Provides for the duration and amount payable for temporary and post-divorce maintenance, and spousal support

Summary of provisions of bill

Section 1. Subdivision 5-a of Part B of section 236 of the Domestic Relations Law (DRL) as added by chapter 371 of the laws of 2010, is amended to clarify the calculation of the guideline amount of temporary maintenance awards and to revise the factors to be considered to adjust one guideline amount where the court finds the guideline amount is unjust or inappropriate. This section also reduces the income cap from $500,000 to $200,000.

Section 2. Subdivision 6 of part B of section 236 of the DRL, as amended by chapter 371 of the laws of 2010, is amended to provide, in determining post-divorce maintenance, provisions that track the provisions for determining temporary maintenance. This section also provides for the guidelines and duration of post-divorce maintenance.

Section 3. Subparagraph 1 of paragraph b of subdivision 9 of Part B of section 236 of the DRL, as amended by chapter 182 of the laws of 2010, is amended to provide that a court may annul or modify a prior order or judgment for maintenance upon a showing of a substantial change in circumstances, including remarriage of the payee if the remarriage results in a substantial change in financial circumstances, and actual retirement of the payor if the retirement results in substantial change in financial circumstances.

Section 4. Section 412 of the Family Court Act, as amended by chapter 231 of the laws of 1960, is amended to mirror the provisions of temporary maintenance set forth in subdivision 5-a of Part B of section 236 of the DRL.

Section 5. Paragraph a of subdivision 1 of part B of section 236 of the DRL, as amended by chapter 371 of the laws of 2010, is amended to replace "recipient" of maintenance to "payee."

Section 6. Subparagraph 7 of paragraph d of subdivision 5 of Part B of section 236 of the DRL, as amended by chapter 281 of the laws of 1980 and as renumbered by chapter 229 of the laws of 2009, is amended to provide that in determining an equitable disposition of property pursuant to subdivision 5(c) of Part B of section 236 of the DRL, the court shall not consider as marital property subject to distribution the value of a spouse's enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement. However, the court, in arriving at an equitable division of marital property, shall consider the direct or indirect contributions, to the

development during the marriage of the enhanced earning capacity of the other spouse.

Section 7. Section 248 of the DRL is amended to replace language referencing "husband" and "wife" to "spouse," "payor," and "payee."

Section 8. Effective Date.

Justification

This bill completes reforms of New York divorce laws that started in 2010 with the adoption of standards for temporary maintenance similar to the standards used for child support. The bill makes several changes to current law. First, it amends the provisions for temporary maintenance enacted in 2010 by lowering the provision's income cap and by making technical and clarifying amendments, including restating in simpler language the method for calculating the temporary maintenance guideline amount. Second, the bill adopts maintenance standards for post-divorce maintenance awards similar to those for temporary maintenance awards. Third, the bill provides increased guidance to courts hearing motions to modify maintenance awards by clarifying that a substantial change in circumstances includes financial hardship, remarriage of the payee if remarriage results in a substantial change in financial circumstances, and actual retirement of the payor if retirement results in a substantial change in financial circumstances. Fourth, the bill extends the concept of guidelines to the Family Court Act's provisions for spousal support. Fifth, within the context of comprehensive legislation providing for post-divorce maintenance guidelines, the bill eliminates increased earning capacity from consideration in the distribution of marital assets. And, sixth, the bill conforms other portions of the Domestic Relations Law to make them consistent with the bill's provisions for post-divorce maintenance.

In 2010, New York State adopted standards for temporary maintenance similar to the standards for child support in the Child Support Standards Act in use since 1989. This reform was a response to serious concerns about the ability of the State's then existing spousal maintenance provisions to produce equitable results. Spousal maintenance awards at the time were inconsistent and unpredictable, creating questions about the fairness of awards and discouraging settlements. Litigation to establish maintenance was lengthy and complex. For parties who could not afford protracted litigation, maintenance was an illusory remedy.

The 2010 reforms began the process of incorporating into provisions for spousal maintenance the concept of marriage as an economic Partnership, an idea that New York State adopted for equitable distribution in 1980. Divorce remedies that look to the economic Partnership premise base maintenance on the recognition that parties make different contributions to a marriage, that only some of those contributions are financial, and that some contributions. Particularly those of caring for children and a household, diminish post-divorce earning prospects.

As stated in the justification for the 2010 temporary maintenance legis- lation, a commission of the American Academy of Matrimonial Lawyers (AAML Commission) noted that various jurisdictions had adopted a formula approach to determining spousal support. The AAML Commission

recommended use of a formula based on two universal factors, the income of the parties and the length of the marriage. Additionally, the American Law Institute, in "Principles of the Law of Family Dissolution; Analysis and Recommendations" (2000) of the American Law Institute (ALI Principles) identified economic losses that spouses suffer at the end of marriage. These losses often take the form of lower earning capacity for spouses who are primary caretakers of children. The ALI Principles suggest that these losses be shared through a formula for determining post-marital spousal support that takes into account the incomes of the parties and the length of the marriage.

The 2010 temporary maintenance law provided not just consistency but flexibility through provisions allowing the court to adjust guideline amounts up or down when numbers produced by the formula were inappropriate or unjust. Also, the law provided a list of factors for the court to consider when making adjustments and required courts to provide written explanations for their justifications.

Attorneys representing low and middle income parties report that clients, who in spite of great need would have been unable to undertake the litigation necessary for a maintenance award under the vague provisions of the previous law, have been receiving temporary maintenance as a result of the law enacted in 2010. These awards are the result of judicial rulings under the new law and, equally importantly, of settlements informed by clear standards allowing lawyers to predict litigation outcomes. Courts have taken advantage of the provisions providing flexibility and have adjusted awards when necessary for equity in particular cases. Dozens of decisions have been published.

