Tag Archive for: Spousal Support

Required Reading for Involved Grandparents

Recommended reading: “Well Into Adulthood and Still Getting Money From Their ParentsWall Street Journal, January 26th, 2024.

In order to help their family thrive, many grandparents financially support their adult children and grandchildren. For example, let’s think about a couple that lives in Manhattan with an income of $350,000 – $400,000 a year. In many places, that would be a decent amount of money. If someone’s living on the Upper West Side, Upper East Side, or SoHo, it’s not nearly enough. In these situations, grandparents often give their children very large sums of money on a routine basis as well as make direct payments towards expenses like the grandchildren’s private school tuition and high-end camp experiences. 

I wrote an article called “Good Samaritan Divorce,” which talks about how the Good Samaritan often gets “punished” in some way. For your convenience, you can read the article here.

What does this have to do with matrimonial law? There are standards and statutes in matrimonial law, and grandparents’ consistent and unwavering financial support can affect the support payments. The general support standards are set forth in “The Child Support Standards Act” and “The Notice of Guideline Maintenance” – advisory guideline statutes for child support and spousal support (aka maintenance and alimony). 

The golden rule is maintaining the standard of living.

At the outset of a divorce case, both sides are required to accurately complete, legally acknowledge, and file with the courts a comprehensive document called a Statement of Net Worth, which sets forth the standard of living. 

The standard of living analysis is the most critical and guiding factor in negotiating support and arriving at a final agreed upon amount. The system wants children’s material lives to remain intact. The system wants the lower income earning spouse to have a window of time when they are getting support from their higher earner ex to give them a cushion and bridge towards being more self-supporting. 

I’ve had many cases where grandparents steadily gave money to their children’s family throughout the marriage to subsidize housing, car payments, parking, vacations, and tuition – like a weekly or monthly allowance, but for adults.

If the couple divorces, the idea of imputation comes into play.

Imputation: The assignment of a value to something by inference from the value of the products or processes to which it contributes.

Let’s say it was the husband’s father that helped support the family, the wife is going to want to come after that additional money, even though it doesn’t show in the husband’s W-2 or tax returns – that’s the inference.

Some grandparents feel like imputation codifies an agreement that would have happened anyway. Other grandparents react differently and chafe at the idea of being required to do anything. They also don’t want to be passengers on the roller coaster of their child’s divorce. 

In many instances, grandparents enter into promissory notes with their child for some or all of the funds they give – thereby making their child their debtor. They are trying to ensure that the monies are legally recorded as debts and not gifts or supplemental income. This is done to shield both the grandparent and their child in the event of a divorce. Both the grandparent and child should, however, consult with a qualified attorney when navigating this strategy. 

Understanding imputations and standard of living analyses takes a skilled matrimonial attorney – and the more experience they have, the better. Contact me at The Law & Mediation Office of Cheryl Stein to schedule a consultation.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

It Ain’t Over ‘Til the Fat Lady Sings

A basic tenet of “fight or flight” is that when people are in an extreme state of anxiety, they’ll do nearly anything to relieve that immediate pressure and discomfort to get themselves to a more bearable state. This describes what divorced people go through quite well. People crave resolution and a path forward. There’s this hope that when you finally enter an agreement, everyone will be able to breathe a sigh of relief

I don’t relish being a party pooper, but I always remind clients, “It’s not over ‘til the fat lady sings!” 

What does this mean in the context of divorce? It means that, if you have unemancipated children, you will likely be revisiting parts of your divorce agreement time and again as they grow older and unanticipated events occur, one of you wants to relocate, one of you loses a job and needs to modify child support and for a plethora of other reasons. Many divorced parents end up going back to court until their children are emancipated — and possibly afterwards if there are child support arrears. 

Sometimes, the divorce agreement is just the beginning of the legal battles. Unfortunately, this can be true even for prescient, well thought out and meticulously drafted agreements, but obviously in the latter instances, there is less exposure, so having a really solid tight-knit initial agreement in place, which leaves room for less loopholes, is key, albeit not bulletproof.  

Maintenance and spousal support are modifiable. Even if someone waives spousal support in their agreement, there is case law in which — 10 years after the agreement — one party was going to be a ward of the state and sued for maintenance. The judge ruled that maintenance had to be paid, which sounds perturbing and off-base, but the court will first look at the ex-spouse rather than let the other person be a ward of the state. Even if you try to waive support, or negotiate a certain amount, that is all modifiable. Notably, maintenance is harder to modify than child support, which has a much lower bar for modification, and includes the classic 3 bases: passage of 3 years; 15% increase or decrease in either party’s income; and a substantial change in circumstances. 

The permissibility of modification for custody holds true as well. You can have one party awarded custody because the other party was a total disaster at the time of divorce. The parent unfit at the time of the divorce can always come back later and say, “I rehabilitated myself. I need to be the joint custodial parent now” and proceed to demonstrate substantial changes in circumstances since the initial agreement and judgment of divorce were signed off on to prove their point and elevate their custodial standing.   

These requests to change custody agreements and modify child support and maintenance are very common and the post-judgment part in court is more backed up than the parts that handle the initial divorces. 

The same occurs with challenges and attempts to overturn prenuptial and postnuptial agreements. People often state that their prenup or postnup was signed under duress or coercion, or perhaps they didn’t have an attorney look at it and didn’t understand what they were signing. It is critical that attorneys who represent clients in these agreements strategize and have the necessary foresight to prevent such an eventual catastrophe to their client. 

