Can spousal support be modified? Yes. In Oregon, spousal support is modifiable. The party seeking the change must show a  substantial, unanticipated change in economic circumstances. You can agree to make spousal support non-modifiable in your divorce judgment, but your divorce judgment must contain a specific waiver of your right to modify support. The reason the court awarded support has a lot to do with how the court will view a motion to modify.

Can spousal support be increased? Yes, but courts generally don’t increase spousal support awards absent extraordinary circumstances, like an ex spouse getting sick or becoming disabled.

Can spousal support payments be reduced? Yes, if the moving party can show a substantial, unanticipated change in their finances.  For example, if the paying ex spouse looses their job, the court may reduce support. Also, if the ex spouse receiving support increases their income, the court may also reduce support.

Can the duration of spousal support be extended or reduced? Yes, if the reason spousal support was awarded no longer exists. For example, if support is ordered to ease a spouse’s transition into the workforce, and they get a good job, support may no loner be necessary, or may be stopped altogether.  Also, if an ex spouse is not yet self sufficient and support is set to terminate, the court may extend the duration of support.

Can spousal support be reinstated after it stops? Yes, if the reason for the termination ceases to exist, and the motion to reinstate is filed during the original duration of the support award.

The above is an overview, and a careful analysis of  your finances, judgment and case  is critical defending or requesting a change in spousal support.   If you have questions about your spousal support rights or obligations and are thinking of modifying, you should talk to an experienced family law attorney about your support award.

The person paying spousal support should:

• Make a detailed spreadsheet which lists all payments made.  The method of payment, check number, date, and the address to which the check was sent or direct deposit made should all be listed.  In addition, a copy of the outgoing payment should be kept;
• If payments are going to be made in cash, then the payee should sign a receipt at the time payment is accepted. 

The person receiving support should:

• Make a detailed spreadsheet which lists all payments received.  Including, the date the payment was received, the amount received, the check number or electronic payment record, the bank and account from which the payment was made.
• In addition, a copy of the payment should be kept.

Both parties should be aware of the tax impact of spousal support payment or receipt and should discuss how to appropriately deal with tax issues with his/her CPA.  You should contact a lawyer if you have any questions about your current spousal support award.

On August 5, 2009, the Court of Appeals ruled in the case of Morales and Morales, in which the court modifies the trial court’s ruling with respect to spousal support based upon the wife’s appeal.

Husband and Wife married when he was 22 and she was 17.  Their marriage lasted for over 35 years.  Wife raised the parties’ children, never working outside the home, while Husband served in the army.  Husband retired from the army in 1992, after 20 years of service, for medical reasons. 

Wife was awarded $2,000 per month in support at a temporary hearing, in order to cover joint family expenses along with her own individual expenses.  At the hearing, the trial court imputed minimum wage income to wife and advised her to obtain a job.

At the time of trial, husband’s income totaled approximately $5,200 after subtracting taxes and payment for his child’s health insurance.  His income included $3,210 in nontaxable disability payments.  Wife had attempted to find a job, but was still unemployed.  The trial court awarded wife spousal support in the amount of $1,000 per month for one year, $800 per month for two years, and then $500 per month indefinitely.  The court imputed minimum wage income to wife and made a ruling that the nontaxable disability income for husband could not be divided by the court.

On appeal, wife argues that the award of $500 per month is inequitable and husband counters that the award is appropriate based upon husband’s non-disability income. 

The court of appeals explains that husband’s nontaxable disability income is in to be considered income for support purposes, regardless of whether it can be divided as part of a property distribution.  Oregon law defines “income” for purposes of support payments, as, among other things, “any program or contract to provide substitute wages during times of unemployment or disability.”  ORS 25.010(7)(f); see also OAR 137-050-0340 (for purposes of support, “gross income includes income from any source including, but not limited to * * * disability insurance benefits” (emphasis added)).  In addition, the court held that federal law does not restrict the court’s ability to consider the disability payments as income. 

The court of appeals then goes on to consider what amount of support is “just and equitable.”  Based on the length of the parties marriage, the parties’ respective situations, and the parties’ respective incomes or ability to obtain employment, the court of appeals held that wife should be awarded an amount of $1,400 per month indefinitely. 

The entire opinion can be viewed here:  http://www.publications.ojd.state.or.us/A134242.htm
The lawyers at Stephens Margolin P.C. can assist you with your family law appellate questions. If you have any questions about Oregon appellate law please contact Daniel Margolin, who focuses part of his practice on family law appeals, or C. Sean Stephens at Stephens Margolin P.C.

Using the software allows us to both provide a detailed and visual example of what is really happening to a family’s finances.  This is helpful to the client in that it provides a clear way to understand what is happening in the case both in the short term and over time.  In the short term, working with the client and thr program we can fine tune how the division of assets can be made in teh best way for our client.  In the long term, they can see how the division and the payment or receipt of support will affect their financial picture.  The program’s data can be used by a financial specialist for both testimony purposes and to help a client with financial planning.  Lastly, and importantly, the data can provide the court with a very clear understanding of our client’s position on the issues.  It is rare for opposing counsel to use comparable charts and the ease of access to the information can help to sway the court towards our client’s position.

