Can The Spouse Who Makes More Money Ever Completely Avoid Spousal Payments (Alimony)?

Sydney Mitchell:

Hi. My name is Sydney Mitchell.

Matthew Brickman:

Hi, I’m Matthew Brickman, Florida Supreme court mediator. Welcome to the Mediate This! Podcast where we discuss everything mediation and conflict resolution.

(00:13):
Sydney and I recently received a question from you, our listeners, that says, I make a lot more money than my soon-to-be ex-wife. Is there any way I can avoid paying spousal maintenance? So, um, I think it’s important first to know that just because you make more money doesn’t automatically mean that there’s spousal support. Um, it is important that you do know the laws in your particular state. Um, you may need to consult counsel, uh, to get some direction. But in the state of Florida, we, and, and, uh, today I’m gonna be going through Florida statute and, uh, hopefully guiding and answering this, this question here. So I make a lot more than my soon-to-be ex-wife. Is there any way I can avoid pays pain, spousal maintenance or spousal support, or also known as alimony? So what we need to do is we need to go to the Florida statute and look and see, well, what does the law say pertaining to alimony?

(01:22):
So, um, for those that are in Florida that want to know exactly where to go and look, you’re looking at chapter 61.08, um, and it says, in a proceeding for disillusion of marriage or a divorce, the court may, and that is optional, that’s not shall, that’s not a command may grant alimony to either party, which alimony may be bridge the gap, rehabilitative duration, or permanent in nature, or any combination of these forms of alimony. In any award of alimony, the court may, there’s that word again. Order periodic payments or payments in a lump sum, or both the court may, there you go, there’s that word again, consider the adultery of either spouse and the circumstances thereof in determining the amount of alimony, if any, to be awarded in all disillusion actions. The court shall. Now, there’s a command. The court shall include findings of fact relative to the factors enumerated in subsection two, supporting an award or a denial of alimony.

(02:34):
So subsection two, in determining whether to award alimony or maintenance, the court shall first make a specific factual determination as to whether either party has an actual need for alimony or maintenance, and whether either party has the ability to pay alimony or maintenance. So going back to the question at hand, I make a lot more than my soon-to-be ex-wife, is there any way I can avoid paying spousal maintenance? Well, just because you make more money doesn’t mean it’s an automatic alimony case. There has to be a need and then there has to be an ability to pay. Now, I will tell you, in all the years that I’ve lived on this planet, I have never met one person ever that did not need more money. That is an easy burden to overcome. Ability to pay that at times can be the difficult one because for whatever reason in the United States, just how this, uh, country has evolved and this, um, experiment that we live in as a country, a lot of people, um, live paycheck to paycheck or they live above their means, which means they have more debt than they have, um, assets.

(03:57):
And so while they may make a lot more money, they may be swimming in debt. And so there has to be a factual determination as to need versus ability to pay. So let’s go on with the statute. If the court finds that a party has a need for alimony, which we said, look, everybody needs more money, that’s easy or maintenance, and that the other party has the ability to pay alimony or maintenance, then in determining the proper type and amount of alimony or maintenance under subsection five through eight, the court shall consider all relevant factors, including but not limited to the standard of living established during the marriage. So they’re gonna look and say, well, how did you live? What did you spend your money on? You know, what was your standard of living? They’re gonna look at the duration of the marriage. So many people say, oh, it’s longer than X amount of years.

(05:03):
Well then this is an alimony case. No, if you look at the statute, it says first there has to be a factual determination as need versus ability to pay. If you can get past that, then you can look and see, okay, well standard of living, how long was the marriage moving on the age and the physical and emotional condition of each party, the financial resources of each party, including the non-marital and the marital assets and liabilities distributed to each. Now that’s important because in mediation we follow an acronym called peace, P E A C E P stands for parenting. E is then equitable distribution. A is then alimony, C is child support, and E is everything else. Now, if you follow that acronym, you have e equitable distribution before you have alimony. And why is that? Because that’s part of the law. Because in subsection two D it says the financial resources of each party, including the marital and non-marital liabilities distributed to each party.

