There are a series of tests to determine if alimony should be awarded in a Florida divorce and, if awarded, what should the amount of alimony be.
The first test is to determine if the parties have the same incomes and assets. While this test is not in the statute, it’s the common practice of Florida divorce lawyers to declare equal income/equal asset partners as ineligible for maintenance.
The test that is in the statute is that “the court shall first make a specific factual determination as to whether either party has an actual need for alimony or maintenance and whether either party has the ability to pay alimony or maintenance.” Fla. Stat. Sec. 61.08(2) I discuss how to evaluate the “need” test at length in this article (insert link)
The next test is to consider the alimony-payor’s ability to pay the alimony that is “needed”. The court looks at both the alimony-payor’s income and the alimony-payor’s assets. Canakaris v. Canakaris, 382 So. 197 (Fla. 1980)
Even if you have income and have assets you can still argue to the court that you do not have the ability to pay the alimony that the court determined is needed.
Income is not be considered exclusively on its own but is to be compared to necessary regular expenses. If the income of the alimony-payor is found not to exceed those necessary regular expenses, the court may find that the alimony-payor has no ability to pay. Many things that seem practical and regular may not be found to be necessary, however. For example, voluntary payments to retirement accounts may not be subtracted from a payor’s income when determining the ability to pay. Melton v. Melton, 79 so. 3d 154 (Fla. 2d DCA 2012)
Assets may be used as a back-up to pay for needed alimony if the alimony-payor’s ability to pay is found to be limited. Boyle v. Boyle, 30 So. 3d 665 (Fla. 5th DCA 2010) The alimony-receiver, however, is not required to dip into their own assets to meet their own needs. “Requiring a wife to deplete her capital assets in order to maintain her standard of living is wrong as a matter of law” Kelly v. Kelly, 925 So. 2d 364 (Fla. 5th DCA 2006).
Of course, income and assets don’t exist in a steady state. Peoples’ incomes often fluctuate, especially if they own their own businesses or work off of commission. Assets as well can rise and fall with the stock markets. Or assets may be intangible or impossible to liquify (like a business or a home). The Florida courts are simply charged with looking at the alimony-payor’s current financial situation to the extent that it can be accurately determined. LaSala v. LaSala, 806 So. 2d 602 (Fla. 4th DCA 2002)
What is the upper limit of alimony? The upper limit is the alimony-receiver’s needs as determined by the court.
What is the upper limit of the alimony-payor’s ability to pay? The upper limit has been as high as 70% of the alimony-payor’s income in some cases. Lambert v. Lambert, 955 So. 2d 35 (Fla. 3d DCA 2007)
Should the alimony-payor lose his or her job or suffer some other financial hardship, the alimony payor may petition the court for a modification of alimony. “An award may be modified or terminated based upon a substantial change in circumstances” Fla. Stat. Sec. 61.08(8). This change must be “permanent” but in reality, nothing is permanent in a person’s financial life. The change must simply not be completely transitory.
Proving to the court that you have suffered a financial hardship is easier said than done. Collier County courts are very familiar with the spouse who suddenly loses his or her job, or whose business suffers coincidentally at the same time that alimony is being considered. In pleading for a downward modification of alimony based on inability to pay, prepare to bring extensive evidence beyond just your paycheck and last year’s tax return. You will certainly need a lawyer for this process to be successful. It is simply too easy to dismiss otherwise.
If you’re in Naples, Florida and you’re going to pay alimony or your spouse is trying to reduce alimony, contact my Naples, Florida law office to learn more about what your options are in your pending or ongoing divorce.