Maintenance Modifications: Protecting Yourself as the Payor Spouse
In New York, maintenance is money that one spouse (the payor) is ordered to pay to the other spouse (payee) for his or her financial support during and/or after a divorce. Maintenance is calculated according to a formula, which takes into account the income of both parties. With a divorce, maintenance obligations can result from a written agreement created by the parties that then becomes “incorporated but not merged” into the divorce judgment. This means that the parties’ written agreement still exists as an enforceable contract, and any violations or modifications can be addressed either by contract law or by the court as part of the divorce judgment. Alternatively, when the parties cannot agree, maintenance can be imposed upon the parties by a judge after a trial. The difference in how maintenance is awarded (either by agreement or by a judge) in any given case is important because it affects a payor spouse’s ability to seek modification or termination of a maintenance obligation if their financial circumstances change down the road. If you are obligated to pay support, and have experienced a job loss or other financial hardship, you should consult family law attorneys Fass & Greenberg, LLP to discuss your chances of obtaining a modification of your support obligations.
According to Domestic Relations Law Section 236(B)(9)(b)(1), there are two different standards for modification of a maintenance obligation based upon how the maintenance was awarded. If maintenance was awarded as part of a written agreement between the parties, the standard for modification or termination of maintenance is a showing of extreme hardship. This is the higher of the two standards and is an extremely difficult standard to meet. In Marrano v. Marrano, 23 A.D.3d 1104 (App. Div. 4th Dept. 2005), the court reduced the former husband’s maintenance obligation of $40,000 per year based on a showing of extreme hardship, where the husband’s business earnings decreased significantly, from approximately $174,000 to $18,000 over a five-year period. However, in V.P. v. C.P., 32 Misc. 3d 1230(A) (Sup. Ct. 2011) emphasized that extreme hardship “calls for a substantial dislocation of financial circumstances so that the litigant is nearly without resources or shelter,” and rejected the former husband’s request for modification despite an increase in his medical expenses and a decrease in his income since the time the agreement was made.
For maintenance awarded as part of a court’s judgment after trial, the standard for modification is a “showing of either the payee’s inability to be self-supporting or upon a showing of a substantial change in circumstance, including financial hardship or upon actual full or partial retirement of the payor if the retirement results in a substantial change in financial circumstances.” What constitutes a substantial change in circumstances is determined on a case-by-case basis, and courts will compare the payor’s financial circumstances at the time of the motion for a downward modification and at the time of the divorce. In Simmons v. Simmons, 11 Misc. 3d 1055(A) (Sup. Ct. 2004), the court decreased the former husband’s maintenance obligation based on his involuntary job loss due to downsizing, a subsequent significant decrease in his income (from $116,000 to $30,000), and the fact that he exhibited sufficient efforts to obtain employment. In Dinozzi v. Dinozzi, 49 Misc. 3d 1220(A) (Sup. Ct. 2015), the court terminated the former husband’s maintenance obligation based on a substantial change of circumstances, which was the fact that the marital home was sold and the maintenance award was based on the wife’s expenses related to the marital home. Conversely, in Taylor v. Taylor, 107 A.D.3d 785 (App. Div. 2nd Dept. 2013), the Court held that the defendant failed to establish that his disability and retirement constituted substantial changes in circumstances, where the evidence showed he received a substantial lump sum pension payment upon his retirement making him capable of meeting his maintenance obligation. The simple fact of retiring is not enough to obtain a downward modification. You should consult with family law attorneys Fass & Greenberg, LLP to determine whether your retirement results in a substantial change in your finances.
Meeting these standards to obtain a downward modification is not easy. The fact of job loss or retirement may not be sufficient on its own, especially if your change of circumstances appears to be voluntary. The question becomes how can you protect yourself against as a payor spouse against an unforeseen change of circumstances when negotiating a written divorce agreement?
Even though divorce written divorce agreements are held to the higher standard of “extreme hardship,” they also provide the ability to deliberately contract around that standard. In Glass v. Glass, 16 A.D.3d 120 (App. Div. 1st Dept. 2005), the Appellate Court held that, where a judgment of divorce incorporates but does not merge a written agreement between the parties, “the parties to such agreement may contractually provide for a support modification on a lesser standard than legally required.” If the written agreement provides for a lower standard than extreme hardship to seek maintenance modification, the court will look to the standard outlined in that agreement. Therefore, it is crucial to hire an experienced family law attorney to help you protect yourself in a written agreement regarding maintenance obligations. Our lives can change course unexpectedly, and the prospect of having to pay maintenance in the face of job loss or serious financial problems can be daunting. By taking the initial step of clearly outlining maintenance provisions in a divorce agreement, you can protect yourself and your finances, and the divorce attorneys at Fass & Greenberg can help you obtain the best possible outcome.