Stephens Margolin PC is committed to the use of technology to assist our client’s in all factes of their case.  Please contact the firm to find out how we can use Family Law Software to benefit you.

There are two important things to note when attempting to modify support, whether as the party paying support, or the party receiving support. The first is this: courts can only make support modifications retroactive to the filing of a motion to modify support. In other words, if your suffering to make support payments, taking action sooner rather than later is extremely important. Next, for those who are receiving support, if circumstances haven’t panned as anticipated at the time of dissolution, your right to modify support expires when the support obligation is over. In other words, you must move to modify (either to extend the duration of support, or to modify the amount, or both) before the time when your right to receive support under the original judgment has passed.

There are a number of considerations which go into any request to modify spousal support. This blog is specific to the current recession. It must be remembered that a decrease in income, or the inability to find a job, is but one consideration among potentially many others in a modification case. Nevertheless, it may well be an important consideration. There aren’t many people who anticipated the current economic downturn. If the payment of support under a judgment drafted when things were good has become near impossible, or if the support being paid under an old judgment has proven inadequate, then you may need help to modify the situation. If you are like the “regular guy” who I overheard while watching basketball, you shouldn’t feel bad about circumstances that may be out of your control. Spousal support is not meant to be a punishment (though it may seem that way to some). It is not meant to leave a party with no resources. If the economy has caused an impossible situation for you, whether you are paying or receiving support, you may want to contact an attorney to see what can be done about it.

If you would like more information on spousal support modification, please contact Stephens Margolin P.C. in order to schedule a consultation.

Please view parts 1 and 2 of this post:  Part 1 (http://oregondivorceblog.com/wordpress/?p=404); Part 2 (http://oregondivorceblog.com/wordpress/?p=407)

Now, in 2009, the hypothetical situation to which the Oregon Court of Appeals referred back in 1998, has become familiar to many people; that is, most experts believe that the current economic downturn is something more than just a temporary occurrence. Whereas once courts may have been reticent to find that a decrease in a person’s income, or even the loss of a job, was something other than a temporary occurrence, courts now, like the rest of our society, have become more sensitive to the unfortunate realities with which many people are currently faced. Judges read the papers and listen to the news just like the rest of us; they are aware that things are tough, and they are not insensitive to alleviating difficult or impossible situations.

When a court finds that there has been a change of circumstances sufficient to warrant reconsideration of an existing order of support, the court takes into account the original purpose of the award. Judgments are often vague as to the purpose of a spousal support award. In making a spousal support award, courts are directed by statute to designate one or more categories in which the support award falls. Spousal support can be deemed maintenance support, transitional support and/or compensatory support. Some combination of maintenance and transitional support are often awarded in long term marriages, whereas transitional support by itself is often awarded in shorter marriages. Compensatory support is only awarded as the result of very specific fact patterns, and will not be addressed here. Without going into too much detail regarding the difference between the other categories of spousal support, one of the primary reasons behind an award of maintenance and/or transitional spousal support is to enable the parties to live separately at a standard of living “not overly disproportionate” to the one they enjoyed when they were together. Interestingly, as a result of the recent economic downturn, the standard of living of the party receiving spousal support has, in many instances, become overly disproportionate to the party paying it. This is not surprising when you think about it. If the amount of support originally ordered to keeps things “not overly disproportionate” between the parties remains constant, but the payer’s income decreases substantially, then the amount originally ordered will no longer place the parties in a “not overly disproportionate” position to one another. Thus, the original purpose behind the award is no longer being met, and a court would presumably “adjust” the award to maintain its original purpose. This was essentially the logic behind a 1999 Court of Appeals case where the Court found that it was not originally anticipated that the husband would have to draw upon his retirement account to fund his spousal support obligation. In other words, the Court of Appeals held that when a party’s circumstances have changed to the point where his/her continued payment of support would drive that party to the “poorhouse”, the purpose of that support award was no longer being met, and modification would be justified.

The “not overly disproportionate” language can be viewed as another way of saying that the purpose behind many spousal support awards is to make up for the disparity of the parties’ earning capacities at the time of dissolution. Whether the support is deemed maintenance, transitional, or both, courts will often consider this factor when determining the amount, if not the duration, of an award. When the substantial purpose behind an award is to make up for the disparity of the parties’ earning capacities, and no other express reason is provided, the Court of Appeals determined in 1987, that, upon a showing of a substantial change in circumstances, the task of the court is to maintain the “relative positions of the parties as established in the initial decree in light of the changed circumstances.” The Court of Appeals affirmed it’s 1987 decision in more recent cases, finding in 2002 that it would be just and equitable to reduce spousal support to “preserve the overall percentage division of income” between the parties provided by an initial award, and in 2003 modifying a support award due to a party’s decrease in earnings to an amount equal to the “same proportionate share” of the parties’ total income as the original award.

Please continue to Part 3 of this post:  http://oregondivorceblog.com/wordpress/?p=409

“I don’t know what to do… I won’t be able to make my spousal support payment this month… I feel horrible.” The man who spoke these words was well-dressed, middle-aged and an obvious sports fan. By all accounts, he was a “regular guy.” This does not surprise me, because if there is one near constant among family law matters it is this: folks don’t like paying spousal support.

