When circumstances change following a divorce, such as an ex-spouse loses their job or remarries, spousal support may be subject to modification; however, the court makes many considerations before determining whether or not spousal support can be changed. Laura Schantz, a Beaverton divorce lawyer, discusses various situations that could result in spousal support modification. She also outlines evidence that a person may need to fight their case; types of support support awards that are unmodifiable; and cases where she would advise someone not to seek modification.
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Hosted by: Diana Shepherd, Editorial Director, Divorce Magazine
Guest speaker: Laura Schantz, Family Lawyer & Mediator
For more than 20 years, Laura has helped her clients find creative solutions to complex divorce issues – including child custody and support, spousal support, asset division, and dividing farm property. She is an experienced family lawyer and offers mediation to resolve sensitive issues. For more information about how Laura and her firm can help with your spousal support issues, go to www.oregondivorceattorney.com.
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Read the Transcript of this Podcast Below.
Beaverton Divorce Lawyer Laura Schantz On Spousal Support Modification
Diana Shepherd: What are the main reasons that a party could request a modification of spousal support?
Laura Schantz: Number one, my client comes to me and he’s lost his job, or he had gotten some really good bonuses, commissions, etc., and that’s what spousal support was based upon. And then suddenly, he’s not making those bonuses and commissions and his income’s gone way down. Or he’s self-employed and his business took a hit for some reason and the income’s down. They just come to me because they don’t have the income to continue to pay the spousal support that they were paying before.
Let’s go through some of the factors that could affect a request to modify spousal support. First, what if the recipient remarries or moves in with a romantic partner?
Laura Schantz: Oftentimes I have clients coming to me wanting to terminate or modify their spousal support because their former spouse has remarried or is cohabiting with someone. That’s very tricky because, in Oregon, spousal support doesn’t end automatically when the former spouse remarries. The question is, does the new husband and/or live-in husband provide the same amount of or more income to the family as the spousal support? Has the purpose of the spousal support now been met through this new marriage or this new cohabitation? It’s a more difficult question than you would think, and there are a lot of things that come into it.
As an attorney, when I have a client, normally it’s a man but sometimes it’s a woman, as we have more women paying spousal support now coming to me saying: oh my ex is remarried, let’s get this terminated. It’s just not that simple, and sometimes they’re disappointed to find out that the new spouse is really not bringing that much financial support into the family and, therefore, their spousal support is still needed.
Does any reduction in income constitute a valid reason to seek a modification of spousal support? How could that affect the spousal support?
Laura Schantz: Almost any reduction in income does constitute a valid reason. I think that obviously if you’re just making a few thousand dollars less or maybe $10,000 less, it’s sort of your comfort level and it depends how much you’re paying for spousal support. But $10,000 less could be a huge number if your income was 50,000 and now it’s 40,000; if your income was $200,000 and now it’s $190,000, it may not be a significant difference. It’s sort of the percentage difference that makes it really difficult for you to continue to pay the amount of support that you were ordered to pay.
It’s a case-by-case basis. If you haven’t completely lost your job, if your income is down but it’s not cut in half or something huge like that, then you’re probably going to see a change or a lowering in the spousal support award but not a complete termination. So that’s kind of what you’re looking at – modifying it to make it a lower number but not terminating it completely.
What kinds of factors are taken into account when seeking a modification due to retirement?
Laura Schantz: Retirement is the new hot issue. We have so many baby boomers who are retiring. We just see so much of this coming through our law firm. We have these couples that were typically married for a long time, who had an award of indefinite spousal support, and now one of them is retiring or the paying spouse is retiring, and that person is coming to me saying: well, my support should be terminated now because I’m retiring.
That’s sort of what everybody thought would happen, but that’s not what’s happening 100% of the time. Every retirement is looked at on a case-by-case basis. Especially when you’re looking at spouses that were married for 30 years or more. The court’s going to want to see what each spouse has to live on now that they’re retired. It’s very tricky because, obviously, the assets of the parties are already divided 50/50.
In one sense, what have they done to invest those assets and make them grow into something that could be utilized for their retirement? Let’s say one person wasn’t working and they didn’t add anything to their retirement, and the other person worked for another 10 years after the divorce and added a lot to their retirement. Is it really fair that you’re going to look at both assets and try to figure out what we should do with spousal support?
It doesn’t seem fair, but the judges are looking at what assets each of the spouses have since retirement. How much social security is each spouse going to have as of the date of retirement? Can the spouse that was receiving support continue to live without any spousal support? If she’s really going to have a tough time making it and the other spouse has a lot of assets from which to retire on, a lot of times the judge may continue some amount of spousal support order even after retirement.
If the payor spouse retires but then decides to work part-time at another job after retirement, would the new part-time job be a reason to modify spousal support?
Laura Schantz: There’s always that question: are you really retiring or are you going to be doing something else that’s less stressful or working part-time? That will be something that’s taken into consideration. If there’s still some sort of award of spousal support, the spouse could come back later and say he was going to retire fully but now he decided to get a part-time job and wants spousal support to go up. That could be considered a reason to modify.
If the spouse receiving spousal support gets a job or gets a new higher paying job, could their support be decreased or even eliminated?
Laura Schantz: Oftentimes when a spouse is paying spousal support, it is planned that the spouse receiving support will go back to work. That’s something that’s usually foreseen, that everyone expected. Just the fact that she got a job or is making some decent money, that typically was expected. It’s when that person really knocks the ball out of the park and gets the really great job, is making way more money than was expected, and is just doing really well and is able to be fully self-sufficient. In that case, yes, that would be a reason to request a modification of spousal support.
