Divorce Research Center Search
SearchManage AccountSign Off

THE EFFECT OF ARTIFICIALLY HIGH AND LOW MARITAL STANDARDS OF LIVING ON SPOUSAL SUPPORT AWARDS
1997 National Legal Research Group, Inc.

I. INTRODUCTION

It is a basic axiom of spousal support law that the dependent spouse is entitled to live after the divorce at the same standard of living he or she enjoyed during the marriage. This rule may not apply at all if the marriage is extremely short, and all spouses must make reasonable efforts to maximize their own earning capacity. Where the marriage is of reasonable duration and the earning capacities of the parties are significantly disparate, however, the general rule is that the dependent spouse should receive sufficient support to cover the difference between his or her earning capacity and the income needed to maintain the marital standard of living.

The general rule on the marital standard of living is subject to a number of exceptions. Indeed, the general rule is more of an ideal than a reality. A California court noted:

In re Smith, 225 Cal. App. 3d 469, 274 Cal. Rptr. 911, 922 (1990). Thus, the court questioned whether it is possible for both spouses to live after the divorce at the marital standard of living. Given that two persons cannot live separately as inexpensively as they can live together, a more accurate statement of the general rule might be that both spouses should live as close as reasonably possible to the marital standard of living, and that any inevitable shortfall should be shared by both spouses equally.

Further, even under the modified general rule, there are two types of cases where the marital standard of living is still not a good measure of support needs. First, in some cases the parties lived during the marriage at a standard of living higher than they could reasonably afford. The difference between income and expenditures in these cases was covered by an accumulation of debt. Such borrowing can only postpone the day of reckoning, and by the time of divorce the bills have generally come due. If the marital standard of living were used as the measure of support in these cases, the court would be forcing the parties to remain in debt forever.

Second, in some cases the parties lived during the marriage at a standard of living lower than they could reasonably afford. If support in these cases were set according to the actual marital living standard, the dependent spouse would be forced to remain at the lower level indefinitely. The wealthier spouse, by contrast, could raise his or her living standard at will. The unfairness posed by this fact pattern is especially acute when the lower standard of living was accepted as a temporary sacrifice for a long-term payoff, and the parties are divorced before the payoff is received. The most common case meeting this fact pattern is the situation where the parties are divorced shortly after one of them graduates from college or from a professional school.

While these two types of cases are at opposite ends of the spectrum, the remedies for the problems they pose are remarkably similar. In both types of cases, the law holds that spousal support should be based upon an objectively reasonable living standard for the income the parties actually earned during marriage, and not upon the living standard the parties actually enjoyed during the marriage.

II. ARTIFICIALLY HIGH STANDARD OF LIVING

The most common of the two groups of cases is the first group, the cases in which the parties lived at an artificially high standard of living. In today's credit-based economy, it is unfortunately all too common that a high lifestyle is based upon a foundation of debt. If the court required that the supporting spouse continue to finance such a high level of living after the marriage, it would condemn the supporting spouse to perpetual debt and eventual bankruptcy, while the dependent spouse would enjoy all of the benefits and none of the detriments of the unreasonably high living standard.

A good demonstration of this point is Campbell v. Campbell, 120 Idaho 394, 816 P.2d 350 (Ct. App. 1991). In that case, the appellate court reversed an award of support which was based upon the actual marital standard of living:

816 P.2d at 360 (court's emphasis) (citations omitted). Significantly, the court held that the marital lifestyle was excessive not only because the parties incurred debt but also because they consumed assets. This holding does not mean that assets can never be considered, and the court instructed the trial court on remand to consider "resources" as well as "incomes." Id. Still, Campbell clearly holds that a court should not automatically assume that a lifestyle built upon the consumption of assets must continue indefinitely after the divorce.