(06:20):
And I’m gonna tell you a story about that and I’ll answer this listener’s question in a moment. But we’re gonna look at the rest of the factors, the earning capacities, so the educational levels, vocational skills, the employability of the parties, and when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate employment. The contribution of each party to the marriage, including but not limited to services rendered in homemaking childcare, education and career building of the other party, the responsibility each party will have with regards to the minor children they have in common. Well, there you go. There’s the p that’s parenting. That’s why we do parenting first because it is why, why we start there. Number one, it’s the most important. And number two, it has a bearing on the alimony. Um, the next one is the tax treatment and consequences to both parties of an alimony award.

(07:19):
And then we look at all sources of income available to either party, including income available to either party through investments or any asset held by that party, and then any other factor necessary to do equity and justice between the parties. So let’s go back to the question at hand is I make a lot more money. How can you avoid paying spousal support? Well, again, just because you make more money doesn’t mean that that’s an automatic. Oh my gosh, I’ve gotta pay spousal support. So let me, let me give you a story. I had a mediation and I think we probably, Sydney and I probably talked about this maybe in the alimony, uh, podcast that we did previously, but I had a mediation, um, or actually I had a client call up about a mediation and the husband, um, made considerable more money than she did.

(08:18):
Um, and he said that, you know, he was gonna only pay her a few thousand dollars a month in alimony and that was it. And she was just distraught. She’s like, I can’t live on that. There’s no way I can live on that. And so of course, following our peace acronym, I asked her, well, do you have any minor children? She said, no, they’re all grown up. So I went on to e equitable distribution. I said, well, do you own a home? Yes, do, um, and you know, I went through all the questions, what do you owe? What’s it worth? And so it turns out that they owned a home. They had a second home, they had a number of cars, collectibles, they even had a yacht, they had a jet. I mean, they had millions and millions of dollars worth of assets, and they had no debt whatsoever.

(09:15):
Um, there were retirement accounts. I mean, lots and lots and lots there. Well, the problem though was even though he made a considerable more money than her when it came down to equitable distribution, she was going to walk away with tens of millions of dollars in assets. Well, at that point, let’s go back to the statute. The court has to find that there is a need and an ability to pay. Well, when she’s walking away with over 10 million in liquidity and assets, is there a need? And when I asked this to this particular woman, I said, well, you may or may not get alimony. And she said, but if I got half of all of the stuff, I don’t need it. I said, exactly, let me give you a name of a good attorney. And so again, just because you make more money doesn’t automatically mean that you’re going to be paying alimony.

(10:17):
Now let me give you another example from another mediation that I had where the husband did make more money than the wife being that there was more money that he was making than the wife. Um, of course we still had to do the P E A C E acronym. And so we did the parenting plan and these parties were gonna have 50 50 time sharing with their children. We did equitable distribution. And so, um, inequitable distribution, now this is where it’s important in equitable distribution, they were going to divide up the marital assets and liabilities. But here was the caveat, the wife was going to get half of all of the assets normal, no problem. Great, awesome, excellent. But when it came to the liabilities, all of the liabilities, and they had a lot, um, I mean they had tens of thousands of dollars and just credit card debts.

(11:26):
And then they had student loans, they had mortgages, they had card loans. I mean, just lots and lots and lots of debt being that the husband was the primary breadwinner. Both of them worked, but he was the primary breadwinner. All of their liabilities were in his name. And so while we go through an equit distribution, we can go, okay, well the wife’s in, you know, responsible for half and he’s responsible for half. When it comes down to it, the bank can’t supersede the court and the court can’t supersede the bank. So if the husband signed up for the credit card and told the credit card company, I will be responsible to pay this back. At the end of the day, they’re coming after him. And so being that all the liabilities were in his name and being that he wanted the wife to be able to have half of the assets so that she could go and get reestablished, he said, I will take on a hundred percent of all the debt, put that in my column.

(12:37):
So the wife was walking away completely debt free and walking away with 50% of the marital assets. The husband was walking away with 50% of the marital assets, but a hundred percent of the marital debts. Well, at that point, when you look at a need versus ability to pay scenario, all of a sudden her need maybe, maybe she did need a little bit, but his ability to pay, he did not have it. Even though he made more money, he didn’t have it because of all the monthly credit card bills and everything that was due, and he was gonna have to refinance the home. And being that he was refinancing the home and the rates have gone up, then his mortgage was gonna go up. And so, you know, that that made it as though his were his cash flow in order to have the ability to pay was diminished.

