New Spousal Maintenance Statute
May 2016 | Alison Leigh Epilone, Esq.On September 25, 2015, New York State Governor Andrew Cuomo signed the “new” Maintenance Law (Assembly Bill A7645-2015), which was passed in both houses of the New York State Legislature in June 2015.
This law not only revised the Temporary Maintenance provisions originally enacted in 2010, but now provides a formula for post-divorce maintenance – which replaces the traditional need-based analysis previously used.
The other significant revision of Domestic Relations Law Section 236 is the amendment of DRL § 236(B)(6)(d)(7), which now provides the following: “The Court shall not consider as marital property subject to distribution the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or enhancement. However, in arriving at an equitable distribution of marital property, the court shall consider the direct or indirect contributions to the development during the marriage of the enhanced earning capacity of the other spouse.”
While it seems that DRL § 236(B)(6)(d)(7) “overturns” O’Brien v. O’Brien, 66 N.Y.2d 576 (1985), which previously defined and equitably distributed “enhanced earning capacity” as a marital asset, the second half of DRL § 236(B)(6)(d)(7) seems to contemplate that enhanced earning capacity would still need to be valued.
The other change was the significant reduction of the income cap when using the maintenance formula from $543,000 to $175,000. However, an opt-out provision still remains for income above the statutory cap.
DRL § 236(B) provides two methods in determining both temporary and post-divorce maintenance. The first is where child support will be paid and where the maintenance payor is also the child support payor. The second is where child support will not be paid or where the maintenance payor is the child support payee.
The following is a simplified version of the methodology provided for in DRL § 236(B) where child support will be paid by the maintenance payor:
1. Subtract 25% of the maintenance payee’s income from 20% of the maintenance payor’s income.
2. Multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result.
3. The lower of the two amounts will be the guideline amount of maintenance.
The following is a simplified version of the methodology provided for in DRL § 236(B) where child support will NOT be paid or where the maintenance payor is the recipient of child support:
1. Subtract 20% of the maintenance payee’s income from 30% of the maintenance payor’s income.
2. Multiply the sum of maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result.
3. The lower of the two amounts will be the guideline amount of maintenance.
In both of the above formulas, where the guideline amount is zero or less than zero, there will be no award of maintenance, temporary or post-divorce.
The new law also provides a schedule on the duration of post-divorce maintenance award, as follows:
This law not only revised the Temporary Maintenance provisions originally enacted in 2010, but now provides a formula for post-divorce maintenance – which replaces the traditional need-based analysis previously used.
The other significant revision of Domestic Relations Law Section 236 is the amendment of DRL § 236(B)(6)(d)(7), which now provides the following: “The Court shall not consider as marital property subject to distribution the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or enhancement. However, in arriving at an equitable distribution of marital property, the court shall consider the direct or indirect contributions to the development during the marriage of the enhanced earning capacity of the other spouse.”
While it seems that DRL § 236(B)(6)(d)(7) “overturns” O’Brien v. O’Brien, 66 N.Y.2d 576 (1985), which previously defined and equitably distributed “enhanced earning capacity” as a marital asset, the second half of DRL § 236(B)(6)(d)(7) seems to contemplate that enhanced earning capacity would still need to be valued.
The other change was the significant reduction of the income cap when using the maintenance formula from $543,000 to $175,000. However, an opt-out provision still remains for income above the statutory cap.
DRL § 236(B) provides two methods in determining both temporary and post-divorce maintenance. The first is where child support will be paid and where the maintenance payor is also the child support payor. The second is where child support will not be paid or where the maintenance payor is the child support payee.
The following is a simplified version of the methodology provided for in DRL § 236(B) where child support will be paid by the maintenance payor:
1. Subtract 25% of the maintenance payee’s income from 20% of the maintenance payor’s income.
2. Multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result.
3. The lower of the two amounts will be the guideline amount of maintenance.
The following is a simplified version of the methodology provided for in DRL § 236(B) where child support will NOT be paid or where the maintenance payor is the recipient of child support:
1. Subtract 20% of the maintenance payee’s income from 30% of the maintenance payor’s income.
2. Multiply the sum of maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result.
3. The lower of the two amounts will be the guideline amount of maintenance.
In both of the above formulas, where the guideline amount is zero or less than zero, there will be no award of maintenance, temporary or post-divorce.
The new law also provides a schedule on the duration of post-divorce maintenance award, as follows:
- 0 to 15 years of marriage, the duration will be 15% to 30% of the length of marriage
- 15 to 20 years of marriage, the duration will be 30% to 40% of the length of marriage
- More than 20 years of marriage, the duration will be 35% to 50% of the length of marriage.
The foregoing will replace the old “one third unwritten rule,” where the duration of maintenance was “one year for every three years of marriage.”
Determining the “right” amount of maintenance and the duration was always somewhat of a guessing game for attorneys and judges in the past, so hopefully the new statute will help cases resolve quicker and alleviate unnecessary counsel fees for the parties.
The temporary maintenance provision became effective on October 25, 2015 and the balance of the new law goes into effect for cases filed after January 23, 2016. If you are contemplating divorce, now would be the time to decide which statute (the old or new maintenance and/or old or new enhanced earning capacity provision) would benefit you.
Please contact your Legal Service Plan’s National Legal Office if you have any questions or concerns about this topic.
Sources:
1. New York State Domestic Relations Law § 236B
2. “Maintenance Legislation – Parsed for Perspicuity” by Timothy M. Tippins, Esq., MatLaw Systems Corp., 138 LeBarron Road, Hoosick Falls, NY 12090
Determining the “right” amount of maintenance and the duration was always somewhat of a guessing game for attorneys and judges in the past, so hopefully the new statute will help cases resolve quicker and alleviate unnecessary counsel fees for the parties.
The temporary maintenance provision became effective on October 25, 2015 and the balance of the new law goes into effect for cases filed after January 23, 2016. If you are contemplating divorce, now would be the time to decide which statute (the old or new maintenance and/or old or new enhanced earning capacity provision) would benefit you.
Please contact your Legal Service Plan’s National Legal Office if you have any questions or concerns about this topic.
Sources:
1. New York State Domestic Relations Law § 236B
2. “Maintenance Legislation – Parsed for Perspicuity” by Timothy M. Tippins, Esq., MatLaw Systems Corp., 138 LeBarron Road, Hoosick Falls, NY 12090