New York Legislature Passes New Statute Modifying Temporary and Post-Divorce Spousal Maintenance Formulas

On June 24, 2015, the New York State Senate passed Bill A7645-2015 which modified the duration and amount of temporary and post-divorce spousal maintenance. The bill passed the State Assembly on June 15th. It is expected to be signed by Governor Cuomo in the near future.

The new law’s formulas apply to actions commenced on or after the 120th day after the bill become law (except for the temporary maintenance formulas which apply to actions commenced on or after the 30th day after the bill become law). The new law can not be used as a basis to change existing orders and agreements.

The new law represents a very significant change to the post-divorce spousal maintenance provisions of Domestic Relations Law §236, as well as temporary spousal maintenance provisions that were passed in 2010.

As to maintenance, the following are the key aspects of the law contained in the Sponsor’s Memo:

The “cap” on the payor’s income used for the maintenance formula is $175,000, above which will be a matter of the court’s discretion. This reduces the cap (which now applies only to temporary pendente lite maintenance) from $543,000. The same $175,000 cap applies to post-divorce maintenance awards.

The statutes creates two formulas: one where child support will be paid to the maintenance recipient; and one where child support will not be paid, or where it will be paid to the maintenance payor. Those formulas are as follows: a. With child support where the maintenance payor is also the non-custodial parent for child support purposes: (i) subtract 25% of the maintenance payee’s income from 20% of the maintenance payor’s income; (ii) multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result; (iii) the lower of the two amounts will be the guideline amount of maintenance; maintenance payor is the custodial parent for child support purposes: (i) subtract 20% of the maintenance payee’s income from 30% of the maintenance payor’s income; (ii) multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result; (iii) the lower of the two amounts will be the guideline amount of maintenance.

First, maintenance gets calculated. Next, child support is calculated using the income of the payor after subtracting maintenance to be paid, and the income of payee income, including maintenance received.

The court may adjust the guideline amount of maintenance up to the cap where it finds that the guideline amount of maintenance is unjust or inappropriate after consideration of one or more factors, which are to be set forth in the court’s written or on the record decision. Where there is income in excess of the cap, additional maintenance may be awarded after consideration of one or more factors, which are to be set forth in the court’s decision or on the record.

When determining temporary maintenance, the court can allocate between the parties the responsibility for payment of family expenses” while the divorce action is pending. The definition of income for post-divorce maintenance will include income from income-producing property that is being equitably distributed. New factors in post-divorce maintenance will include: termination of child support, income or imputed income on assets being equitably distributed, etc. The duration of post-divorce maintenance is a function of a formula that includes ranges of different percentages of the marriage length, depending on how long the marriage lasted. For marriages of zero to 15 years, the guideline for maintenance awarded would be 15% to 30% of the length of the marriage; for marriages of more than 15 up to 20 years, maintenance would be 30% to 40% of the length of the marriage; for marriages of more than 20 years, maintenance would be for 35% to 50% of the length of the marriage. However, nothing prevents the court from awarding non-durational, post-divorce maintenance in an appropriate case.

In determining the duration of maintenance, the court is required to consider anticipated retirement assets, benefits and retirement eligibility age. Actual or partial retirement will be a ground for modification of post-divorce maintenance assuming it results in a substantial diminution of income.

As an example of the application of the formulas, consider the following calculations where a) the payor is the non-custodial parent and having C.S.S.A.-adjusted income of $150,000, and the payee is a custodial parent having C.S.S.A.-adjusted income of $50,000; and b) the payor and payee have the same incomes but there are no children being supported.

Calculation of Spousal Maintenance-page-001

Calculation of Spousal Maintenance-page-001

 

Additionally, the new law eliminates value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement as a marital asset. This is a significant change from the existing law. However, enhanced earnings may still be considered by the court when distributing other marital assets.

