouse realizes a fair return from his or her investment in the other spouse's earning capacity.
(e) An unfairly disproportionate disparity between the spouses in their respective abilities to recover their premarital living standard after the dissolution of a short marriage.
These factors are not "income driven" as are guidelines; rather, they are factors which must be judicially determined. Nonetheless, formulas suggested by The Model Provisions Adopting Chapter 5 of the American Law Institute's Principles of the Law of Family Dissolution for factors (a) through (c) are income based. The suggested formulas for factors (d) and (e) add other variables such as the family's living expenses during the period of education or training and the amount of debt that remains from the period of education or training for factor (d), and the amount necessary for the spouses to recover the premarital standard of living for factor (e).
Many states' legislatures are considered in the use of alimony guidelines, but few have adopted specific formulas to determine alimony awards. The Georgia and Nevada Supreme Courts have recommended the adoption of alimony guidelines. Michigan has an Alimony Guideline Committee which has reviewed alimony guideline computer programs and recommends a particular one for use in that state. The developer of the Michigan alimony computer program has also recently developed software to determine alimony awards in Washington and Kentucky as well. Most areas which are using guidelines are doing so on a local or county-wide basis.
Pennsylvania has gone a step further by taking these factors and incorporating them into actual monetary guidelines which are statutorily mandated in temporary alimony situations. 23 Pa.C.S. 4322 (2002). Before the adoption of the guidelines in 1989, all support, including child support and alimony, was determined by analyzing the income and expenses of the parties, their assets, and the standard of living. That analysis led to uneven results from case to case and court to court. Prud'homme v. Prud'homme, 48 Pa. D. & C.4th 182 (2000). On September 6, 1989, the Pennsylvania Supreme Court promulgated new Rules of Civil Procedure which established the Uniform Support Guidelines effective September 30, 1989 mandating that temporary spousal support and child support be determined in accordance with the guidelines unless a deviation was warranted. The purpose of the Uniform Support Guidelines, which is explained in the comments of the rule, is to "promote (1) similar treatment of persons similarly situated, (2) a more equitable distribution of the financial responsibility for raising children, (3) settlement of support matters without court involvement, and (4) more efficient hearings where they are necessary." Pa. R.C.P. 1910.16-1, explanatory comment.
Section 3701, Pennsylvania Statutes, lists factors relevant in determining whether alimony is necessary and in determining the nature, amount, duration and manner of payment. 23 Pa.C.S. 3701 (2002). Once that threshold determination is made that alimony is necessary in a particular case, section 4322, Pennsylvania Statutes, provides that child and spousal support during the pendency of the dissolution shall be awarded pursuant to a statewide guideline, "so persons similarly situated shall be treated similarly." 23 Pa.C.S. 4322 (2002).
The statutory guideline is based on the reasonable needs of the child or spouse seeking support and the ability to pay of the supporting spouse. The guideline emphasizes net incomes and earning capacities of the parties with allowances for special circumstances which warrant deviation from the guidelines. The philosophy underlying the guidelines is that support should be income based. When the guidelines are applied to the incomes of the parties, the result should determine the reasonable needs of the dependent spouse and the ability to pay of the supporting spouse.
Under Pennsylvania law, the amount of support to be awarded is determined under Rules 1910.11 and 1910.12, which provide the procedure to follow in ascertaining the guideline amount. Pa. R.C.P. 1910.16-1. The formulas set forth in the Pennsylvania Rules of Civil Procedure, Pa. R.C.P. 1910.16-4, are set forth in the attached box.
Deviations from guideline support are allowed when the trier of fact specifies in writing the guideline amount of support and the reasons for and findings to justify the amount of the deviation. Pa. R.C.P. 1910.16-5. The guidelines direct the trial court to calculate spousal support according to the formula in Rule 1910.16-4 and to deviate from the result if any of the factors provided in Rule 1910.16-5 apply. Mascaro v. Mascaro, 803 A.2d 1186, 1191 (Pa. 2002).
In Mascaro, the Pennsylvania Supreme Court noted that determining spousal support on the parties' net incomes and obligor's other support obligations "treats similarly situated persons similarly, which is the goal expressed in Section 4322 of the Divorce Code." The Court also notes that allowing for deviations prevents the "goal of uniformity from leading to an unnecessarily harsh result where findings of fact justify the amount of the deviation." Id. at 1193.
