Massachusetts employs a method of increasing the amount of alimony paid if the payor’s gross income increases, such as with a year-end bonus or commission payments, and is done so on as if, or when the added income, is realized. This is a self-modifying provision routinely included in many alimony orders. However, you should be aware of certain limitations to this practice as one recent court noted.
Under the Alimony Reform Act of 2011, the Massachusetts family courts can order 4 different types of alimony to a spouse: General Term, Rehabilitative, Reimbursement and Transitional. The General Term alimony can be the longest with the length of the marriage a key factor as well as whether a spouse is financially dependent on the other. The other types of alimony are short term and apply to marriages of no more than 5 years.
Hassey v. Hassey and the Self-Modifying Clause
In determining the alimony to be paid, the court considers the payor’s current base or guaranteed income and then permits the added alimony but only if and when it is realized. The court in Hassey v, Hassey considered the self-modifying provision in the lower court’s order and determined that although it appeared on the surface to be routine in how the payor would have to increase his alimony payments, the probate court that issued the order left out an important component that caused the matter to be remanded to the lower court.
Hassey was about a dentist who had a base salary of $250,000 at the time of the trial, down from the $360,000 he had made because of debt incurred in renovating his practice, and had testified that these renovations in his practice were expected to yield increased profits for him in the future as his debt gradually decreased. The probate court ordered the doctor to pay a certain monthly sum to his spouse with the provision that 30% of his gross income in excess of $250,000 be paid as well when the added income was realized. The percentage over and above the current gross income was intended to capture a portion of the doctor’s anticipated future income.
The error in the probate court’s order was that it failed to adhere to Massachusetts law and practice of determining the recipient spouse’s need for the increased income as well as the payor’s ability to pay. Dr. Hassey was required under the court order to provide his quarterly earnings while no duty was imposed on his wife to demonstrate her need for more income or that a material change of circumstances existed to justify the additional amount. Indeed, as the appeals court pointed out, the probate court made no determination of just how much the recipient spouse needed to maintain the same lifestyle enjoyed during the marriage.
The Hassey court did not reject a self-executing or self-modifying provision based on the recipient spouse’s needs in awarding general term alimony as a percentage of income, rather than a fixed amount, in special circumstances. Ordinarily, a material change in circumstances is needed to increase or decrease alimony payments.
How the Ruling May Affect You
Alimony is based on need and generally must not exceed 30 to 35% of the difference between the parties’ gross incomes. Deviation from this is permitted but the circumstances supporting it must be sufficiently explained. A self-modifying clause also should be expounded upon so that it satisfies the law’s requirements in all respects regarding the duties and obligations of both parties and the circumstances of each.
Discuss the ramifications of how alimony is to be paid, for how long and in what amount with your divorce lawyer. If the court issues an order with a self-modifying provision, your attorney needs to carefully review it to see if it complies with the factors a court uses in determining the original amount.
Michael F. Mimno is a Massachusetts and Southern New Hampshire divorce lawyer who has been representing the interests of divorce clients in all facets and areas of family law for over 30 years. Contact his office today to discuss your domestic situation.