Alimony, Need, and Imputing Income after Retirement

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A fascinating case came out from the Utah Court of Appeals in March of 2020 on the issues of alimony and when to value a retirement account for division after a divorce trial. In the case of Petrzelka v. Goodwin, 2020 UT App 34, the husband was seeking alimony from the wife. The parties separated after 11 years of marriage, but the trial did not occur until three years after separation. The parties were married somewhat later in life, wife at forty-two and husband at sixty-one. During the marriage the parties kept their finances separate, but did share in some very limited joint expenses. Husband made a claim for alimony against the wife which was denied, determining that husband was able to meet his needs through a combination of his Social Security and retirement income. Husband had retired eight years into the marriage, and three years prior to separation. Interestingly, although husband had been retired for three years prior to separation and about six years prior to the trial, the court imputed to him regular wages of $15 per hour for twenty hours per week. This imputation of income was key in denying the alimony claim because, without the imputation, husband’s Social Security and retirement income would not be sufficient to meet his alleged financial need. Husband alleged his income was around $1,300 short of his monthly financial need of $3,571.

Courts in divorce cases may impute income to an unemployed, even a retired spouse, in assessing that spouse’s ability to produce income. “A spouse who is capable of working out to be accountable for meeting his or her own needs to the extent of that capability.”   

By imputing income of $1,300 to husband, the court found that husband had the ability to meet his needs. The imputation determination was based on husband’s very marketable and extensive job skills acquired during his life, and that nothing limits him from doing some sort of work. Husband remained active in his retirement, and he was able to travel, walk, and hike with dogs, etc. Husband would also receive a considerable sum from wife’s retirement account, which he did not contribute to or cause in any way to increase. The court noted that “such funds can be used for his support and for the payment of his debts.” The court accepted that there is no right to retire, no legal right to quit supporting oneself in a divorce situation. It is interesting that the court decided to impute $15 per hour of income to husband, apparently without expert testimony on which to base that amount. Normally, a ruling like that in a divorce case needs to be based on actual evidence put on by one of the parties at trial. The best way to present evidence of income is through a vocational expert. It appears from the opinion that the court did not have a vocational expert to rely on, but chose the $15 figure without much evidence.

Based on these and other circumstances, the court found it appropriate not to award husband any alimony. Keep in mind that the court emphasized that this result was based on these particular circumstances, and that the analysis may vary on any other case depending upon the facts of that case. In divorce cases, the trial judge has broad discretion to make decisions regarding alimony, so it is important for both the party and the attorney to come across to the trial judge as likeable, sympathetic, trustworthy, and reasonable as possible to avoid having any negative perceptions the judge may have against a party play any part in the decision at all.

If you have a question or a case involving alimony and how imputation of income in the alimony analysis works, give us a call. Our consultations are free, and if you hire us to represent you, we have the knowledge, experience, and courtroom skill to get you the best result possible.

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