Modifying an Alimony Award When the Paying Spouse Retires

How Does a Court Decide if an Alimony Award Should be Modified when A Spouse Retires?

Alimony termination because of retirement.
Does alimony constitute a material change in circumstances for purposes of modification?

In 1975 Ronald and Paula Ann got married. Twenty-four years later they separated and a lengthy divorce action ensued. It wasn’t until 2008 that the divorce was finalized by way of a settlement agreement between the spouses. Part of that agreement was that Paula Ann would pay Ronald alimony for the length of the marriage – 32 years. As part of the settlement, the parties agreed that alimony would terminate based on a material change in circumstances, including retirement.

A few years went by and Paula Ann decided to retire. It was not an early retirement. Paula sought to modify the divorce decree to terminate her alimony obligation. The court agreed that Paula Ann’s retirement constituted the grounds to terminate the alimony payment. Ronald was not happy to lose his alimony and appealed.

On appeal, the court reiterated that modifications of divorce decrees including of a spousal support requirement are permitted for a substantial material change in circumstances not foreseeable at the time of the divorce. The court found that although the Paula Ann’s retirement was certainly foreseeable, the specific language of the divorce decree permitted for a modification based on retirement. Thus it found that modification was appropriate. The analysis, however, did not stop there.

The court then looked at the following factors:  (i) the financial condition and needs of the recipient spouse; (ii) the recipient’s earning capacity or ability to produce income; (iii) the ability of the payor spouse to provide support; and (iv) the length of the marriage. The court analyzed the facts under each of these prongs and found that the trial court appropriate determined that Ronald did not have unmet financial needs, and therefore, Paula Ann could no longer be required to pay alimony.

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