The changes to the Domestic Relations Law, once effective, will likely result  in greater uniformity of spousal support awards. Further, elimination of enhanced earnings as a distributable asset represent a significant change in New York’s law.

Terminating Spousal Support Provisions After Divorce Due to Change In Circumstances

In New York, spousal support, also sometimes referred to as “alimony” or “spousal maintenance” can be granted in a divorce case to either spouse by the court pursuant to Domestic Relations Law §236. Alternatively, the parties can agree to a specific amount of maintenance, its duration, and the circumstances under which it will terminate in their settlement agreement.

Factors that a judge or the parties will consider in determining spousal support, among others, include:

The duration of the marriage and the age and health of both parties;
The present and future earning capacity of both parties;
The ability of both to become self-supporting;
The reduced or lost lifetime earning capacity resulting from having foregone or delayed education, employment training or career opportunities during the marriage;
The presence of children;
Tax consequences.

Even once the amount of maintenance is determined and included in the judgment of divorce or settlement agreement, spousal maintenance can be modified.

However, if the maintenance was set by the parties’ settlement  agreement, the party seeking its modification due to a change in circumstances will have to meet a significant burden of proof. Specifically, the party seeking the change will have to show prima facie evidence of “extreme hardship” before the court can hold a hearing to resolve these issues. Extreme hardship means that the payor’s circumstances are so adverse that the party can’t meet its living expenses without modifying spousal support. In a recent decision, McKelvey v. McKelvey, 2015 N.Y. Slip. Op. 02830 (3rd Dept. 2015), the Appellate Division found that the husband presented such evidence when he was able to show that “the undisputed proof indicating that the husband earns, after taxes, less than his monthly support obligation was sufficient to demonstrate prima facie evidence of extreme hardship, and Supreme Court should have held a hearing on his request to modify his support obligation.” Once such evidence is presented then the court hearing the case would hold a fact-finding to determine how spousal maintenance should be modified.

If spousal maintenance was set by a judge after a hearing, the party seeking the modification must establish a substantial change in circumstances and show that the needs of the dependent spouse or financial abilities of the paying spouse that warrant modification. The party making such request would face a significant burden and the court will have to consider such factors as the party’s current and past earnings, costs of living, financial obligations, as well as assets and liabilities.  In Klapper v. Klapper, 204 A.D.2d 518 (2d Dept. 1994), the Second Department held that, in determining whether there was a substantial change in circumstances sufficient to warrant downward modification, “the change is to be measured by a comparison between the payor’s financial circumstances at the time of the motion for downward modification and at the time of divorce or, as the case may be, the time that the order of which modification is sought was made.”

Further, a party who willfully or voluntarily reduces income will not receive a reduction in support payments. If evidence of such actions is presented to the court, the party seeking modification will not receive and is also likely to be ordered to pay the other spouse’s attorneys’ fees.

Temporary Maintenance and Payment of Additional Expenses by Monied Spouse

One issue that comes up fairly often in divorce cases is the issue of whether the monied spouse who is paying temporary maintenance is also responsible for additional expenses incurred by the non-monied spouse. At least some of the prior decisions held that when the temporary maintenance is being paid, the recipient was responsible for his or her living expenses, including any mortgage payments or housing expenses.

However, it appears that at least some of the appellate decisions hold otherwise. In Vistocco v. Jardin,116 A.D.3rd 842 (N.Y.A.D. 2 Dept.), the parties were married in 1995 and had three unemancipated children. The wife made a request for temporary maintenance as well as for payment of carrying costs on the marital residence. The trial court awarded the defendant $3,000 per week for child support and $3,000 per week in temporary spousal maintenance, directed the plaintiff to pay the mortgage and taxes on the marital residence where the defendant resided with the parties’ children, directed the plaintiff to pay the defendant’s car insurance, and awarded the defendant interim counsel fees and expert fees in the sums of $12,500 and $3,500, respectively. The Appellate Division affirmed.