The 2010 law also directed the New York State Law Revision Commission (LRC) to, among other things "review the maintenance laws of the State, including the way in which they are administered to determine the impact of these laws on post marital economic disparities and the effectiveness of such laws and their administration in achieving the state's policy goals and objectives of ensure that the economic consequences or a divorce are fairly and equitably shared by the divorcing couple." (Sec. 3 of Chapter 371 of the Laws of 2010.)

The LRC issued its final report on May 15, 2013 of its findings, conclusions and recommendations (the LRC Report). The LRC Report, among other things, recommended that the mathematical formula set forth in the 2010 law for the calculation of the guideline amount of temporary maintenance be continued and that a mathematical formula be similarly used to calculate the guideline amount of post-divorce maintenance, with consideration by the court of a set of factors to determine whether the guideline amount of post-divorce maintenance should be increased where the parties' income exceeds the income cap. The LRC also recommended that the provisions providing for spousal support in Family Court proceedings be amended to mirror the temporary maintenance law, revised as recommended by the LRC.

This bill incorporates many of the recommendations set forth in the LRC Report.

Section one of this bill makes small adjustments that refine, clarify, and streamline the current temporary maintenance standards law. The provisions for calculating the formula amount have been simplified. Factors for judges to consider when adjusting awards have been condensed and clarified, and factors inapplicable to temporary maintenance removed. Provisions confirming judicial practice, concerning allocation of responsibility for family expenses and the independence of decisions on temporary and cost-divorce maintenance, have been added. The bill retains provisions for courts to consider the length of marriage in setting the duration of maintenance so that judges hearing cases involving short-term marriage may terminate maintenance before the divorce is final. And, last, the bill lowers the income cap used in temporary maintenance provisions from $500,000 to $200,000. The $200,000 cap takes into account the high cost of litigating a right to maintenance without the kind of simplified method provided for families by maintenance guidelines. This cost is sufficiently high so that only the wealthiest divorcing spouses can afford to litigate maintenance.

Section two of this bill extends the benefits of the temporary maintenance provisions to post-divorce maintenance awards. Post-divorce maintenance awards remain the "wild card" in divorce litigation. Awards are still inconsistent and unpredictable, and lengthy, expensive litigation is still necessary to achieve equitable results. Using guidelines based on a formula with flexibility for adjustments up and down for final maintenance will change this.

Much of the second section of the bill tracks the language of the temporary maintenance law, including the restated and clarified provisions set forth in this bill for calculating the guideline amount of a temporary maintenance award. The major differences between the temporary and post-divorce maintenance provisions are the provisions on duration. Temporary maintenance usually lasts until a legal case concludes with a final judgment of divorce, except where courts terminate temporary maintenance prior to the divorce becoming final based on consideration of the length of marriage as mentioned above. Post-divorce maintenance needs its own clear end point, and this bill proscribes a duration calculated as a percent of the length of the marriage. Like the recommendations on duration in the AAML Commission and the ALI Principles, the longer the marriage, the longer the time post-divorce maintenance will be paid. The bill also provides that maintenance payments will end on the death of either party.

Section three of this bill amends New York's divorce laws to provide guidance for the court in deciding applications for modification of maintenance awards. it specifies that a substantial change in circumstances includes remarriage of the payee spouse but only when the remarriage results in a substantial change in the payee's financial circumstances, and the actual retirement of the payer but only when retirement results in a substantial change in the payor's financial circumstances, in addition to financial hardship. While remarriage does not necessarily improve financial status, remarriage in some cases may better significantly the financial standing of the payee spouse. When it does, this section allows a judge to modify an earlier order. Just as remarriage does not necessarily improve the financial status of a payee spouse, retirement does not necessarily worsen the financial outlook of a payor spouse. Retirement has become

a fluid concept. People commonly work beyond traditional or social security retirement ages, and many who retire from one job find other employment, either full-time or part-time. Judges can make fair determinations about modifications by examining the changed financial status upon actual retirement.

Section four of the bill adopts the guideline approach to spousal support proceedings brought in Family Court. The bill's spousal support provisions closely track provisions for temporary maintenance and make available to vulnerable spouses the same kind consistent, predictable results that maintenance guidelines provide to divorcing couples.

Section six amends the Domestic Relations Law to eliminate a form of marital property, enhanced earning capacity, recognized by the Court of Appeals in O'Brien v O'Brien, 66 NY 2d 576 (1985). Two essential elements of the post-divorce guideline provisions of this bill make possible the elimination of the treatment of enhanced earning capacity as marital assets. First, the formula used in the bill's post-divorce maintenance provisions is based on a rough assessment of future earnings, i.e. current earning capacity, while provisions for adjusting the guideline obligation allow judges to fine-tune the initial assessments about what spouses are likely to earn post-divorce. Second, the provisions for post-marital maintenance in this bill, like obligations created in equitable distribution provisions, allow for payments regardless of whether or not the recipient remarries. Only if maintenance is calculated through use of guidelines for both amount and duration and only if maintenance payments may continue after remarriage can maintenance substitute for treating enhanced earning capacity as a marital asset. To eliminate enhanced earning capacity as a marital asset without these critical reforms to our maintenance laws would be a great in justice to spouses who have sacrificed their education and/or careers for the benefit of the marital partnership.

Section seven amends the Domestic Relation Law relating to applications made to the court by a spouse when their former spouse is cohabitating with another person and is holding themselves out as a spouse of that person. This section changes the language from "wife" and "husband" to "spouse." Currently, the law assumes the wife is the party cohabitating and being paid maintenance, and the husband is making the application to the court for a change in maintenance paid.

Legislative history

This is a new bill.

Fiscal implications for state and local governments

None.

Effective date

This act shall take effect on the sixtieth day after it shall become a law.