(13:37):
But she was walking away, not just solvent, but she was walking away with half of the assets. Now, one of the ways that we did discuss it is we discussed that we would do equitable distribution of all the marital assets and debts, but being that the bank is still coming after him, will then her half of all of those debts would then come out of her half of the assets. So let’s say for example that, that she was getting a hundred thousand dollars in assets, but she’s responsible for $50,000 of debt. That means that actually maybe the buyout that he would owe her is only 50 because, you know, she owes him 50 for the liabilities. But then at that point, well then there would probably be an alimony obligation. The problem though is the bank is still coming after the husband because his name was on every single loan.

(14:31):
And so what was negotiated was she would walk away again with, with 50% of the assets, none of the liabilities, none of the monthly credit card debt, no car payment, none of that. And so at that point, even though he did make more than her, there was not an ability to pay. So, um, it’s not so simple, you know, as, as this listener has asked, well, is there a way I can avoid paying spousal maintenance? This is so case by case, uh, specific. And it really depends on so many different factors, what is negotiated in mediation, how we analyze everything, look at it, what the banks look at, what the family court looks at. You know how this all works. And so it’s important that if you do need legal advice, please reach out, find an attorney, uh, that you can get some legal advice, um, from if you and your spouse can work it out together.

(15:36):
Look, that’s always the best. Save the money, uh, from having to get the legal, uh, advice and having to get, um, you know, attorneys involved if you can. Um, and if, if you know, if you need help in negotiating, that is what mediation is for. We will do the analysis, look at everything, talk about pros and cons for both, uh, parties involved and give you information so you can make an informed decision on how that could possibly work. Now, before I leave you, I’m gonna give you one more scenario. So one more, uh, example that I can give you for, well, is there any way I can avoid paying spousal maintenance? I had a mediation where they did do equitable distribution. They were both walking away with quite a lot of money. Um, and like in the previous example, um, most, not all, but most of the debt was in the husband’s name.

(16:37):
The wife still had some debt. And so there could, and we say could, because going back to the, the statute, they have that word all throughout that says the court may order. And if the court finds, um, fact, then they may award, but they shall first make a specific factual finding. In order for them to have the court actually look and go through this, it would’ve cost them, you know, 15, $30,000 by the time they got done with attorneys and forensic accountants and de depositions and mediation. And so in order to avoid all of that, they created their own agreement that they could live with. And that is the beauty of mediation. And so what they decided to do was being that there was some particular risk for the husband to be paying spousal support, which he didn’t want to, and there was some risk that maybe the judge finds that the wife does not have a need.

(17:46):
What these two people actually did was they divided, um, all of their assets, 50 50, then they each took debts in their own name. But then the husband made an offer and we negotiated the offer back and forth a couple of times, but he offered that from his 50% sale of the marital home, he would give her a lump sum buyout. So we called it equitable distribution. It sort of, kind of was alimony or spousal support, but it came out of equitable distribution. So for example, if they were selling the home and there was $150,000, um, that they were each going to get from the sale of the home so that, so they’ve got equity of 300, they each get one 50. Well for example, he’d giver one 70 instead of one 50 and then he would buy out a potential alimony obligation. Now this gave certainty to her that she was getting something and getting it up front at a lump sum.

(18:57):
She could then put it as a down payment on something, go get reestablished, opposed to maybe going to court and getting pieces paid out over time, but a risk of maybe getting nothing and both of ’em spending a lot of money for that opportunity. So again, it’s mediation. Everything is up for negotiation. And so we will look at all of the, um, options that are available. There’s always options available. Even going to court is still an option. Uh, but we will discuss that with you and just know, again to this particular listener that just because you make a lot more money does not automatically mean that there is spousal support. So hopefully that answers that question and I look forward to answering more questions in the future.

Matthew Brickman:
Occasionally Sydney and I will be releasing Q & A bonus episodes where we will answer questions and give you a personal shout out.

Sydney Mitchell:
If you have a comment or question regarding anything that we discuss, email us at info@ichatmediation.com that’s info@ichatmediation.com and stay tuned to hear your shout out and have your question answered here on the show.

Matthew Brickman:

For more information about my services or to schedule your mediation with me, either in person or using my iChatMediation Virtual Platform built by Cisco Communications. Visit me online at www.iMediateInc.com. Call me at 561-262-9121, Toll-Free at 877-822-1479 or email me at MBrickman@iChatMediation.com.