Co-written by: Erin Harris
(Article originally published in Women’s Business, March 2010)
With competing bills pending before the House and Senate, alimony reform may be on the horizon in Massachusetts. For decades, alimony laws in the Commonwealth have remained unchanged, with lifetime alimony awards being favored and high standards for modification of an existing award. Both bills share the goal of bringing Massachusetts more in line with the national trend towards durational or rehabilitative awards, as is common in neighboring New Hampshire and Maine.
In states such as New Hampshire where alimony is considered rehabilitative, courts look at many factors in deciding on the amount and duration of alimony. One such factor may be whether the recipient is in need of income supplementation to allow him or her to obtain additional education or training to return to the workforce after a delay caused by homemaking and childrearing. Other factors include the age of the recipient, the duration of the marriage and the length of time one might reasonably require to secure full time employment.
In states like Maine where a more durational approach is utilized, the length of an alimony award is often tied specifically to the duration of the marriage. For example, alimony may be capped at no longer than half the years of the marriage.
Any alimony reform that does come to pass will impact women living in Massachusetts, and in more ways than one might think. Women today are no longer just the recipients of alimony; they are also with increasing frequency ordered to pay alimony or find themselves the second wives of men paying alimony to former spouses. The financial implications to the families of the recipients and the obligors can be equally significant.
The Massachusetts Supreme Judicial Court’s (“SJC”) recent decision in the matter of Pierce v. Pierce highlights the competing interests of the first and second wives of alimony payors as well as the potential consequences of lifetime alimony awards. Mr. Pierce, a prominent lawyer, agreed in his divorce settlement to pay Mrs. Pierce alimony of $110,000.00 per year. Several years later, at the age of 65, Mr. Pierce retired from his position as a partner at a law firm and took an “of counsel” position with a reduced workload and salary. Mr. Pierce filed a complaint for modification seeking to eliminate his alimony obligation based upon this significant change in his financial circumstances.
At the time the request was filed with the court, Mrs. Pierce was gainfully employed and earning a salary of $95,000.00 per year. Subsequently, she made the decision to resign from her position because it had been restructured to include additional travel and responsibilities without additional compensation. Mrs. Pierce indicated to the court that she felt she was unable to work at that increased pace due to her age and physical condition. By the time of the hearing Mr. Pierce, who was two years older than his former wife, had completely retired from the practice of law. Although Mrs. Pierce was not yet eligible for social security benefits, the court noted that she had assets in excess of one million dollars which she could use to meet her needs, including nearly $600,000.00 in liquid assets.
The judge reduced Mr. Pierce’s alimony obligation to $42,000.00 per year, finding that the first Mrs. Pierce had an ongoing need for support and Mr. Pierce still some ability to pay despite his retirement. In evaluating Mr. Pierce’s ability to pay, the court also considered the $125,000.00 per year salary of Mr. Pierce’s current wife and her ability to pay many of the family’s expenses thus freeing up some of Mr. Pierce’s retirement income which could be used to pay his former wife. The SJC rejected Mr. Pierce’s request that it create a rebuttable presumption that alimony should terminate at the traditional voluntary retirement age of 65 and held that the trial judge’s decision was consistent with the current Massachusetts alimony laws.
This decision prompted serious discussion about whether the legislature should step in to reform the alimony laws of Massachusetts in order to strike an effective balance among the competing interests of alimony payors, alimony recipients and the subsequent spouses of alimony payors.
The House and Senate bills remain pending before the Joint Committee on the Judiciary with numerous advocacy groups taking positions on the legislation. The House Bill, H1785, would substantially reform current alimony laws and provide more of a mathematical approach to awards. For instance, the duration of awards would be limited to half the length of the marriage, capped at 12 years, and would automatically terminate at the age of 65. In addition, awards of alimony for longer than 5 years would be reduced at a rate of 10% per year after 5 years. The law would also prohibit the court as was done in the Pierce case from considering the income and assets of the obligor’s current spouse in determining modifications of alimony.
The Senate Bill, S1616, is a less drastic reform bill which is supported by the Women’s Bar Association of Massachusetts and other groups which tend to focus on issues of concern to women. It would allow for durational alimony for a short or fixed term with the goal of making alimony more rehabilitational in nature but without the strict mathematical limits imposed under H1785, allowing the trial court more discretion to look at the circumstances of the parties.
Whatever the outcome, the issue of alimony appears to be receiving some significant and what some might consider overdue scrutiny in Massachusetts. Those with interest in the issue can check the status of the bills at www.mass.gov/legis.
Charla Bizios Stevens is a Director and Shareholder in the Domestic Relations and Employment Law Practice Groups and Erin Harris is an Associate in the Litigation Department at the law firm of McLane, Graf, Raulerson & Middleton, P.A. Charla can be reached at 603-628-1363 or [email protected]. Erin can be reached at 603-628-1323 or [email protected]. The McLane Law Firm has offices in Concord, Manchester and Portsmouth, New Hampshire and Woburn, Massachusetts.