The plaintiff argued that the Supreme Court erred in directing him to pay, in addition to spousal maintenance, the mortgage and taxes on the marital residence and the defendant’s car insurance. He contended that the pendente lite maintenance award is intended to cover the defendant’s basic living expenses, which include the mortgage, property taxes, and her car insurance. The Appellate Division held that the formula to determine temporary spousal maintenance that is outlined in Domestic Relations Law § 236(B)(5-a)(c) is intended to cover all of a  payee spouse’s basic living expenses, including housing costs, the costs of food and clothing, and other usual expenses (see  Khaira v. Khaira, 93 AD3d 194). It further held that it may be appropriate to direct payment by the monied spouse of the mortgage and taxes on the marital residence and other expenses of the nonmonied spouse under certain circumstances (see id.). In light of the evidence that the plaintiff’s income exceeded $500,000 and the gross disparity between the plaintiff’s income and the defendant’s income, the trial court properly awarded additional support in the form of a directive to the plaintiff to pay the mortgage and taxes on the marital residence (Domestic Relations Law § 236[B][5-a][c][2][a][ii] ), as well as the defendant’s car insurance.

Unfortunately, until the Court of Appeals hears a case involving these issues, it is likely that there will not be uniformity among the trial court decisions. If you are non-monied spouse, you have nothing to lose by making a request for carrying costs of the marital residence, provided that there is financial wherewithal on the part of the monied spouse. Ultimately, a decision of whether such additional should be requested should be made on case by case basis.

Standard of Living, Diminished Income, Spousal Maintenance and Child Support

The courts in New York have had some difficulty dealing with situations were a claim of recently diminished income has been presented to the court in response to a temporary spousal support application. In most situations, the courts would either impute income or deny downward modification. The courts have been concerned with the parties’ standard of living for the non-monied spouse and the children despite  the claims of the income-producing spouse of diminished resources and/or income. One trial decision, S.A. v. L.A., 2 Misc.3d 7441 (Sup. Ct. Westchester Co.), illustrates the situation where the present financial situation – the husband earning a lot less income than existed throughout the marriage, has led the court consider present circumstances and to caution the non-monied spouse that she would have to deal with a new economic reality.

In considering interim spousal support, the court had to determine if it would apply the husband’s 2012 income of $819,049 or his far lesser annualized 2013 income imputed at $240,000. The husband was 56 years old and employed in the financial services industry. The wife was 64 years old stay-at-home wife and mother, who has not had any significant for 23 years of the marriage. The husband claimed that he was terminated from his old job through no fault of his own and he was forced to find new employment at a much lower rate of pay. The wife argued that he had voluntarily left his former employment.

The court had to address the principles of utilizing the current income as opposed to the income on the last tax return on a presumptive temporary maintenance calculation. The court determined that according to the language of the Domestic Relations Law §240 (1-b) (b) (5), the income rules applicable in child support proceedings may be used to determine an application for temporary spousal maintenance, as is available for interim child support.

The second part of the court’s analysis, and of great significance, was the court’s view of the parties’ present diminished financial situation from their historic standard of living even as measured by the immediately preceding year. The reduction in the family’s income from the husband’s 2012 adjusted gross income of $819,049.00 to the annualized 2013 income of $240,000.00, was accepted by the court. As result, instead of presumptive temporary support of $17,000.00 per month as requested by the wife, the court awarded $5,737.00 per month. The court further found that with the requested amount of $17,000.00 exceeded the wife’s legitimate monthly expenses, rendering the presumptive award unjust and inappropriate. The court ruled that the issue of whether the husband had been discharged or voluntarily separated from his old employment was reserved for trial.

