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In Many States, Alimony Reform Has Gone Too Far

To read this article directly on the ForbesWomen and/or to leave a comment, please click on this link: http://blogs.forbes.com/jefflanders/2011/07/12/in-many-states-alimony-reform-has-gone-too-far/

Image(s): FreeDigitalPhotos.net

Over the past few years, an alimony reform movement, of sorts, has taken shape across the nation, and now many consider “lifetime alimony” a thing of the past — a relic from the days when very few wives worked outside the home. Indeed, most states already have revised their alimony laws, setting limits on the duration and amounts of payments.

But, do these alimony reforms go too far?

In many cases, I think they do.  Sadly, it seems that stay-at-home moms and other women with little or no income of their own have lost their voice in state legislatures largely controlled by men.

For me, the arguments in favor of alimony are straightforward.  If a woman has been in a long-term marriage, and she has either been out of the work force for decades or has an income that is substantially less than her husband’s, I believe she needs –and deserves –alimony in order to maintain a post-divorce lifestyle that’s at least somewhat comparable to the lifestyle she enjoyed during the marriage.

(Of course, the same applies for a man who is divorcing under similar circumstances [he stayed out of the work force, has less income]. Even now, though, it’s still typically the woman who needs alimony.)

Further, let me point out that alimony payments are almost always determined by both the payor’s ability to pay and the payee’s need, and that, in general terms, I agree that the term of alimony should be directly related to the term of the marriage.

Yet, as I see it, laws that push beyond these reasonable parameters often go too far and represent a huge step backward for women.

To illustrate my point, let’s take a look at what’s happening in Boston, where legislators are now considering the Alimony Reform Act of 2011, a proposed bill that would dramatically change how alimony payments are determined in the Commonwealth of Massachusetts.

As it stands now, judges in Massachusetts cannot cap the duration of alimony awards. That means one spouse can end up obligated to pay alimony indefinitely.

If passed, the MA Alimony Reform Act of 2011 would change all that by limiting how long alimony payments could last, based on the length of the marriage. For example, if a couple was married for between 10 and 15 years, the maximum alimony term would be 70 percent of the time the couple was married. If a marriage lasted five years or less, alimony payments “shall be no greater than one-half the number of months of the marriage.”

In addition, the proposed bill establishes three new categories of alimony payments:

  • general term alimony, which provides regular payments to the former spouse who is economically dependent
  • rehabilitative alimony, which is given to a spouse who is eventually expected to become financially independent
  • reimbursement alimony, which is paid to a spouse in a short-term marriage who helped pay for a spouse to complete a degree

According to the Massachusetts Reform Alimony website, there are 10 key reasons to support this new alimony reform bill. I agree with many of these reasons, including:

  • ending alimony with the remarriage of the alimony recipient
  • limiting alimony term extensions and requiring clear and convincing evidence
  • reducing alimony payment for payment of health insurance and/or life insurance
  • excluding a second job or overtime income from alimony modification

However, I also think a few of the proposed reforms are simply wrong.

For instance, I disagree with how the MA Alimony Reform Act of 2011 wants to:

  • suspend, reduce or terminate alimony for cohabitation. That’s a bad idea. Cohabitation does not necessarily mean that the person you’re living with is supporting you.  Plus, what if the relationship turns out to be short-lived? Why should women have to risk permanent loss of alimony because they want to cohabitate?
  • limit alimony amounts. As I see it, alimony should be based on the payor’s ability to pay and the payee’s need. The goal, in most cases, is to allow the payee to maintain a post-divorce lifestyle that’s at least somewhat comparable to the lifestyle she enjoyed during the marriage.
  • terminate alimony when the payor reaches retirement age or when he or she is eligible for the old-age retirement benefit under the United States Old-Age, Disability, and Survivors Insurance Act, 42 U.S.C. 416. (And note: According to the proposed reforms, the payor’s ability to work beyond this age shall not be a reason to extend alimony.) Obviously, this “reform” is terrible news for women, especially for those who happen to be married to older men. If the husband is still earning a substantial income and has the ability to pay –and if the recipient still has the need to receive alimony –why should reaching the retirement age for the collection of Social Security benefits matter at all? Based on this provision, women in Massachusetts may want to start carefully calculating the timing of divorce. Or, maybe they should only marry younger men!
  • allow modification of existing alimony awards. The proposed bill actually states that existing alimony awards can now be modified if this law passes. What a disaster for women that negotiated in good faith –and perhaps gave up property or other rights as part of those negotiations –and thought they could rely on a certain amount of money for a certain amount of time. Their ex-husbands will be laughing all the way to the bank!

At the moment, Massachusetts is one of a small handful of states that still allows lifetime alimony awards. If the proposed bill passes (as expected), the Commonwealth will join several other states that I believe now put women at increased risk of an unstable financial future.  In Texas, for example, alimony (or spousal maintenance, as it’s called there) is severely limited. Payments cannot exceed three years, unless the payee has a disability that prevents her from becoming self-supporting. In addition, there is an alimony cap of either $2500 per month or 20 percent of the payor’s monthly gross income, depending on which is less. (See a state-by-state listing of alimony laws here.)

Interestingly, this summer, the Tennessee Supreme Court heard arguments on a case that could change lifetime alimony awards in that state, as well.

My firm exclusively represents women, and as I watch the alimony landscape continue to evolve, I become increasingly convinced that an upfront lump sum payment in lieu of alimony is, in the vast majority of cases, the preferred option if there are sufficient assets available to do so.

Image provided by freedigitalphotos.net

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