Likewise, in Kohut v. Kohut, 164 Vt. 40, 663 A.2d 942, 944 (1995), the court held:

[U]nder the peculiar facts of this case, the parties' actual marital standard of living has reduced significance as a point of reference for determining Pat's reasonable needs and support, due to the fact that during the marriage Bill worked excessive hours and the parties lived beyond their means. A more appropriate measure of Pat's post-separation needs is what would have been a reasonable standard of living for the parties given what Bill would have earned had he worked at a reasonably human pace.

The court noted that it did not mean to suggest that the supporting spouse would never be forced to work overtime. Instead, the decision of whether to force overtime work is to be made by the trial court after considering all of the facts of the case. Where all other factors are equal, one would expect that the argument for forcing overtime would be weaker as the amount of overtime involved gets larger. By noting that the husband did not work at a "reasonably human pace," 274 Cal. Rptr. at 925, the Smithcourt strongly suggested that the amount of overtime was enormous and that it was not reasonable to expect the husband to maintain that level of overtime indefinitely.

For additional recent decisions holding that the court should look to a reasonable standard of living based upon income in cases where the actual standard of living was excessive, see In re Weinstein, 4 Cal. App. 4th 555, 5 Cal. Rptr. 2d 558, 563 (1991) ("Contrary to appellant's suggestion, the court was not required to maintain an over-extended lifestyle based heavily on borrowing"); Thilem v. Thilem, 662 So. 2d 1314 (Fla. Dist. Ct. App. 1995); Marsh v. Marsh, 553 So. 2d 366 (Fla. Dist. Ct. App. 1989); Baldwin v. Baldwin, 905 S.W.2d 521, 525 (Mo. Ct. App. 1995) ("[A]n excessive standard of living does not equate to reasonable needs under the statute"); and Newman v. Newman, 717 S.W.2d 568, 570 (Mo. Ct. App. 1986) ("Since wife's marital standard of living was achieved, in part, through thriftlessness, its weight in determining appropriate maintenance is diminished").

III. ARTIFICIALLY LOW STANDARD OF LIVING

The second group of cases in which the marital standard of living is not a good measure of support needs includes those cases where the marital standard of living was artificially low. In In re Smith, 225 Cal. App. 3d 469, 274 Cal. Rptr. 911 (1990), the court identified some of the situations which meet this fact pattern:

274 Cal. Rptr. at 922 (citation omitted).

This article will break down the reported cases involving artificially low living standards into two groups. In the first group of cases, the marital standard of living is temporarily low because the parties are sacrificing to increase future earnings. In the second group of cases, the parties have chosen to live frugally. The difference is that in the first class of cases the low living standard is a means to an end, while in the second class of cases the low living standard is an end in itself. In both types of cases, the courts set support with reference to a reasonable living standard, disregarding the reduced standard enjoyed during the marriage.

A. Low Standard of Living as a Sacrifice

The most common fact situation involving an artificially low marital standard of living is the student marriage. In these cases, one spouse spends substantial time out of the workplace attending college or professional school, while the parties live on the other spouse's income. The parties' standard of living is depressed because they must support two persons on one person's income. The parties tolerate the situation, however, because they know that the student spouse's earnings will rise dramatically in the future, permitting a standard of living greatly beyond what they would have enjoyed if the student spouse had not attended school.

When a marriage of this sort breaks down before the expected increased earnings have been realized, great unfairness can result. If support were limited to the actual marital standard of living, the working spouse would receive no share of the future earnings he or she sacrificed for years to attain. The student spouse, by contrast, would obtain a substantial increase in future earning capacity at little or no cost.

The most frequently discussed remedy for this fact situation is to treat the student spouse's degree or license as marital property. However popular this remedy may have been among authors of law review articles, it has been solidly rejected by almost all courts. See generally Brett R. Turner, Equitable Distribution of Property 6.20 (2d ed. 1994 & Supp. 1996).