Pennsylvania emphasizes parties' net incomes, not their standard of living, which avoids an inquiry into the parties' frugalness or extravagance. Id. The court points out that while the reasonable needs of a child are a consideration in child support, the reasonable needs of a spouse are not a proper consideration when calculating spousal support. Id. at 1195. Therefore, the spousal support guidelines are valid even in high income cases. Id. at 1193.
Arkansas also provides for a temporary spousal support in its Administrative Order on Arkansas Child Support Guidelines, In Re: Administrative Order Number 10: Arkansas Child Support Guidelines, Supreme Court of Arkansas, January 31, 2002, when it states:
Section III. Calculation of Support
e. Spousal Support
The chart assumes that the custodian of dependent children is employed and is not a dependent. For the purposes of calculating temporary support only, a dependent custodian may be awarded 20% of the net take-home pay for his or her support in addition to any child support awarded. For final hearings, the court should consider all relevant factors, including the chart, in determining the amount of any spousal support to be paid.
Similarly, New Mexico establishes temporary support by a Supreme Court rule which provides that each party has one-half of any remaining income after fixed expenses are paid. Virginia R. Dugan and Jon A. Feder, Alimony Guidelines: Do They Work?, 25 Family Advocate 4, 21 (2003).
Local guidelines in counties of several different states have been developed to promote uniformity of alimony awards.
In Santa Clara, California, a guideline for determining alimony was implemented in 1977. Even though it is not statutorily mandated, much of the State of California has adopted the use of the Santa Clara formula as a guideline for establishing alimony awards. Robert E. Gaston, Alimony: You are the Weakest Link!, 10-NOV Nev. Law. 36, 38 (2002). The total figure is only a starting point for alimony before any deviations are included to come up with a fair alimony award. Some factors which can be considered for deviation from the initial guideline amount include whether the payor is making additional payments for the children's benefit such as private school tuition, whether the payor is responsible for all or most of the marital debts or making payments which directly benefit the payee such as for education, training, leisure activities or trips with the children. Another consideration is whether the payor and payee are earning up to their potential.
The California formula also includes guidelines for the duration of alimony which are based on the length of the marriage. If the marriage lasts less than ten years, the alimony should be one-half the length of the months the parties were married. If the parties were married ten to twenty years, the duration of alimony should be not less than the number of months in the following formula: (months married/240) X (months married). All support orders should terminate after the number of months equal to the length of the marriage unless otherwise agreed.
The Kentucky Court of Appeals suggested a trial court use the maintenance formula in the attached box. That formula was developed by the late Ralph Petrilli, who was a professor at the University of Louisville Law School. A similar formula was also developed by a professor at the Ohio State University School of Law, Joan Krauskopf.
Some practitioners in Washtenaw County, Michigan, use a more sophisticated formula which assigns weighted percentage points to statutory elements including length of marriage, age of spouse claiming alimony, income of spouse claiming alimony, and the education and training of the spouse claiming alimony. The formula uses tables that correlate the factors into gross and weighted points which are totaled and compared to a five-level scale that an attorney uses to evaluate the strength of the alimony claim. The criticism of this formula is that it only considers four factors, which is insufficient to fairly evaluate an alimony claim.
The originator of the Washtenaw County Guidelines, Craig Ross, has developed computer software to determine alimony awards. His program has been endorsed by the Family Law Section of the State Bar of Michigan and Michigan's Alimony Guideline Committee. For more information, see http://www.marginsoft.com/alimony.
Maricopa County, Arizona, has developed guidelines based on the American Law Institute's recommendations for when the marriage has lasted longer than five years and the obligee's earning capacity is no more than 75% of the obligor's. This guideline formula does not differentiate between marriages with children and without children. The guideline amount is determined by multiplying the difference between the parties' post-dissolution incomes by a marital "duration" factor. The duration factor equals the number of years of marriage times .015, with a maximum value of .5. Ira Mark Ellman, The Maturing Law of Divorce Finances: Toward Rules and Guidelines, 33 Fam. L.Q. 801, 812 (1999).
Johnson County, Kansas, has developed its own guidelines regarding maintenance based on the number of years of the marriage and the difference in earning capacity of the spouses. Johnson County Bar Association, Family Law Bench Bar Committee, Family Law Guidelines for Family Law Practice in Johnson County, Kansas, Revised February 2001.