In its decisions, the court stated that:

The court recognizes that the spousal support provisions in this decision and order will greatly affect the parties’ respective post-separation standards of living. They need to consider the financial predicament they are in, and how to deal with the future. They are now suffering the consequences of their prior high standard of living. It is beyond dispute that two cannot live as cheaply as one, and that “hardship” at any economic level follows drastic losses of income. It is time for the parties to recognize the financial reality they may well face in the future, given their ages, work experience and future prospects for employment. The court urges that the parties’ focus should be on financial planning with asset and debt liquidation. The continuance of this costly litigation will not heal their wounds, both economic and emotional, already suffered, but rather will exacerbate them.

The decision in S.A. v L.A. illustrates that during the difficult economic times, the parties may have to temper their expectations. If a monied spouse can not earn past levels of income through no fault of his or her own, the non-monied spouse is likely to have to share the hardship as well.

Update on Duration of Maintenance

When New York Legislature passed the “no-fault” divorce statute in 2010, it created a formula for calculating temporary spousal maintenance under DRL §236[B]5-a. However, it did not set forth a formula or specific rules for establishing spousal maintenance post-divorce in terms of both amount and duration.

Thus, family law attorneys have to rely on court decisions as a basis for estimating likely spousal maintenance awards. In Monroe County, in a typical maintenance case, it is likely that a spouse who is entitled to receive maintenance is likely to receive spousal maintenance with length of one third duration of the marriage.  This rule of thumb has been utilized by a number trial court judges and lawyers. However, not every trial judge subscribes to it, and each judge’s views of maintenance are likely to impact such awards.

In a recent case, Zufall v. Zufall, 2013 NY Slip Op 06142 (4th Dept. 2013),  The Appellate Division, Fourth Department, has confirmed this. In Zufall, the parties were married for 21 years and have five children, one of whom was emancipated. During the marriage, plaintiff was primarily a homemaker, raising the parties’ children while defendant worked as a correction officer. Shortly before divorce action was commenced, defendant retired at the age of 50 after 25 years of service. Plaintiff has been determined by the Social Security Administration to be 50% disabled, and she receives partial Social Security disability benefits of $622 per month plus workers’ compensation benefits of $400 per month. She also works 20 hours per week as a bartender, earning $5 per hour plus tips.

The court stated that after considering the statutory factors enumerated in Domestic Relations Law § 236 (B) (6) (a) — particularly, the length of the marriage; the income and property of the parties, including the marital property distributed by the court; and the present and future earning capacity of the parties,  “[w]ith respect to the duration of maintenance, however, we agree with defendant that the court’s award is excessive insofar as the court ordered defendant to pay maintenance until plaintiff turns 62, i.e., for approximately 18 years. We conclude that a term of seven years from the date of commencement of the action “should afford the plaintiff a sufficient opportunity to become self-supporting”.”

Given the circumstances, the trial level award of 18 years of maintenance was probably too long.  As a result, it appears that the Appellate Division, Fourth Department, has adopted a bright line rule of awarding spousal maintenance for one third of the duration of the marriage.

It will be interesting to see if this standard will survive any changes to the Domestic Relations Law that may come as a result of the Law Revision Commission’s report issued in May.

Future Changes to Spousal Maintenance

When New York Legislature passed the “no-fault” divorce statute in 2010, it created a formula for calculating temporary spousal maintenance under DRL §236[B]5-a. However, it did not set forth a formula or specific rules for establishing spousal maintenance post-divorce. At the same time, the Legislature directed that a law revision commission be set up to review New York’s spousal maintenance law and make recommendations to the legislature with regard to potential changes.

On May 15, 2013, the Commission issued its “Final Report on Maintenance Awards in Divorce Proceedings”.  The Commission recommended that that a mathematical formula be used to calculate a presumptive award of post-divorce income from one party to the other based on the parties’ combined adjusted gross income of $136,000. It stated that in awarding post-divorce income, the court can adjust the presumptive award based on a set of statutory factors if it finds that the presumptive award is unjust or inappropriate based on the circumstances of the parties.  If the parties’ combined adjusted gross income exceeds $136,000, the Commission recommended that the mathematical formula apply to that portion of the parties’ combined income which is at or less than $136,000, and that the court be guided by a set of factors in considering whether an additional award is justified based on any excess income.