The most commonly applied remedy for this fact situation is an award of alimony. Alimony is a logical compensation method for use in these cases, as the essential core of the case is the fact that one spouse has sacrificed to increase the other spouse's earning capacity. Contributions to future earnings are a questionable basis for a property division award, but they are a highly appropriate basis for an award of spousal support.

The primary obstacle to an alimony remedy is the relatively modest marital standard of living. To avoid this obstacle, courts have held that the dependent spouse's reasonable financial needs need not necessarily be limited to the actual marital standard of living.

For example, in In re Olar, 747 P.2d 676 (Colo. 1987), the parties were married after high school. The wife then supported the husband while he obtained a Ph.D. in Physiology. On the eve of his final graduation, the parties separated. The trial court refused to award either a property division or an alimony remedy, and the wife appealed. The court began by reaffirming its holding in Graham v. Graham, 194 Colo. 429, 574 P.2d 75 (1978), that the degree was not marital property. On the alimony question, however, the trial court's decision was reversed:

747 P.2d at 681. With regard to the "reasonable needs" prong, the court held:

Id. (footnote omitted). With regard to the "appropriate employment" prong, the court held:

Id. The court elaborated:

Id. at 681-82. Thus, the court held that in determining the wife's need and employability the court must consider not only her strict financial situation, but also her reasonable expectations based upon the conduct of the parties during the marriage. The case was remanded back to the trial court with instruction to reconsider the alimony issue under the more liberal definitions of need and employability established by the appellate decision.

Another decision along the same lines is Haugan v. Haugan, 117 Wis. 2d 200, 343 N.W.2d 796 (1984). The parties in Haugan were married just before the husband entered medical school. They remained married through medical school, internship, and residency, and separated only two months before the husband's residency was due to end. The trial court refused to award alimony, and again the appellate court reversed. The court's underlying policy concern was to compensate the wife for her contributions:

343 N.W.2d at 800. The rationale for the trial court's denial of alimony was that the wife lacked financial need. The appellate court disagreed:

Id. at 804 (citations omitted). To guide the trial court on remand, the court listed three possible methods which might be used to compute the amount of maintenance. The trial court could value the wife's contributions and grant an award of approximately equal value as reimbursement; grant the wife an equitable share of the husband's future earnings as a return on her investment; or grant the wife "half of the student spouse's enhanced yearly earning power for as many years as the supporting spouse worked to support the student." Id. at 803. The appellate court declined to choose among these possibilities, leaving the issue for the trial court's discretion. A dissenting opinion agreed that compensation was permissible, but would have rejected any calculation method based upon a return on investment.

The court had more difficulty in resolving the same issue in Hodge v. Hodge, 513 Pa. 264, 520 A.2d 15 (1986). The parties in Hodge were married while the husband was a student in a medical technology program a type of medical education which apparently precedes medical school. The husband was apparently in some form of United States Army program, and after his graduation the wife accompanied him on military assignment to Texas. After his discharge from the Army, the husband attended medical school and served his internship and residency. The parties separated immediately after residency was completed. The wife was 46 years old at the time of divorce. The trial court awarded the wife $100 per week alimony for 14 years, and the husband appealed.

The Pennsylvania Supreme Court affirmed the alimony award by an equally divided court. The reported version of the case is difficult to read, as the opinion in favor of reversing the alimony award appears first. Nevertheless, the closing paragraph of that opinion states quite clearly that the alimony award is affirmed, making the second opinion to appear in the report the controlling opinion in the case. The issue upon which the court split was the construction of a statute similar to the statute in Olar, which on its face seemed to make financial need a prerequisite for alimony. The opinion in favor of reversal construed financial need strictly, along the same lines as the trial court in Olar. The controlling opinion not only construed need more liberally but refused to treat need as a prerequisite:

520 A.2d at 22.

A Utah decision contains dicta supporting the same result:

Martinez v. Martinez, 818 P.2d 538, 542 (Utah 1991) (citation omitted).

