Spring 2009 Newsletter

Welcome to the Spring 2009 edition of our newsletter.

In this issue we want to wish our law clerk Nolan Hiett good luck as he sets to take the California Bar Examination on February 24, 2009. We know he will do us proud, no matter what the results and look forward to welcoming him back to work shortly, when he will commence again to handle much of the document preparation in our Family Law, Probate and Estates cases.

Please return to our web site periodically to check out in the areas of probate, trusts, conservatorships and family law. We have received very positive feedback from our readers regarding our new and ever-improving web site. At the moment, it has just been refreshed to include up-to-the-minute changes in the law and we have added a new section entitled "What's New at Cooper-Gordon," which should provide much information to the interested public. Please let us know if you have any suggestions for further improvement.

Avery and Frieda continue to mediate and collaborate in various cases in Family Law and Probate areas of practice. Clients wrongly assume that by employing a single mediator, they will be saving money. Sometimes that may prove itself to be true, but usually only when the Parties are coming from a position of More and more people choose alternative methods of dispute resolution to resolve the financial aspects of their dissolution action. However, cost-cutting is not always a good reason to choose ADR. Clients are not usually aware of the fact that even if they are mediating their case, usually, they still must each retain counsel to assist them in reviewing the final agreement and the paperwork and pleadings which are needed to finalize the case. Unless most issues are pre-agreed upon, this method of dispute resolution could be just as costly and take more time than simply litigating the issues to resolution, which usually means a negotiated settlement anyway.

Frieda and Avery both continue to be appointed by the Court to represent children in family law matters as well as proposed conservatees in probate matters. Both areas of law are highly specialized and although often very difficult cases, they usually provide for a highly rewarding practice.

Since it is of interest to our clients and potential clients, this month we want to provide information concerning spousal support. In particular the subject is:

How Different Jurisdictions Consider Calculating Temporary and Permanent Spousal Support.

There are two significant and related problems associated with the setting of spousal support. The first is a lack of consistency resulting in a perception of unfairness. From this flows the second problem, which is an inability to accurately predict an outcome in any given case. This lack of consistency and predictability gives the public little confidence in the judicial system and impedes the settlement of cases. Without a reliable way to predict how much they might get or have in the way of spousal support, clients are in a quandary.

In response to these concerns, many states have adopted a formula used in setting spousal support. While this approach may appear similar to that used to set child support, there are important differences of which people must be aware. Factors for determining spousal support are significantly different than those applicable to setting child support awards. The American Academy of Matrimonial Lawyers Commission recognized these differences in its approach for recommending both the amount and length of spousal support such that it reflects the challenges of arriving at reasonable results in these cases.

The proposed considerations are designed to be used in conjunction with state statutes that first determine eligibility for an award. They are not intended to replace existing state public policy regarding eligibility for an award. In addition, the factors that are listed as deviations are intended to address the considerations for setting an amount and duration of an award found in most states' statutes. These recommendations are ones that the Commission hopes attorneys will utilize in advocating for a fair result for their clients. The Commission further hoped that judicial officers and state legislatures would adopt their approach in order to provide consistent, predicable and fair results.

The current trend is to provide support based on factors that include need, and in some states, fault. However, "need" remains difficult to determine. Is it the marital standard of living? Is it subsistence level? Is it a transfer of money to provide income sufficient to acquire skills or training to become self-supporting? Is it the equitable division of the marital stream of income?

An alternative theory to need-based awards is premised on "contribution." Here, the idea of marriage is one of an economic partnership, which is the theoretical basis for the sharing of the partnership's assets under the custom of equitable distribution. This "sharing" can thus be used as a basis for compensating a spouse for contributions made to the partnership.

The American Law Institute ("ALI") in its "PRINCIPLES" focuses on spousal payments as compensation for economic losses that one of the spouses incurred as a result of the marriage. The ALI guidelines are premised on the fact that when a marriage is dissolved there are usually losses associated with it such as lost employment opportunities or opportunities to acquire education or training in order to increase earning capacity. The ALI takes the position that the partners should share these losses, to the extent they are reflected in a difference in incomes at the time of dissolution. The PRINCIPLES assume a loss of earning capacity when one parent has been the primary care giver of the children. They also make provisions for compensation for losses in short term marriages where sacrifices by one spouse leave that spouse with lower standard of living than he or she enjoyed prior to the marriage. Finally, under the PRINCIPLES, compensation could be awarded based on a loss of a return on an investment in human capital (where one spouse has supported the other through school). This would be most important in the vast majority of states that do not recognize enhanced earning capacity or a degree or license as a divisible marital partnership asset.

While these different approaches to alimony reflected in various states may lead to a disparity in result from state to state, what is more troubling is the tendency to see very disparate results within a jurisdiction where the judges are supposedly applying the same statute. These disparate results have led many jurisdictions to adopt formulas in an effort to provide both consistency and predictability.

The American Academy of Matrimonial Lawyers Commission Recommendations

The AAML Commission studied approaches used in many jurisdictions. While there are certainly many variations, there are two factors that are considerations in virtually all jurisdictions - income of the parties and the length of the marriage. Seeking to provide a formula that Academy members could use regardless of where they practice, the Commission chose to utilize these two universal factors. It should be noted that the application of the proposed AAML considerations yielded results that were comparable to those reached under the majority of approaches adopted in a significant number of jurisdictions.

The AAML Commission recognizes that the amount arrived at may not always reflect the unique circumstances of the parties. Therefore, deviation factors are used to address the more common situations where an adjustment would need to be made.

The recommendations are:

Amount:

Unless one of the deviation factors listed below applies, a spousal support award should be calculated by taking 30% of the payor's gross income minus 20% of the payee's gross income not to exceed 40% of the combined gross income of the parties.

Length:

Unless on of the deviation factors listed below applies, the duration of the award is arrived at my multiplying the length of the marriage by the following factors:

0-3 years, (.3)

3-10 years, (.5)

10-20 years, (.75)

over 20 years, permanent alimony

"Gross Income" is defined by a state's definition of gross income under the child support guidelines, including actual and imputed income.

The spousal support payment is calculated before the child support is determined. This method of spousal support calculation does not apply to cases in which the combined gross income of the parties exceeds $1,000,000 a year.

Deviation factors:

The Following circumstances may require an adjustment to the recommended amount or duration:

A spouse is the primary caretaker of a dependent minor or a disabled adult child;
A spouse is the primary caretaker of a dependent minor or a disabled adult child;
A spouse is complying with court-ordered payment of debts or other obligations (including uninsured or unreimbursed medical expenses);
A spouse has unusual needs;
A spouse has received a disproportionate share of the marital estate;
There are unusual tax consequences;
Other circumstances make application of these considerations inequitable;
The parties have agreed otherwise.

Our firm has handled and continues to handle countless cases involving spousal support. We would be happy to consult with a prospective client regarding their issues pertaining to the receiving or paying of spousal support. We look forward to having the opportunity to answer your questions and provide you with a plan for achieving your desired result in this regard.

Next newsletter, we will discuss options for settlement when the marital estate is upside down.