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Monday, November 9, 2009

Retirement Does Not Stop Alimony - The Pierce Decision

UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.

A much awaited decision from the Massachusetts Supreme Judicial Court was published today: Pierce v. Pierce, SJC - 10381, Nov. 9, 2009. In this case, the Husband had agreed to an alimony order of $110,000 per year after a 32 year marriage, and had voluntarily retired at age 65. Upon retirement, the Husband filed a Complaint for Modification seeking the elimination of his alimony. The trial Judge reduced the alimony to $42,000 per year but declined to terminate alimony.

The Pierce appeal centered around the Husband's claim that there should be a presumption that alimony ends upon retirement. Without that presumption, the Husband argues, the person receiving alimony has the right to essentially "veto" the retirement choice.

The Court rejected this argument, stating that the Judge's decision was within her discretion, and that retirement is only one of the factors in deciding what an alimony order should be. In answering the Husband's argument that this creates a "veto", the court dances around the issue by stating that the alimony judgment "eventually will need to be reduced," but that "the supporting spouse, even after reaching a customary retirement age, in the sound discretion of the probate judge, may be expected temporarily to postpone retirement or to find part-time work to help the recipient spouse weather difficult financial circumstances.

Without saying it outright, the Court is endorsing the idea, that to some extent, when it comes to alimony the law treats the two parties as if they're still married. One spouse in a marriage doesn't have a veto over the other's decision to retire, but it is certainly something that would be discussed before a unilateral decision was made, especially if the other person is currently out of work. This is consistent with the Court's treatment of a long-term marriage forever linking two people's financial circumstances. We're not saying it's fair, just that it's consistent with the current case law, and that any changes are going to have to come from the legislature.

As an interesting side note, in it's discussion the Court reiterates the case law stating "In conducting this multifactor analysis, whether in fashioning the original alimony judgment or in modifying that judgment, the judge must weigh all the statutory factors in light of the facts of the particular case; no single factor is determinative. "

This quote could apply in a much broader sense than just to the factors in this case. For instance, many Judges have noted recently that they favor using a formula (such as the MBA-BBA Joint Tax Force Formula, explained further in the Stevenson-Kelsey Spousal Support Calculator article) . The Court's language regarding considering all factors, would appear to indicate that formulas are not allowed.

As a practice tip, this suggests that whether you are arguing the use of an alimony formula or arguing for the end of alimony upon retirement, you should always provide the underlying arguments on all of the statutory factors as well.

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