For many couples, separation agreements are very useful tools. If you go that route, it’s important to make sure that your separation agreement is sufficiently detailed in all areas. For example, with alimony, it’s not enough to say “how much” and “for how long,” but also to address things like “when may the supporting spouse seek modification?” An experienced Maryland divorce lawyer can help you with negotiating and executing an agreement that is fair, complete, and clear.
Of course, even once you’ve done that, there may be pitfalls. For example, what happens if your spouse, who owes you alimony, experiences a non-permanent downturn in his income? Often, a temporary dip in income is not enough to lead to a reduction in your alimony but it depends on the exact wording of your separation agreement. A knowledgeable legal advocate can be essential in protecting your right to receive alimony.
Take, for example, the alimony case of C.T., a successful anesthesiologist, and his wife, R.L. They separated in 2015 and, three years later, worked out a separation agreement. That document called for the husband to pay alimony of $6,000 per month for 47 months, and then pay a lesser sum for the next 88 months.
The agreement specifically addressed alimony modification, stating that the payments were non-modifiable. The lone “out” clause allowed the husband to seek a reduction if he became “involuntarily unemployed” or if “his annual wages were reduced by more than 15 percent of his 2017 yearly wages.”
Unfortunately for the husband, he was diagnosed with cancer and a sudden income downturn was exactly what he endured. His income went from more than $340,000 in 2017 to $132,000 in 2020 and so he went back to court seeking a reduction in his alimony obligation.
In any alimony modification case in Maryland, the spouse seeking the change bears the burden of proving that a modification is appropriate. One way you potentially can do that is by demonstrating a “substantial change in one party’s financial circumstances.” There are no fixed formulas in Maryland that dictate when a change is “substantial”. It is strictly a matter of the judge’s discretion.
A Temporary Dip in Income Was Not Enough
While the husband’s income downturn was dramatic, in this case, the wife was able to defeat the motion because the evidence indicated that the husband’s income dip, while steep, was merely temporary. The husband’s oncologist testified that he would be able to return to full work within 18 months. Additionally, while the husband’s work income had dropped by more than $200,000 per year, that didn’t tell the whole story. The husband was collecting nearly $170,000 per year in disability payments, meaning that his work income plus disability was more than $300,000 per year.
Another factor helping the wife was the large disparity in the spouses’ financial situations. The husband was worth more than $3 million and was bringing in six figures every year. The wife, on the other hand, had limited net worth and was capable of earning only $50,000 per year.
In the end, the wife was able to demonstrate that the husband’s financial turn of events was not as dire as he had asserted, and therefore defeat the husband’s request to modify alimony.
Whether you need to create a separation agreement, litigate an alimony dispute, or address some other kind of divorce issue, count on the skilled Maryland family law attorneys at Anthony A. Fatemi, LLC to provide you the with knowledgeable advice and effective advocacy you deserve. Contact us today at 301-519-2801 or via our online form to set up your consultation.