What is some of the evidence that you would need to prove a case to modify spousal support?
Laura Schantz: We would be looking at all sources of income of both of the parties, especially the spouse that is receiving spousal support. If that spouse has a live-in person or is remarried, we would look at the income provided by that person.
If the payor is remarried or living with someone, it’s not the same; we shouldn’t be looking to that person’s income to pay spousal support. It’s still a very gray area, so you could look at the income or at least the fact that the person is helping pay expenses for the payor spouse, so the payor spouse’s expenses are lower.
We’d even look at retirement assets, savings and investments, real estate, and how much each spouse has to basically live on. Do they have some savings and could they take some money from savings, especially in the retirement cases? We’d be looking at social security income. We’d be looking at a variety of factors about their incomes and really stacking it up on each side, looking at the spouse receiving support. How much does that person have? Regarding the spouse paying support, how much does that person have and how lopsided does it still look or is it starting to look a lot more even?
What are the risks in starting such a case? For instance, is there a risk that a judge could grant the opposite of what you’re requesting: increasing spousal support when you’re asking for it to be decreased?
That’s a very unlikely risk, but it has happened a handful of times. You’re typically not going to see spousal support increase unless one spouse has become severely disabled and we expected that she would be able to go back to work but she didn’t because of her disability. Or she had a plan she was going to get a degree and become a teacher but then she got out of school and there were absolutely no jobs for teachers, so she didn’t get the job she thought she was going to get.
Some really extreme factor like that where the plan didn’t work out and they were not able to make the kind of money contemplated might be a reason to increase the spousal support. It’s very unlikely that when you file a case to modify spousal support for a real reason – like you lost your job, your income’s gone down, you’re retiring, or your spouse has remarried – the opposite occurs.
When seeking a modification, does each spouse pay their own attorney fees or could the person who loses the case have to pay the other’s attorney’s fees as well?
Laura Schantz: I think this is one of the biggest risks of bringing these types of cases. A judge does not have to modify or terminate spousal support. It’s a case-by-case decision, it’s up to the judge’s discretion. The biggest thing that your client has to lose by bringing forward one of these cases is: a) Their own attorney fees, which can be very expensive, and if you spend a lot of money trying to terminate spousal support and you don’t succeed, then you’ve lost any attorney fees that you’ve spent. b) If you lose and the other side had to pay a lot of money for their attorney fees for no reason when they won. This is a case where a judge might consider awarding attorney fees to that other person and the client would have to pay their attorney fees as well as your own. That’s a scenario that I absolutely do not want my clients to ever face and luckily have not had that happen.
That means that there have been times when I’ve gone down the road towards seeking a modification of spousal support, and when it really turned out that the facts didn’t line up the way my client thought they would, I have really thought of stopping the case and ending it to avoid the possibility that my client would have to pay the other side’s attorney fees.
When would you advise someone not to seek a modification?
Laura Schantz: It’s exactly like I just said in that case. I’m very concerned about having to pay the other side’s attorney fees, very concerned about paying a lot of attorney fees to me if my client is not going to prevail. I do not want my client to go through this process, which is very risky unless there’s a very strong chance that my client is going to win.
I’ve had several clients come to me recently where I’ve said this is not the right time, let’s wait. These are cases where my client hasn’t retired yet, is thinking of retiring, or has retired but maybe is still getting some benefit from the business that they sold or something else where their income is just off the charts. The other side is just barely making it. In that case, I know that they’re going to be looked at, the judge is going to have the sympathy factor for the huge discrepancy in incomes or assets that are available to support each person. If it’s just such a gigantic discrepancy, even though it seems like there should be a termination and this person’s income has gone down, I still would tell that client that I just don’t see a strong enough chance that would be worth taking that risk. We wait until it’s the right time and I’m just looking for having all the factors lined up.
Other things I’ve done is take the deposition of the new husband or the new live-in partner and look at how much this person is really earning. Either it’s good, they’re really earning some good money that could take the place of the spousal support, or you find out no, they’re not really earning that much money, it’s not going to be enough to take the place of the spousal support. In that case, we shouldn’t go forward because we’re not going to prevail and the risks are too great.
Are there any spousal support awards that are unmodifiable?
Laura Schantz: In Oregon, we use the word “compensatory spousal support,” which is a special statutory factor basically stating that you are giving me the spousal support to compensate me for the fact that I worked while you were in medical school. When you got out of medical school and got your first job, you divorced me and I never got to get the benefit of that degree that you got, so you have to compensate me with this certain amount of spousal support.
If that word is written into a spousal support order in Oregon, it is very, very difficult to modify that amount in the person’s life. That part of the spousal support or the part that’s compensatory must be paid. There are other times when the parties will agree in the judgment where it’s an order of the court that this spousal support is not modifiable, or they’ll say it’s only modifiable under these circumstances. They’ll list some very specific reasons where it could be modified, or they’ll list reasons why it could not be modified.
There are a lot of unique ways you can craft a judgment if both parties agree to it to make spousal support not modifiable. Obviously, the risk for the person who agrees to that, who’s the paying person, is that, let’s say they lose their job or they become disabled or something really bad happens and they still have to pay this amount of money, they’re going to have to really think twice before they would agree to a non-modifiable amount of support.
For the other person, they might agree to nonmodifiable support and maybe they agree to a lesser number or they’ve given something up in exchange for knowing this support is going to happen no matter what.
Want to read more by Laura Schantz? Read on up Preparing for a Child Custody Case.
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