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Thursday, July 24, 2014

Can Alimony continue past Retirement in Massachusetts under the new law?

Part of the significant ground-swell of support for a change to Massachusetts alimony laws came after the Pierce decision, which ordered alimony to continue past retirement.  While a quick reading of the new alimony statute might lead you to believe otherwise, there are a number of scenarios in which alimony could (and in many cases will) still continue past retirement age.

The Alimony Reform Act of 2011, which became effective on March 1, 2012 provides for multiple types of alimony, and for maximum amounts and duration of alimony.  Any alimony orders that were in effect prior to March 1, 2012 will be considered General Term Alimony, and the Act included duration limits for General Term Alimony that we described at length in a previous post.

One of the limitations on duration is contained in M.G.L. c. 208 s 49(f) and indicates that the court SHALL terminate alimony "upon the payor attaining the full retirement age."  Full retirement age is defined as 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, typically between 66 and 67 (a full retirement age calculator is available here).

However, the Court has discretion to extend "an existing alimony order for good cause shown; provided, however, that in granting an extension, the court shall enter written findings of (i) a material change of circumstance that occurred after entry of the alimony judgment; and (ii) reasons for the extension that are supported by clear and convincing evidence."

While this second part of section 49(f) certainly opens the door for a Judge to extend alimony past full retirement age for good cause shown there are two requirements which the recipient would have the burden of proving.  These two requirements require some unpacking:

1. To extend there must be written findings of a material change of circumstance that occurred after entry of the alimony judgment.

This would seem to require that the recipient must show that something significant has changed or the order should end.  In other words, if the parties are still earning the same amount of income and have similar health and other expectations as they did at the time of the judgement of divorce, then alimony should end upon reaching full retirement age.

That outcome might be considered unfair in situations where parties (and Judges) assumed under the old law that alimony would continue into retirement, especially if one party received more of the retirement assets or had substantial additional earnings during the separation.  However, it is unclear from the statute, if any of these issues would be relevant as they do not represent a material and significant change in circumstances.

There has been no guidance yet from the Appeals Court (as of the writing of this blog post) regarding this type of case.  In the Green case the Appeals Court dealt with the first part of section (f) which allows the court to deviate on the issue of post-retirement alimony at the time that the initial alimony order is created. One quote that might be relevant from Green, if a trial Judge was looking for some leeway in deciding whether to extend alimony past full retirement age, has to do with looking closely at the property division at the time of the divorce:
"the Act does not depart from the long-standing principle that alimony and property division are 'interrelated remedies that cannot be viewed apart..."  Green at 1109.
Of course, without more guidance from the Appeals Court it is unclear if this applies to cases where that property division happened prior to the enactment of the Alimony Reform Act.  On first impression, it would seem that the second part of section 49(f) would ignore the relation of the property division at the time, and limit the inquiry to any material and significant change in circumstances since that time.

Practically, in most cases that are well past their original judgment, a material and significant change in circumstances may not be that difficult to prove.  For example, if the recipient has reached retirement age as well, then their income has likely been reduced.  This could be enough to satisfy the requirements of the statute.  It would all depend on the trial judge's opinion (and possibly thereafter the Appeals Court's opinion) of whether this constitutes "good cause shown."

2. To extend there must be written findings that the reasons for the extension are supported by clear and convincing evidence.

This section appears to place the burden on the recipient to show by "clear and convincing evidence" that there has been a change as required by the first clause, and that the change represents a good reason for extending alimony.  This likely requires that the recipient prove, all over again, that there is a need and ability to pay.  While clear and convincing evidence may sound like a significant burden on the recipient the reality is that if the recipient is dependent on the alimony income, and the payor still has the ability to pay (which will often be obvious from a financial statement), then this burden is not that difficult to establish in many cases.

Upon a close reading, while the burden is placed on the recipient to prove their case by "clear and convincing evidence" part (2) of section 49(f) seems to take a lot of the teeth out of the language that alimony SHALL terminate upon the payor reaching full retirement age.  This language will have significant impact on decisions going forward, but it remains to be seen how much judges (and the Appeals Court) will be willing to apply it to cases that were decided before the Act was enacted.


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