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The Florida Bar News - February 15, 2013

Alimony bill expected to be a hot topic

By Gary Blankenship
Senior Editor

Participants in one of the most bruising battles from the 2012 Legislature are rearming for the 2013 session.

Bills favored by Florida Alimony Reform (FAR) — which would eliminate permanent alimony among other changes — are being introduced in the Florida Legislature and the Bar’s Family Law Section is preparing to oppose them.

With the approval of the Bar Board of Governors, the section has hired a communications company to help, saying it was outgunned in the public relations arena in 2012, when an alimony overhaul bill passed the House but died in the Senate.

As this News went to press, Rep. Ritch Workman, R-Melbourne, had filed HB 231, which had the wholehearted support of FAR. Sen. Kelli Stargel, R-Lakeland, was expected to file a similar bill in the Senate.

Carin Porras Family Law Section Chair Carin Porras said the disagreement between the section and FAR is a matter of perspective.

“It’s not like FAR is one side and we’re the other side. Their group is basically made up of people who pay alimony and are not happy about that and want to get rid of the obligation. We represent both sides and it’s our job to make sure the laws are fair for people on both sides of that question,” she said.

She also disputed that permanent alimony is a serious problem.

For one thing, “The problem is they keep calling it permanent and it’s really not. While the term may be permanent, what it really is is a long-term alimony that can always be modified if the circumstances are appropriate,” Porras said. “We’ve seen a tremendous amount of them [modifications] in the past three or four years based on folks losing their job, being laid off, or making less money.”

She added, “Eliminating it entirely would be detrimental to the folks out there in need of that type of long-term award. Even though society has changed . . . there are still homes where there are older folks or families where they have made the decision for one person to stay home and care for the children. That affects those persons’ ability at some time in the future to support themselves if those marriages terminate.”

Porras said the section disagrees with the FAR portrayal of Florida’s alimony laws as outmoded or worse. FAR, on its website, says that those laws “reflect attitudes and realities from America in the 1950s, when the divorcing husband was the sole breadwinner and always considered ‘the bad guy’ in divorce, while the wife was considered ‘the helpless victim.’ These antiquated stereotypes still drive much of what happens in the state’s family courts. Because of these laws and attitudes, it is common for healthy, employed women in their 30s and 40s to receive permanent alimony. . . .

“It is not uncommon for people in all circumstances to retrain and reinvent themselves well into their 40s, 50s, and even later. Women now make up half the workforce, and across the economy, women’s wages have increased from 62 percent of men’s wages in 1979 to 80 percent in 2008.”

But Porras said Florida laws are among the most progressive in the nation, having been extensively overhauled in 2010 and 2011. FAR members, however, downplay those changes, she said, adding that many of their members settled their divorces and alimony many years ago under older laws and case law. The new laws need time to see how they work, she said.

Those recent changes recognized that permanent alimony may not be appropriate for moderate-term marriages of seven to 17 years, and so established durational alimony as a tool in addition to rehabilitative, lump sum, short-term, and other alimony options available to the courts, she said.

“There are cases in moderate-term marriages where it should not be necessary or equitable for an award of permanent alimony,” Porras said. Durational alimony “fills the gap and the courts had another tool in their arsenal.”

She also disputed a FAR claim that current alimony laws prevent the paying spouses from retiring because of an inability to reduce alimony payments.

“Retirement is considered a substantial change in circumstance. . . . If you’re not able to pay that, you can go back and get a modification. What FAR wants is for it [an alimony reduction upon retirement] to be automatic,” Porras said. “The problem is there are people who retire from different types of professions, and their income may not decrease at all. They make take another job.”

The court may act if a paying spouse wanted to retire at an early age and sought a reduction that would harm the recipient spouse, she said.

“We have to look at both sides of it. People should be able to retire, but you’ve also got to look at the financial circumstances of the person receiving the alimony,” Porras said. “We could be looking at a bunch of folks who don’t have the ability to support themselves and that’s going to be a problem for the state.”

Many of the critics, Porras said, had divorce settlements years ago under old statutes and case law. Some signed agreements to provide permanent, nonmodifiable alimony and now are unhappy with those contracts.

In addition, Porras said, the bill threatens to upend a system that is working fairly well to address what is a small minority of cases. Alimony, she noted, is paid only if one party can demonstrate a need and the other party has the ability to pay.

“We’re talking about a small number of cases, 95 percent of our cases settle and don’t go to trial at all,” she said.

“Then only in a certain percentage of those is alimony a consideration at all.”

While FAR insists its legislation would reduce legal costs and cut the number of trials, Porras said it would have the opposite effect because HB 231 allows alimony agreements made years ago to be reconsidered under the proposed new law, although in some cases after a wait of up to two years after the July 1, 2013, effective date.

“What they’re proposing, in terms of retroactive modification, would result in additional case filings and litigation and increase the costs,” she said.

“If this were to pass, the courts would be flooded with these folks going back . . . and trying to eliminate their alimony.”

HB 231 would do away with permanent alimony in almost all cases and make other changes. It would create the presumption of no alimony in “short-term” marriages up to 10 years, and there would be no presumption in favor of either party for alimony in “mid-term” marriages of 10 to 20 years. In the latter cases, the party seeking alimony would have to prove the need for alimony by a preponderance of the evidence, and payments would be limited to the lesser of 50 percent of the differences in the spouse’s income or 20 to 30 percent of the paying spouse’s net income, based on the length of the marriage.

Alimony would be presumed as needed on “long-term” marriages of over 20 years, but would be limited to the lesser of 50 percent of the income difference or 33 percent of the paying spouse’s net income. An extra 10 percent could be awarded if the receiving spouse is determined to be disabled under Social Security standards.

The bill also imputes an income to receiving spouses based on past employment and depending how recent that employment is. It would also allow automatic termination of alimony when the paying spouse reaches the “age for full Social Security retirement benefits,” unless the recipient spouse shows the clear and convincing need for continued alimony. Alimony would be reduced when the receiving spouse remarries or enters a “supportive relationship” that improves that spouse’s income. However, if the paying spouse remarries or enters a supportive relationship, assets and income of that partner could not be used to justify an increase in alimony payments.

(Under current statutes and case law, Porras said, the income of a second partner of a paying spouse does not enter into alimony calculations unless the paying spouse has done something like transfer a business into the new partner’s name in order to reduce income available for paying alimony. Alimony also ends when the receiving spouse remarries.)

In the absence of clear and convincing evidence, alimony would be limited to 50 percent of the length of the marriage.

The bill would also limit the ability of a judge to require the paying spouse to obtain life insurance to guarantee alimony payments to “special circumstances,” and even then it would be limited to a decreasing term life policy.

Depending on the length of marriage, those with alimony agreements would be able to file for a modification under the terms of the new law either immediately upon its July 1, 2013, effective date or at the most after July 1, 2015.

Alan Frisher, co-director and spokesman for FAR, said the group is hopeful that the legislation will pass, despite stepped-up opposition from the section.

“The House passed it last year 83-30,” he noted. “This year we’ve already canvassed many senators who have told us of their approval of wanting alimony reform. We’re very hopeful and confident of it passing.”

Porras and Frisher said their organizations have been talking with each other.

“We’ve come to an understanding on certain points, but we are still separated on others,” Frisher said.

“We still have more discussion that must occur. We’re hopeful and I’m thrilled that we’re actually having these discussions.”