Legal Lesson - Modifying Alimony Upon Retirement

ABSTRACT: Modifying alimony requires the moving party to demonstrate the following: 1) A substantial change in circumstances, 2) The change was not contemplated at the time of dissolution, and 3) The Change is sufficient, material, involuntary, and permanent in nature. Voluntary retirement may be considered together with other relevant factors and law to modify alimony, specifically the court must inquire into the reasonableness of the retirement. Additionally, Courts can consider the vesting of retirement benefits as income and evaluate the effect on the need and ability to pay alimony. However, a Court cannot order an automatic modification  in alimony when retirement assets vests. The Court cannot make speculative rulings to future need/ability to pay.

Relevant  Statute:  §61.14, Florida Statues

Section 61.14(1)(a), Florida Statutes, states in relevant part, that  when a party agrees to make payments for alimony or has been ordered by the Court to make such payments, and the “circumstances or the financial ability of either party changes,”  either party apply for: “an order decreasing or increasing the amount of … alimony, and the court has jurisdiction to make orders as equity requires, with due regard to the changed circumstances or the financial ability of the parties… [when] decreasing, increasing, or confirming the amount …alimony provided for in the agreement or order.”

What is the standard for modifying alimony?

If a party wishes to modify alimony, they must demonstrate:
    1. A substantial change in circumstances,
    1. The change was not contemplated at the time of dissolution,
    1. And  the change is sufficient, material, involuntary, and permanent in nature. See,  Pimm v. Pimm, 601 So.2d 534, 536 (Fla. 1992)
Does a voluntary retirement preclude one from seeking a Modification?

No, the court cannot preclude retirement, but the choice to retire must be put into context. Section 61.14(1)(a) empowers the court to give due regard to changed circumstances or the financial abilities of the parties. This broad language allows the court to look at the total circumstances of the parties’ reduction in income, and consequently, the court will inquire into the reasonableness of voluntary retirement. “In determining whether a voluntary retirement is reasonable, the court must consider the payor’s age, health, and motivation fore retirement, as well as the type of work the payor performs and the age which others engaged in that line of work normally retire.” Pimm, 601 So.2d at 537.

When may a voluntary retirement be precluded for consideration in  modification of alimony?

If the parties make an agreement that forecloses on the possibility of modification, or if the agreement/judgment has a showing that the parties’ future retirement was contemplated in fashioning alimony,  then the court will likely not consider retirement in the overall total circumstances warranting a modification. The lesson is: A. Don’t agree to make permanent alimony non-modifiable , unless your client is getting a steal and is willing to take the risk. B. Be careful when crafting settlement agreements concerning alimony.

Is an alimony agreement more difficult to modify than a judgment?

Yes. “where the alimony sought to be modified was… set by the court upon an agreement of the parties, the party who seeks a change carries a heavier than usual burden of proof.” Tinsley v. Tinsley, 502 So.2d 997, 998 (2nd DCA 1987).

Can a former spouse seek to modify alimony when the parties begin receiving retirement benefits through equitable distribution?

Yes. Either the payor or payee may move to modify alimony once retirement benefits begin to vest. See, Acker v. Acker, 904 So.2d 384 (Fla. 2005). Even though an agreement or final judgment disposed of the retirement benefits through equitable distribution, the benefits are nevertheless income to each party and relevant to an ongoing need vs. ability to pay inquiry. So, in Acker, the court properly considered the payor spouse’s substantially increased pension benefit in its determination to deny his supplemental petition to modify alimony. This ruling cuts both ways: if the payee spouse begins to receive pension benefits that greatly increase the payee’s monthly income,  this may be considered in decreasing an alimony obligation. Acker consistent with Pimm – i.e. the Court holds that the certitude of retirement benefits, like a pension,  will not automatically undermine a finding of non-contemplated change if the parties’ financial circumstances have nonetheless changed.

Can the Court order an automatic modification in alimony in anticipation of retirement?

No, the Court abuses its discretion if it attempts to automatically modify alimony in the event of event of one party’s retirement. See, Pombrio v. Pombrio, 29 So.3d 1208 (1st DCA 2010). The Court cannot generally award prospective relief because it would be speculative. Even though, it is clear that the payor spouse’s income will alter upon retirement, this is one limited fact and it does not preclude other sources of income that may become available justifying a contemporaneous inquiry.

By Kenny Leigh

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