The Commission also recommended that the duration of any post-divorce income award be based on consideration of the length of the marriage, the length of time necessary for the party seeking post-divorce income to acquire sufficient education or training to enable that party to find appropriate employment, the normal retirement age of each party as defined by the Internal Revenue Code and the availability of retirement benefits, and any barriers facing the party seeking post-divorce income with regard to obtaining appropriate employment, such as child care responsibilities, health, or age. The court would have to state the basis for the duration of the award in its decision granting the award. Further, the duration of temporary maintenance awards would be limited so that maintenance awards do not exceed the length of the marriage.

One suggestion that was made by the Commission that would be a significant departure from the existing law is that the Commission recommended that one party’s increased earning capacity, no longer be considered as a marital asset in equitable distribution under section 326B(5), and that any spousal contribution to the career or career potential of the other party be addressed in an award of post-divorce income. The concept of an “increased earning capacity”, also known as “enhanced earnings“, has created much prior litigation because of the asset’s intangible nature, the need for valuation, the speculative nature of its “value” as well as the costs associated with valuations, and problems of double counting increased earnings in awards of post-divorce income and child support.

The Commission additionally recommended that the provisions of a revised temporary maintenance statute in the Domestic Relations Law be mirrored in section 412 of the Family Court Act governing spousal support awards.

If the Legislature adopts the report, it is likely to represent some of the most significant changes to New York’s Family law since New York adopted its equitable distribution and child support statutes. It remains to be seen if the Legislature will accept some or all of the Commission’s recommendations.

Tax Implications in Divorce – Need for Trial Evidence

One of the issues that frequently comes up in divorce is cases has to do with tax implications of the divorce action.  Tax issues may involve dependency exemptions, or may involve issues dealing with allocation of taxes on income or assets subject to equitable distribution.  The courts have addressed these issues in the past and have always required some admissible proof with respect to tax implications of the relief sought in the divorce action. However, some parties still fail to present admissible trial evidence that would allow the court to make decisions allocating tax liabilities, if any.

In Bayer v. Bayer, 80 A.D.3d 492 (1st Dept. 2011), the Appellate Division had to address whether the trial court properly disregarded the tax consequences impacting plaintiff’s receipt of fifty percent of monies which defendant had earned in the fiscal quarter preceding commencement of the divorce action.  The Appellate Division held that since defendant failed to present evidence from which the court could determine the amount of such taxes, the trial court acted properly.  The Appellate Division relied upon D’Amico v. D’Amico, 66 A.D.3d 951 (2nd Dept. 2009).  In D’Amico, the court held that “[W]hile this court has recognized that the value of a pension should be discounted by the amount of income tax required to be paid by a party, where the party seeking the discount fails to present any evidence from which the court could have determined the dollar amount of the tax consequences, the computation of the award without regard to tax consequences will be deemed proper”. (citations omitted)

Therefore, if there are tax issues associated with dependency exemptions, maintenance, retirement assets or equitable distribution, in order to have trial court consider those issues , a party must present admissible evidence of any tax consequences that may result. If a party fails to do so, the trial court will not consider any tax implications. As a result, a party seeking the court’s decision with respect to tax issues will have to present expert testimony of an accountant who would be able to present admissible evidence of any tax implications.

New Temporary Maintenance – How Does It Work?

Among recent changes to New York’s divorce laws, the legislature amended provisions of the Domestic Relations Law that deal with temporary spousal maintenance.  DRL §236(B)(5-a)(c) presently includes a formula which, if applied according to the statute, results in the presumptively correct amount of temporary maintenance. DRL §236(B)(5-a)(c)(1) describes how those provisions are applied:

(a) the court shall subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.
(b) the court shall then multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent.
(c) the court shall subtract the income of the payee from the amount derived from clause (b) of this subparagraph.
(d) the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars.

