Governor Cuomo Signs Into Law Spousal Maintenance Guidelines

Governor Cuomo Signs Into Law Spousal Maintenance Guidelines

New York Law Journal, Joel Stashenko  – ALBANY – Significant revisions will take effect in October in calculating pre- and post-judgment maintenance payments when spouses divorce in New York.

Gov. Andrew Cuomo has signed into law a bill (A7645/S5678) that represents the culmination of a spousal maintenance review that started in 2010, when New York became the last state in the country to adopt a no-fault grounds for divorce. At that time, legislative sponsors of no-fault divorce said they had cobbled together a last-minute compromise on maintenance and would circle back to make improvements in the coming years.

State Supreme Court Justice Jeffrey Sunshine, chair of the Matrimonial Practice Advisory and Rules Committee to the state’s chief administrative judge, said the new maintenance procedures developed by his panel­—and negotiated among stakeholders in the bar, the courts, the Legislature and among advocates for low-income women—represent those refinements.

The new amendments to §236 of the Domestic Relations Law will:

• Adopt a formula for post-divorce maintenance for the first time; the courts previously determined it on a discretionary basis.

• Establish a $175,000 income cap for applying formulas to determine maintenance payments, down from the $524,000 under the 2010 law. The amount of the cap will be adjusted according to Consumer Price Index fluctuations.

• Create separate formulas for determining maintenance by imposing a lower payment burden to the “monied” partner if he or she is the non-custodial parent already paying child support to the ex-spouse/custodial parent. In that case, formulas will reflect deductions in the maintenance payments.

• Give courts enhanced discretion to deviate from the guideline amounts to correct maintenance totals and allow judges to determine what would be “unjust” or “inappropriate” according to individual cases.

• Eliminate the concept of enhanced earning capacity as a marital asset in equitable distribution, effectively undoing the 1985 Court of Appeals ruling in O’Brien v. O’Brien, 66 NY2d 576. Judges have long complained that trying to put a value on intangibles­—the worth of an advanced academic degree that one spouse earned while the other worked to support the family, for instance—has been both difficult and often delayed the adjudication of divorce petitions.

• Tie the length of the post-divorce maintenance obligation to the duration of the marriage.

• Specify that both pre-judgment and post-judgment maintenance payments end upon the death or re-marriage of the “non-monied” ex-spouse.

• Allow judges to rule from the bench, without putting every decision into writing, when they are deviating from the guidelines.

The portions of the new law pertaining to temporary maintenance will take effect Oct. 26; changes to permanent maintenance calculations will take effect on Jan. 25.

State Sen. John Bonacic, R-Mount Hope, who sponsored the bill in the Senate, said setting the new, lower income cap will allow about 95 percent of the wage earners in New York state to be included under the new maintenance guidelines.

Sunshine said the legislation achieves the advisory committee’s goal of creating guidelines that courts can apply to set pre- and post-judgment maintenance in most divorces, but allows flexibility that judges said they lost under the 2010 law to deviate from formulas according to the unique circumstances of couples’ situations.

That is especially crucial, he said, because there are wide regional differences in income in the state, and judges need discretion to fairly decide maintenance and asset allocation questions.

A Five-Year Effort

The seeds of the new statute were sown in the landmark bill approved by the Legislature in 2010 and signed by then-governor David Paterson establishing “no-fault” divorce in New York (NYLJ, Aug. 17, 2010).

At the time, sponsors conceded that the system of awarding both temporary and permanent maintenance in divorce actions would disadvantage the non-monied spouse.

As part of that 2010 bill, the Law Revision Commission was ordered to study how the maintenance formulas established five years ago worked. The 2013 study recommended setting maintenance formulas according to a far lower cap of a couple’s combined gross adjusted income than that set in the 2010 bill. The commission recommended caps at the same levels as those used for determining child support payments (NYLJ, May 20, 2013).

But it was the failed attempt to rework the maintenance system in 2014 that shaped the successful 2015 legislation, Sunshine said.

Last year’s bill, which was not voted on by either house of the Legislature, would have cut the income cap to $200,000 for pre- and post-judgment maintenance, but did not contain the provisions of the 2015 legislation enhancing judicial discretion or eliminating enhanced earning capacity.

The 2014 bill was opposed by the Family Law Section of the New York State Bar Association, the American Academy of Matrimonial Lawyers and the New York Women’s Bar Association (NYLJ, July 7, 2014).

This year, Sunshine said, he formed an ad hoc advisory panel to take those groups’ concerns into account.

Those on the advisory panel were two representatives of the state bar’s Family Law Section, Alton Abramowitz and Eric Tepper; Sandra Rivera and Michelle Haskin, representing the state Women’s Bar Association; Elena Karabatos, representing the New York Chapter of the American Academy of Matrimonial Lawyers; and Emily Ruben and Kate Wurmfeld, representing the New York State Maintenance Standards Coalition.

Ruben, formerly an attorney-in-charge for civil practice in Brooklyn for the Legal Aid Society, has been appointed as a Family Court judge in Queens by Mayor Bill de Blasio.

The proposed bill was endorsed by the Matrimonial Practice Advisory and Rules Committee of the state courts, and the Office of Court Administration lobbied for its passage along with other items on its 2015 legislative agenda.

The bill was approved on June 15 by a 146-1 vote in the Assembly, where it was sponsored by Helene Weinstein, D-Brooklyn, and 60-0 by the Senate on June 24. Cuomo signed it into law on Sept. 25.

Sunshine said that of the 5 or 6 percent of divorces whose maintenance awards will not be covered by the new statute, the vast majority involve high-income couples whose complex finances would lead to lengthy litigation without income caps and other provisions in A7645/S5678.

Abramowitz called his work on the advisory panel “one of the most significant things that I have done in my 43 years in the law.”

“There was no rancor, no disharmony,” he said. “People listened to one another and heard what was being said.”

Abramowitz said domestic violence victims who are going through divorces may find beneficial the application of the same rules for pre- and post-judgment maintenance by courts.

“Absent reasons to deviate from the guidelines, the courts are going to follow this formula,” said Abramowitz, a matrimonial law columnist for the New York Law Journal. “Therefore … the victim of domestic violence is not going to be viewed by the perpetrator of domestic violence as having imposed the requirement on them. The state has done so. The guy next door who did nothing is going to be treated the same way financially.”

He added, “It is going to make the process more streamlined, enable the courts to become more current on their caseloads and remove some of the controversy.”

The 2015 legislation also used some concepts advanced by the Law Revision Commission and recommendations from other sources. Abramowitz said, for instance, that the two-tier approach for determining maintenance, one for families with minor children and the other for families without children, grew out of a method in use in Canada.

Tepper praised the way Sunshine brought together disparate groups within the matrimonial and family bar to negotiate the legislation and was enthusiastic about the effect of eliminating enhanced earning capacity.

“The whole concept of dividing an intangible asset has plagued the courts for years and made cases very difficult to settle,” he said.

There are approximately 50,000 divorces each year in New York.