Life circumstances change. People change their minds. Whatever reasons that they come up with, valid or invalid, people often want to get out of deals — and there’s nothing unusual about that.

To learn more about your specific circumstances, please contact us at cheryl@cherylsteinesq.com.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

The Halo of Fear Surrounding Alimony

Educate yourself about alimony payments and know your options.

Alimony, maintenance, and spousal support refer to the same thing. Attorneys tend to use the term maintenance, since its purpose is to maintain the receiving spouse’s standard of living for a certain duration of time after the marriage.

The lay public tends to use the term “alimony.”

The maintenance calculation was standardized in January 2016; the way it used to be allocated was less streamlined and too subject to judicial discretion. If there are no children or if the payor is not paying child support, it’s now based on the lowest total of two calculations: 30% of the payor’s income minus 20% of the payee’s income OR 40% of the combined income minus the payee’s income. If child support is also being paid, then it’s the lower of 20% of the payor’s income minus 25% of the payee’s income and 40% of the combined income minus the payee’s income. Agreements must consider how much net income the parties have so the payor is still able to pay his or her own bills and living expenses.

Maintenance is calculated based on adjusted gross income; the money left after Social Security, Medicare, and New York City Tax are paid but before retirement contributions are deducted. Maintenance used to be tax-deductible to the payor and taxable to the payee, but this is no longer the case, which is still causing confusion and disappointment among payors.

Judicial discretion can still be an issue when deciding the duration of maintenance payments. If the marriage lasted up to 15 years, the duration is 15-30% of the length of the marriage; for 15-20 years, it’s 30-40% of the length of the marriage; for a marriage over 20 years, it’s 35-50% of the length of the marriage. There is room for discussion when determining where people should fit in those ranges and even whether there is room to deviate from the ranges altogether. 

Maintenance causes much grief for payors because it’s so difficult to modify. The standard to reduce maintenance is much higher than to reduce child support, and judges can be hard to convince. Some payors would prefer to offer more in child support and less in maintenance, because if their income decreases, they are more likely to be able to reduce the child support payments. This was not the case when maintenance was tax-deductible to the payors. Then, obviously, the payors wanted to beef up their maintenance payments relative to their child support payments, the latter not be tax-deductible then or now. 

One client’s husband negotiated very hard to get language in the agreement that if his income went down, he could get a certain amount of reduction in his maintenance. We did not have to give him that concession, but they wanted to keep it an amicable, uncontested divorce. We created room in the agreements to allow for modification, provided his support would never go below a certain amount. The payee is often afraid because she’s dependent on him continuing to be able to make a certain income.

Another attorney had a client whose ex-husband got fired due to the “Me Too” movement; he’s having a hard time finding new employment, so she can’t get her maintenance. She wants to sue the husband’s former employer for interfering with her separation agreement. In litigation, you go after the person with pockets, and her ex-husband doesn’t have the pockets anymore. Whether or not she has a valid claim, people get desperate; they have bills. 

Alimony recipients have legitimate fears of what might happen if the money suddenly stops flowing. Maintenance payments are sometimes huge, $7,000 – $8,000 a month or more. When a payee’s rent is $8,000 – $9,000, if they suddenly don’t have that money, their whole life could spiral into chaos very, very quickly. 

By law, maintenance ends upon a person’s remarriage. Language is often added to the agreement during negotiation that maintenance ends upon cohabitation with a new romantic partner. A provision that maintenance stops at cohabitation can create fear and resentment in certain cases. 

Let’s say a woman was married for 20-plus years so she’s entitled to maintenance payments for a significant duration. Two and a half years post-divorce, she meets someone that she would like to move in with. She may be afraid to move the relationship forward, because she will be cutting herself off from a tremendous amount of money that she really was entitled to. She invested over 20 years in that other pernicious spouse, standing alongside them, running their household, going to work events with them, but now she’s going to lose that hard-earned income prematurely if she moves in with someone.

Sometimes the divorcing parties just say money is money and they negotiate equitable distribution. This can be favorable to payors because sometimes they can haggle over that lump sum. They have leverage when offering a buyout amount on the maintenance because cash is king. Payors often prefer this option because they won’t have to share future paychecks with their exes. It’s also easier from an emotional standpoint; payors feel they’re just ripping off the band-aid rather than prolonging the agony. 

I recently had a case where the husband really wanted to pay it all upfront and the wife rejected it; she refused, saying, “I want monthly payments.” I actually think based on her circumstances and what she wants in her life, she would do much better with taking the lump sum. But she is not a financially sophisticated woman, and some people with less financial savvy are afraid of getting a lot of money very quickly. Monthly amounts are somehow easier for them to conceptualize. 

When alimony is paid in conjunction with child support, the child support gets adjusted when the alimony duration ends. Sometimes the agreement is written to specify the future adjustment; other times the agreement just states that the parties will adjust the agreement at the time child support is modified. People who prefer to specify feel the whole point of the agreement is to pin things down once and for all, since re-negotiating can be very emotionally burdensome and anxiety-producing. 

The halo of fears surrounding maintenance, for both spouses, can be mitigated by careful attention to these details during the global settlement negotiation. Care and caution now can save future pain! 

Please contact the Law & Mediation Offices of Cheryl Stein with related questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylstein