For divorcing couples, alimony is often a highly contentious issue. In the most common situation where alimony is at stake, one of the couples is a high earner, and the other is a relatively low earner.
Upon divorce, the higher earner believes that since the marriage is over, he should no longer be required to financially support the other spouse.
At the same time, the spouse making a claim for alimony believes that her years of sacrifice and contributions to the marriage warrant compensation and support even after the marriage is over.
Utah law allows for alimony to be awarded, and in most cases, an alimony settlement will be reached that both parties agree is fair in both the amount and the duration. If the case goes to trial, the judge will apply the alimony statute Utah Code 30-3-5(8)-(10) and a number of appellate cases to determine whether alimony should be awarded, how much should be awarded, and how long the alimony should be paid.
Although there is some disagreement among the courts and practitioners, a spouse seeking alimony must first be able to establish a financial need for alimony before it can be awarded. This showing is usually made by producing a financial declaration and the supporting documents that show that the spouse making a claim for alimony has reasonable expenses that exceed the spouse’s capacity to financially support herself.
Although alimony may be awarded or agreed upon in the original divorce, it is not permanently unmodifiable.
The court has continuing jurisdiction to modify alimony awards if the financial situation of one or both parties changes substantially and materially after the original divorce decree is entered, and that change was not foreseen at the time the decree was entered.
A recent case sheds some light on this predicament. Earhart v. Earhart, 2015 UT App 308.
In Earhart, the payor spouse, which happened to be the husband, filed a Petition to Modify alimony because he had suffered a reduction in his income. The original alimony amount was set at $4,000 per month, and was set to last for five years. Husband was also required to pay child support in the amount of $3,200 per month, along with other financial obligations owed to wife, all of which amounted to $15,000 per month.
Husband’s income went from $22,000 per month at the time of the divorce to $15,000 per month at the time he filed his Petition to Modify. Husband claimed that the reason his income went down was because the business he owned required him to focus more on client development and marketing the business more than billing clients, which reduced his earning capacity for the longer-term well-being of the business he owned with his father.
Not surprisingly, the wife saw this reduction in incomes as “voluntary,” and possibly even a scheme for husband to reduce his alimony obligation, as a court can lower alimony with a lowering of income, if that lowering in income was substantial, material, and unforeseen at the time of the original divorce.
Wife believed that if she could prove that husband’s income reduction was “voluntary” on his part, he would not be awarded a reduction in alimony. The trial court, however, did not accept this argument and found in favor of reducing alimony from $4,000 per month to $3,000 per month. The child support amount was also reduced to $2,348 per month.
While it is true that, “voluntary impoverishment is not a ground for reduction of alimony,” the trial court concluded that husband’s reduction in income was not voluntary. While husband was “capable” of earning $22,000 per month, his business no longer had the clientele to support that level of earning, thus requiring him to spend more time growing the business, which resulted in less income for the husband.
Husband was required to spend more time acquiring new clients, which came with a lower income, as opposed to billing clients, which allowed him to earn a higher income.
While there was contrary evidence on the record which could have justified a different result, the trial court judge (Su Chon) was upheld, as her decision was not an abuse of discretion.
Wife also argued on appeal that the trial court should have considered her need for alimony only at the time of the divorce, and not at the time the Petition to Modify was filed. The court declined to decide this issue because it was not property preserved by her attorney for the appeal. However, the court did say that such an argument, “seems inconsistent with the very rationale of a court’s continuing jurisdiction in divorce cases.” Thus, even though the issue was not decided, it appears that if this issue ever comes up again, the appellate court is likely to evaluate the needs of the recipient spouse at the time of the Petition to Modify, as opposed to the needs as they were at the time of the divorce.
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