INSTALLMENT I: WHEN THE PAYOR RETIRES, WHAT THEN?
by Marion Lee Wasserman
Introduction
Family lawyers are abuzz in Massachusetts, talking of probable passage of The Alimony Reform Act of 2011. The statute has a title that speaks for itself: “An Act to Reform and Improve Alimony.” When it comes to alimony law, reform and improvement have been sorely needed in Massachusetts for some time.
Divorcing parties and the professionals who assist them need to know what to expect if the proposed law passes. Indeed, discussions of alimony in current cases are taking place in the shadow of possible near-term reform.
This article will take a close look at the proposed legislation, starting with the issue of retirement, and expanding to cover other key issues in subsequent installments.
The discussion of retirement concerns what the proposed legislation (the “Act”) calls “General Term Alimony.” General Term Alimony is alimony that is paid to an economically dependent spouse and that does not fall within any of the special, limited alimony categories established under the Act: namely, Rehabilitative Alimony, Reimbursement Alimony or Transitional Alimony. The three special types of alimony will be discussed in a separate installment.
When the Payor Retires, What Then?
The proposed legislation (the “Act”), if it passes, will be a help to the alimony payor who would like to retire and stop paying alimony. Under the Act, “General Term Alimony” terminates when the payor attains “full retirement age when he or she is eligible for the old-age retirement benefit” under Social Security. For marriages of twenty years’ duration or less, General Term Alimony is also subject to duration limits, which may, depending on the facts of the situation, result in termination prior to the payor’s retirement.
Note that the Act speaks in terms of “attaining the full retirement age ….” It does not say, “retires.” This would seem to suggest that even if the payor works beyond full retirement age, alimony will terminate. The language of the Act does not affirmatively say that termination will take place even if actual work continues, but this seems implicit in the Act’s wording. The Act does affirmatively say that “The payor’s ability to work beyond said age shall not be a reason to extend alimony ….”
This is complex legislation for a complex set of problems. So, not surprisingly, exceptions abound. Regarding the age-linked termination of General Term Alimony, the court may deviate from the basic rule, as follows. “When the court enters an initial alimony judgment, the court may set a different alimony termination date for good cause shown.” Also, if a General Term Alimony recipient asks the court to extend an alimony award (beyond the payor’s retirement or otherwise), the court may grant an extension for good cause shown, provided that a material change of circumstance occurred after the original order was entered and provided that reasons for the extension are ” by clear and convincing evidence” (a strong standard).
What is meant by “full retirement age”? The Act says that this means “the payor’s usual or ordinary retirement age for United States old-age social security benefits. It shall not mean ‘early retirement age’ if early retirement is available to the payor or ‘maximum benefit retirement age’ if additional benefits are available as a result of delayed retirement.”
If the Act passes, what is its effect on the retiring alimony payor whose obligation was established by an alimony judgment issued prior to the Act’s passage? The Act specifically answers this question: “… any payor who is eligible for the full old age benefit …or who will become eligible for said benefit within three years from the date this act takes effect, may file a complaint for modification one year after this act takes effect.”
Again, there is an exception. The Act does not under any circumstances permit a modification of an alimony judgment issued prior to the Act’s passage if the parties “have agreed that their alimony judgment is not modifiable, or in which the parties have expressed their intention that their agreed alimony provisions survive the judgment and therefore are not modifiable.”
The Act’s approach to retirement — alimony termination except when deviation is warranted for good cause shown — would provide some much-needed guidance in Massachusetts. Currently, unless the parties reach a voluntary agreement on termination, alimony awards are open-ended, and when a retiring payor returns to court seeking a termination of alimony, there is no presumption that alimony terminates absent good cause shown. The lack of such a presumption was expressly stated by the Supreme Judicial Court in 2009 in the case of Pierce v. Pierce; and, to the surprise of many family lawyers, the Court in that case ordered the retired payor to continue paying alimony.
No doubt about it … Massachusetts is home to many current and prospective alimony payors who have their fingers crossed, hoping the Act will pass.
Copyright © 2011 Marion Lee Wasserman. All rights reserved.
The above article is provided for general informational purposes. This article is based on proposed Massachusetts law and applies to Massachusetts only. Furthermore, it is not intended to apply to any specific facts or circumstances and should not be construed or applied as legal advice or legal opinion or as tax advice or as establishing an attorney-client relationship.