Beyond the low marital standard of living in most student marriages, another problem with using an alimony award to compensate the dependent spouse for contributions to career development is that alimony ceases upon remarriage. It is fundamentally unfair to deprive the dependent spouse of compensation for past career contributions merely because he or she opts to remarry. For this reason, some states have created a separate remedy known as reimbursement alimony. Reimbursement alimony works much like traditional alimony, but it compensates only for career contributions, and it does not stop upon remarriage. For a general discussion of reimbursement alimony, see Turner, supra, 6.20.

B. Low Standard of Living as a Voluntary Choice

In the second class of cases involving a low standard of living, the parties do not accept a low living standard as a sacrifice. Instead, they live frugally out of choice, sometimes accumulating a large marital estate. If spousal support in these types of cases were limited to the actual marital standard of living, the dependent spouse would be forced to live frugally forever, while the supporting spouse would retain the option to stop living frugally at any point. In addition to being unfair to the dependent spouse, this result would substantially discourage frugal living. To avoid these problems, courts often hold that where the marital standard of living was unusually low, support should be based upon an objectively reasonable standard of living for the actual incomes involved.

An excellent example of this point is Edelstein v. Edelstein, 399 Pa. Super. 536, 582 A.2d 1074 (1990). In that case, the husband claimed that the wife's spousal support should have been based upon the marital standard of living, which was less than what the parties' incomes could have afforded. The court disagreed:

582 A.2d at 1077.

The same issue arose in Wikel v. Wikel, 168 Wis. 2d 278, 483 N.W.2d 292 (Ct. App. 1992). There, the court awarded the wife $2,000 per month in alimony. The husband appealed, arguing that the award was excessive in light of the actual marital standard of living. The court rejected the husband's argument:

483 N.W.2d at 294 (citation omitted). The trial court's support award was therefore affirmed.

A similar holding was made in Johnson v. Johnson, 38 Mass. App. Ct. 531, 649 N.E.2d 799, 803 (1995):

See also Huger v. Huger, 16 Va. App. 785, 433 S.E.2d 255, 259 (1993) (summarily upholding an award which allowed the wife to live at a level in excess of the "conservative" marital lifestyle).

The court is particularly likely to reject an artificially low prior living standard where the supporting spouse is no longer living at that standard. In this situation, the disparity in postdivorce living standards is actual rather than merely theoretical, and to limit support to the marital standard of living would be to perpetuate the inequality forever. An Illinois court held:

In re O'Brien, 235 Ill. App. 3d 520, 601 N.E.2d 1227, 1330 (1992).

IV. CONCLUSION

Courts frequently hold that the reasonable needs of the parties must be measured for support purposes at the marital standard of living. In practice, however, there are two groups of cases in which courts regularly deviate from the marital living standard. Where the marital standard of living was either beyond the parties' means or less than what they could reasonably have afforded, courts do not judge reasonable needs by actual past experience. Instead, they judge reasonable needs using a standard of living which is objectively proportional to the incomes of the parties during the marriage. The only minor exception is the professional degree cases, but even in those cases the court still looks to an objectively reasonable living standard. The only difference is that the standard is based upon the earning capacity acquired during the marriage, rather than upon actual past earnings.

The tendency of courts to define the marital standard of living objectively suggests that the marital standard of living is a less important factor in determining alimony than many courts have realized. In practice, courts rely upon the marital standard of living only when the marital standard of living is reasonably proportional to the parties' incomes. When the marital standard of living is either high or low in relation to the parties' actual incomes, the courts look to the lifestyle at which the parties could reasonably have lived. The actual past incomes of the parties are therefore a more important factor in determining alimony than the actual standard at which the parties lived during the marriage.

Many individual judges applying a traditional approach to support awards still place great reliance on past expenses, and treat the cases discussed in this article as limited, fact-specific exceptions. Moreover, even where the judge looks primarily to past income, past expenses can still be a useful guide to determining an appropriate level of support for a given level of prior income. This is particularly so where the judge does not have broad experience in setting spousal support in different types of cases.