Section 5.6 of the Johnson County Family Law Guidelines deals with the amount of maintenance with no minor children. According to that formula, the maintenance should be determined by calculating 25% of the difference between the gross incomes of the parties up to a difference of $50,000 per year. For a difference over $50,000, add 22% of the excess. Id. at 5.6. When there are minor children, section 5.7 states that the maintenance should be determined by calculating 20% of the difference between gross incomes of the parties. Id. at 5.7. The Johnson County Guidelines address maintenance duration in section 5.8. According to that section, alimony should not last longer than: the number of years of marriage divided by 2.5 if the marriage is five years or less; 2 plus 1/3 of the number of years of marriage for marriages over five years.
For those who believe alimony cannot be income driven because there are too many other factors to consider, a middle ground can be reached where an income formula can be used as a starting point, but other factors should be weighted and incorporated into the calculation. For example, the length of the marriage would be given a weighted number more weight for longer duration. Standard of living would also be given more weight in a more enduring marriage. Contributions to the marriage should not be measured. Instead, the courts should look at how the requesting party's ability to earn has been negatively impacted by the marriage through child rearing, caring for elderly parents, or relocating for the sake of the opposing party's career advancement. This negative impact should be a weighted factor which is incorporated into the guideline. The other statutory factors would be similarly weighted.
Once all factors are weighted, they would be integrated into a formula similar to the Michigan calculation. This procedure would ensure that the trial court takes into account all the factors contemplated in the statute, and that the factors would be given a more uniform application. Rather than creating a strict system where the statutory factors are shunned in favor of an income approach, the opposite would occur. Parties would have a more consistent application of the statutory factors by both the trial and appellate courts. Fewer appellate cases would be sent back for findings of fact.
There is valid criticism of an alimony guideline approach. There is also valid criticism of the current decision-making process. Perhaps an improvement to the current approach is possible which may provide needed consistency to promote truly just compensation. It may also promote settlement in cases where mounting attorney fees often prevent fair settlements and cause a harmful diminution to the marital estate. This article is based upon a larger article discussing alimony trends in Florida, published in the October 2003 issue of the Florida Bar Journal.
Still another set of spousal support guidelines comes from Fairfax County, Virginia, the central portion of the Virginia suburbs of Washington, D.C. Those guidelines are considered as one relevant factor in determining temporary spousal support. They are clearly not presumptive in setting temporary support, and they are not a factor at all in setting permanent support.
Where the parties have no children, the Fairfax guideline amount is 30% of the income of the payor, minus 50% of the income of the payee. Where the parties have children, the Fairfax guideline amount is 28% of the income of the payor, minus 58% of the income of the payee. The guidelines themselves note the guideline amount is less reasonable as gross income rises over $10,000 per month, so that they must be used with caution in high-income cases.
The guidelines do not have the force of law or regulation; they were adopted by a committee of local attorneys and judges. In Fairfax County, they have been used reliably since 1981, although the formula was tweaked in 1988, 1991, and 1997. They are therefore among the more established sets of guidelines in force in the country.
Outside of Fairfax County, the guidelines have attracted considerable interest. Similar committees of attorneys and judges have adopted one-factor temporary support guidelines based upon the Fairfax model in the Harrisonburg and Williamsburg areas. Just as this article went to press, three judicial districts in the Richmond area adopted similar one-factor temporary support guidelines, effective January 1, 2004. All of the Virginia guidelines are based in large part upon the Fairfax model, although modifications have been made for local conditions. For example, the committee drafting the Richmond guidelines conducted a significant survey of local awards, and found that where the parties had no children, a subtraction of 30% of the payee's income (rather than 50%) was more consistent with local practice. In Virginia districts which do not have guidelines, individual judges will still consider the Fairfax guideline amount as one factor in setting support. This informal use of the Fairfax guidelines in other areas is good evidence of the strength of interest in spousal support guidelines generally.
Conversely, a cautionary experience is offered by the Roanoke temporary support guidelines. Those guidelines were drafted by the local bar association, with the approval and encouragement of some members of the local bench. They were used initially by judges who supported them, but other judges preferred not to use them. When the strongest supporters of the guidelines left the bench, they were replaced by other judges who were less supportive. As a result, usage of the guidelines has declined significantly. The lesson is that when guidelines are purely voluntary, and lack the force of even a local rule, their practical effect may decay over time. The likelihood of decay is probably greater where local judges are less supportive of the guideline concept and less involved in the actual drafting process.
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