Maintenance Flashcards
What is the general rule of maintenance?
Examine the marital lifestyle and determine what would be required to replicate it or get close to replicating it. Although it may be impossible to maintain the same lifestyle, the courts will try to make it comparable. But do not want one to barely get by and one to be sitting pretty.
As a general rule, when does maintenance terminate?
Upon death, remarriage, or cohabitation of a resident on a continuing conjugal basis.
Old rule for Determining Maintenance:
1) Court must determine whether maintenance is appropriate after considering all relevant factors.
2) Relevant factors include - income and property of each party, including marital and non-marital; the needs of each party; the realistic present and future earning capacity of each party; any impairment of the present and future earning capacity; standard of living established during marriage; duration of the marriage; age, health, station, occupation, amount and sources of income, vocational skills, employ ability, estate, liability, and the needs of the parties; sources of income; tax consequences; contribution; valid agreements of the parties; and any other relevant factor the court deems.
New Tests for determining maintenance:
1) Combined gross income of parties below $250,000 (if not, use old rule);
2) 30% of payor’s gross income;
3) Minus 20% of the payee’s gross income;
4) Equals the maintenance amount as long as the payee does receive an amount greater than 40% of the combined gross income of the parties.
How long will maintenance be given under the new system?
0-5 years = .20 5-10 years = .40 10-15 years = .60 15-20 years = .80 20+ = permanent maintenance.
What is imputation of income?
The judge will impute income to the paying spouse that they should be making but are not do the paying spouses own actions. For example, the paying spouse quit their job making 70K a year and took one making 40K a year. The judge may impute a 70K income onto the spouse if they decide they took the lower paying job in spite of the other spouse.
This can also go the other way, if the receiving spouse is not working, but could be expected to work. The judge may impute a low paying wage on them.
What are the types of maintenance?
Permanent - Could last till death, remarriage, retirement, or upon an agreed time;
Indefinite - Temporary maintenance that runs for an indefinite amount of time and then will be reevaluated;
Temporary - Lasts for a set time frame and then expires and cannot be renewed;
Rehabilitative - Paid for a certain amount of time until the person can reasonably be expected to reenter the work force;
In gross - a lump sum payment that is usually not tax deductible.
What is “unallocated child support”?
Loop hole in the IRS that allows maintenance and child support to be combined. The benefit to this is that it allows a better tax break for a higher income family.
When will maintenance be modified?
Maintenance may be modified or terminated upon a showing of a substantial change in circumstances. Factor to consider include:
1) Change in employment status and whether the change was made in good faith;
2) Efforts to become self-supporting and reasonableness in efforts;
3) Impairment of present or future earning capacity;
4) Tax consequences;
5) Duration of payments paid (and to be paid) relative to the length of the marriage;
6) Property awarded and present status of property;
7) Increase or decrease in each party’s income since prior support order entered;
8) Property acquired and currently owned by each spouse;
9) Any other factor the court decides to use.
When can the court change or modify maintenance?
The court can change or modify the terms of maintenance, even if they have not expressly reserved that right. Unless the parties have agreed otherwise. However, once the time period expires for modification, or modification ends, the court lack jurisdiction.
What is the difference between “reviewable maintenance” and “modification of maintenance”?
Reviewable Maintenance - After x amount of time, the court will review the maintenance payment to determine whether it should go up, down, or continue. There does not need to be any significant change. It can be anything as small as time passed or an agreed upon event. Basically, no substantial change is needed to review.
Modification of Maintenance - Substantial change in circumstances is required to prove a modification should be entered.
Does a recipient of maintenance have an obligation to attempt to find a job?
Yes. A recipient of maintenance has an obligation to seek training and skills to become financially independent. In determining if the party has fulfilled their requirement to attempt to “better themselves” the court will consider whether the party has acted with good faith, their current and acquired training and skills, and if there are minor children at home.
What events will trigger the termination of maintenance?
1) Death of a party;
2) Remarriage of receiving party;
3) Cohabitation with another person on a resident continuing conjugal basis;
4) Happening of an agreed upon event.
What is the Economic Needs Test and when will a court use it?
In considering maintenance, the court will use the economic needs test to decide whether maintenance should continue after the receiving party has began cohabitation with another. The test is:
1) Balance the rights and needs of the payor and recipient;
2) Cannot stop a party from cohabitation;
3) Will the receiver be stranded financially if the cohabitation breaks up?;
4) Payor must show the actual decrease of need for support because of the cohabitation.
What is the “totality of the circumstances test” as it pertains to cohabitation?
1) Does a de-facto husband-wife relationship exist?
2) Once the de-facto husband-wife relationship is established, the burden shifts to the recipient of the maintenance to establish that he or she is not engaged in that type of relationship by a totality of the circumstances;
3) Factors to consider:
(a) length of relationship;
(b) The amount of time spent together;
(c) The nature of the activities they engage in;
(d) The interrelation of their personal affairs;
(e) Have they been vacationing together; and
(f) Do they spend holidays together.