Nevertheless, the law of spousal support would be simpler and clearer if reliance upon actual past expenditures were minimized. Such reliance leads to inequitable spousal support awards in three different ways. First, it requires the dependent spouse to prove actual prior expenses in order to obtain a reasonable support award. This requirement poses problems of proof, as few married couples keep detailed records of past expenditures. Second, courts which rely upon actual past expenditures tend to focus unduly upon the amount or legitimacy of specific past expenditures. This focus distracts the court from the most important point: setting a spousal support award which is fair in light of the parties' respective incomes.

Finally, and most importantly, reliance upon actual expenditures tends to lead to unreasonably low support awards. All too often, courts applying a traditional approach to spousal support will closely scrutinize the dependent spouse's financial statement, disallowing expenses which seem frivolous or unnecessary. Such scrutiny becomes more common as the income of the parties rises, because wealthier parties spend more income on luxuries. The result of this scrutiny is to reduce the support award, giving more postdivorce income to the supporting spouse. But in the great majority of cases, the supporting spouse is spending income for purposes which are just as frivolous as the expenditures of the dependent spouse. The frivolous expenditures of the dependent spouse reduce the award, but the frivolous expenses of the supporting spouse do not increase the award. Thus, support awards based upon past expenses tend to give the supporting spouse a higher postdivorce standard of living than the dependent spouse. The fundamental cause for this inequality is the fact that only the dependent spouse's actual past living expenses are being scrutinized.

A better approach to spousal support would be to rely primarily upon actual past income and only secondarily upon actual past expenses. As the cases cited in this article demonstrate, there is already a substantial body of case law which adopts this approach where actual past expenses were disproportionate to income. The income approach and the income sharing model identified essentially apply the same reasoning to all alimony cases. Under these approaches, the goal of the spousal support process is to ensure that both parties have equitable postdivorce incomes and living standards. Equity does not necessarily mean equality, and there are many cases (especially those involving shorter marriages) where unequal postdivorce incomes and living standards are equitable. By focusing upon income, however, the court more directly addresses the real issue in the case. Reliance upon income is also more efficient, as the court can avoid time-consuming inquiries into how much money was spent during the marriage for various specific purposes. Finally, an income-based approach leads to fairer awards, as undue scrutiny is not given to the past expenditures of either spouse.

The growing trend toward an income-based rather than an expense-based theory of spousal support also has important consequences in regard to the method by which spousal support is computed. As states have come to recognize the overall positive effect of child support guidelines, there has been an increasing willingness to experiment with similar guidelines for a determination of spousal support. One argument sometimes made against such guidelines is that spousal support depends on the facts of the case to a much greater extent than child support. The result of the article is to question that argument. In setting spousal support awards, courts sometimes appear to be relying on the parties' history of financial expenditures, a history which is different in every case. In reality, however, the court departs from past expenditures whenever they are out of proportion to past earnings. In the great majority of spousal support cases, it is possible to make a reasonable prediction of the ultimate outcome from only three pieces of evidence: the income of the husband, the income of the wife, and the length of the marriage. The predictability of the ultimate award suggests strongly that spousal support guidelines could have a positive effect similar to the effect of child support guidelines.

Go to: Alimony Category
Go to: Cases of Interest by Category
Go to: Previous Page



About Us | Monthly Newsletter | Terms & Conditions | Privacy Statement | Contact Us | Advertising

The information contained on this page is not to be considered legal advice. A lawyer should always be consulted in regards to any legal matters. Divorce Source, Inc. is also not a referral service and does not endorse or recommend any third party individuals, companies, and/or services. Divorce Source, Inc. has made no judgment as to the qualifications, expertise or credentials of any participating professionals. Read our Terms & Conditions.

© 1996 - 2012 Divorce Source, Inc. All Rights Reserved.