According to the legislative documents, the legislature intended that the temporary maintenance guidelines would only result in an award when there is an income gap between the two parties such that the less-monied spouse’s income is less than two thirds of the more-monied spouse’s income. For instance, if the payor’s annual income is $60,000 per year, the guidelines will only result in an award if the payee’s annual income is less than $40,000. The numerical guideline is only applied to the payor’s income up to $500,000 of her/his income, with a set of factors to be applied by the court to determine any additional amount of temporary maintenance on the payor’s income above this $500,000 cap.

Here are some examples of how the statute works:

Example 1

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $60,000
Payee‘s Income $30,000
Combined Income $90,000
Step # 2: Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $60,000) = $18,000
Minus
20% of Payee‘s Income (20% x $30,000) = $6,000
Result of Calculation # 1: $12,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $60,000
Plus
Payee‘s Income = $30,000
Combined Income Equals $ 90,000
Multiplied by 40% ($ 90,000 x 40%) = $36,000
Subtract Payee‘s Income from Product:
($36,000 minus $30,000 = $6,000)
Result of Calculation # 2: $6,000

Because paragraph (d) provides that the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars, and because Calculation # 2 is the lesser amount, specifically, $6,000, Calculation # 2 controls, and the temporary maintenance award would be $6,000.

Example 2

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $120,000
Payee‘s Income $80,000
Combined Income $200,000
Step # 2:
Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $120,000) = $36,000
Minus
20% of Payee‘s Income (20% x $80,000) = $16,000
Result of Calculation # 1: $20,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $120,000
Plus
Payee‘s Income = $80,000
Combined Income Equals $200,000
Multiplied by 40% ($ 200,000 x 40%) = $ 80,000
Subtract Payee‘s Income from Product:
($80,000 minus $80,000 = $0)
Result of Calculation # 2: $0

Because paragraph (d) provides that the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars, and because Calculation # 2 is the lesser amount, specifically, zero, Calculation # 2 controls and the temporary maintenance award would be zero.

Example 3

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $100,000
Payee‘s Income $20,000
Combined Income $120,000
Step # 2: Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $100,000) = $30,000
Minus
20% of Payee‘s Income (20% x $200,000) = $4,000
Result of Calculation # 1: $26,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $100,000
Plus
Payee‘s Income = $20,000
Combined Income Equals $120,000
Multiplied by 40% ($120,000 x 40%) = $48,000
Subtract Payee‘s Income from Product $100,000
($48,000 minus $20,000 = $28,000)
Result of Calculation # 2: $28,000

Because paragraph (d) provides that ―the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars,and because Calculation # 1 is the lesser amount, specifically, $26,000, Calculation # 1 controls and the temporary maintenance award would be $26,000.

There are several issues that are not addressed by the new statute. Initially, prior to its enactment, judges had discretion to set temporary awards based upon the actual needs of the parties. Under the prior statute, temporary maintenance was awarded to allow the non-monied spouse to preserve his or her financial circumstances and maintain the prior lifestyle during the divorce. While the goal of the prior statute was laudatory, unfortunately, the temporary maintenance awards varied greatly from case to case.

Since the new statute creates uniformity by using a formula, temporary maintenance awards are going to be consistent as far as their amount is concerned. At the same time, the new statute doe snot address duration of the maintenance and length of the marriage of the parties. For temporary maintenance purposes, a spouse in a long term marriage would receive the same temporary maintenance award as a spouse in a short term marriage. This is likely to create an incentive for parties in a short term marriage and their lawyers to extend the divorce action as long as possible.

Another problem with the new statute is that it applies to the first $500,000 of income, someone married to person who earns well in excess of that figure would receive less under the new statute than he or she would be entitled to receive under the old law, when the full income was used for determining temporary maintenance.

Finally, the temporary maintenance statute creates certain expectations on part of both litigants and judges. For litigants, there is now an expectation that any maintenance will be at the level set by the temporary maintenance formula. For judges, it is an easy way to set the final maintenance award.

Major Changes in New York’s Family Law Are Now In Effect

Today is the day when New York’s family law begins a new era. The no-fault divorce law is now in effect and grounds for divorce will no longer preclude someone from obtaining a divorce.    In addition to the new no-fault divorce legislation, three new laws applicable to divorces and child support proceedings became effective including:

1.   a new procedure and formula for setting awards of temporary maintenance while a divorce is pending;
2.  a presumption toward grating attorneys fees to the less monied spouse during the divorce; and
3.   new circumstances for reviewing and modifying child support awards.

Here is the summary of the most important provisions of the new laws:

No-Fault Divorce

There is a new no-fault cause of action for divorce that can be granted if the spouse filing for divorce makes a sworn statement that the marriage has irretrievably broken down for a period of six months preceding the commencement of the divorce action.

Temporary Maintenance

The new law provides that maintenance is to be awarded during the divorce when one parties’ income is less than 2/3of the other spouse’s income.

The amount of maintenance is determined by the following formula as the lesser of a) 30% of the payor’s income minus 20% of the non-payor’s income or b) 40% of the combined income minus the non payor’s income.

Attorneys Fees

The  attorneys fee bill creates a  presumption that the “monied”  spouse should pay to the “non-monied” spouse interim attorneys fees in all divorce or family law case.  The purpose of the law is to make both spouses to be able to litigate their divorce case on equal basis.

Modification of Child Support

The Family Court Act (“FCA”) and matching provisions of the Domestic Relations Law (“DRL”) were amended to allow modification of an order of child support due to “substantial change in circumstances” which is now defined in a change in either party’s gross income by 15% or more.  Also, if three years have passed since the last order was entered, modified, or adjusted, the court can modify an order entered after October 13, 2010 order, unless the parties specifically opt-out of that provisions.  Additionally, a reduction in a party’s income shall not be considered as a ground for modification, unless it was involuntary and the party has made diligent attempts to secure employment.

As I have written previously, these are important development in New York’s family law and I think that it will take some time to assess their impact.  At the same time, I think that they will be welcomed by divorce lawyers in this state and will make divorce easier for the divorcing spouses. With respect to the bill establishing the formula for temporary maintenance, it is highly likely that any such temporary maintenance award is going to be used by the courts as a basis for a permanent maintenance award.

No-Fault Divorce Becomes Law In New York

The no-fault divorce bill has been signed by the Governor Patterson and will go into effect in 60 days.  That means that starting on October 13, 2010, someone who wants to be divorced in New York will no longer be required to make allegations of martial fault by the other spouse and will only be required to swear that the relationship between husband and wife has  broken  down  irretrievably  for  a period of at least six months.  The new law will apply to the divorce actions commenced on or after such effective date.

In addition, the Governor signed legislation that will revise the process for setting awards of temporary maintenance while a divorce is pending, by creating a formula and list of factors that would presumptively govern such awards. This would allow for speedy resolution of the maintenance issue, and prevent less well-off parties to divorce proceedings from falling into poverty during litigation, because they lack the resources to obtain a temporary maintenance order. Another bill would create a presumption that a less monied spouse in a divorce case is entitled to payment of attorneys’ fees. Under current law, a party that cannot afford to secure representation in a divorce proceeding must make an application for fees at the end of the process, which can force a poor individual to proceed without a lawyer, or to surrender on important issues due to lack of means. Provisions of the Domestic Relations Law related to temporary maintenance and attorneys fees will go into effect in 60 days as well.

These are important development in New York’s family law and I think that it will take some time to assess their impact.  At the same time, I think that they will be welcomed by divorce lawyers in this state and will make divorce easier for the divorcing spouses. With respect to the bill establishing the formula for temporary maintenance, it is highly likely that any such temporary maintenance award is going to be used by the courts as a basis for a permanent maintenance award.