The payment of any monthly obligation can be tedious; keeping up with consumer obligations (paying high interest credit cards), or even providing for more basic needs (paying the mortgage), is a dreary process which is constantly eating away at our disposable income. Nevertheless, whereas we have presumably derived some benefit from accruing consumer debt (e.g., the purchase of new clothes, an automobile, vacation, etc), and whereas we derive current and future benefits by making our monthly mortgage payment, there does not appear to be any comparable benefit derived from the payment of spousal support. This seemingly thankless obligation, coupled with the probability that the person to whom this obligation is owed is often someone who we may not particularly like very much, can make the payment of spousal support particularly loathsome.

And so this is exactly what struck me about the comment made by this “regular guy.” I got to thinking that, perhaps, for some, once the obligation to pay support has “sunk in”, and after the pain and hurt feelings associated with divorce have passed, the payment of spousal support may appear different to the person paying it then it once did. Perhaps the notion of helping out a former (or maybe even a current) loved one starts to feel pretty good.

The economy is clearly in bad shape and the downturn has affected everyone. While many companies are trying to avoid lay-offs by reducing employee salaries, other employers are having to take more drastic measures. For some, this means lay-offs and severance packages. For others, it means unemployment checks. Whatever the situation, for many, the economic downturn means a decrease in income.

Please continue to parts 2 and 3 of this post:  Part 2 (http://oregondivorceblog.com/wordpress/?p=407); Part 3 (http://oregondivorceblog.com/wordpress/?p=409)

On April 23, 2008, the Oregon Court of Appeals published an opinion in Nelson and Nelson, in which the court further explained its treatement of the presumption of equal contribution

In Nelson and Nelson, the question before the court was whether or not a piece of real property should have been included in the division of the parties’ assets.  During the parties’ marriage, the parties’ acquired a piece of real property which had $95,070 in equity at the time of the parties’ divorce.  The trial court ruled that Husband had rebutted the presumption of equal contribution with regards to the property and awarded all of the equity and the property to Husband. 

The Court of Appeals overturned the trial court’s ruling.  Even though Husband had made the financial contributions to the acquisition and maintenance of the real property, he did not prove that wife had not contriubted equally to it.  Citing Owens-Koenig and Koenig for the proposition that “when one spouse ‘holds assets separately, and the other makes a disproportionately greater nonfinancial contribution to the marital estate through homemaking, child care, or some other form of undercompensated service * * * the presumption of equal contribution is not overcome with respect to the spouse whose contribution is at least partly indirect and nonfinancial’,” the court held that Wife was entitled to one-half of the equity in the real property.

You can review the full opinion in Nelson and Nelson at http://www.publications.ojd.state.or.us/A131724.htm.

If you have any questions about appeallate law, attorney fees or any family law or divorce legal issue, please contact Daniel Margolin or C. Sean Stephens at Stephens Margolin P.C.

In Potts and Potts, ____ Or. App ___ (2008), a self employed husband challenged a $7000 monthly award of indefinite spousal support to Wife. The court denied wife’s property appeal, and reduced husband’s spousal support obligation to $5000. Husband’s main argument was that the spousal support award gave wife a much higher net income than him after he paid support. Husband argued that he faced an increase in business expenses that should be deducted from his income, and that wife could earn substantial income from the property received, thus reducing her need for monthly support. The court didn’t buy husband’s “increased business expenses” argument, and found that wife’s potential for investment income should be reduced by the cost of the home she would purchase with her property award. The court still reduced husband’s support to $5000 per month for an indefinite term, holding that the goal of enabling the parties to live separately at a standard of living similar to the marriage could be met at this amount. The court calculated husband’s after tax income to be $139,671, and wife’s to be $88,744. The court considered these figures roughly equal in part because husband received the riskiest, most volatile assets, with wife’s property award being more stable.

In Van Riesen and Cross, ____ Or. App. ___ (2008), the court considered husband’s argument that he should have been awarded maintenance support. The court agreed, holding that husband was entitled to both temporary and indefinite support from wife.

The parties were married in 1979 and divorced in 2004. They have two children. Husband worked full time during the marriage, and was fired from Intel in 1996 after a bad review. He took time off to recover from the emotional blow, and after an 18 month employment hunt, did not seek new employment because his investments were doing well, and he anticipated a $2,000,000 payment from Intel from his employment grievance with Intel for lost compensation. His employment grievance was ultimately denied. Husband then developed diabetes, dyspepsia, and depression. Wife filed for divorce in 2003. At that time she earned about $120,000 per year.

At trial, husband and his experts argued he was unemployable based on his personality, age, and health conditions. The trial court awarded husband $25,000 in transitional support, and the “long half” of the property. (Really not that much more than half, only $31,565 more than wife in a $1,600,000 marital estate) Wife argued on appeal that husband had skills, and that he could work but had voluntarily retired. Husband argued that he could not work based on his age, health, and time out of the workforce. The appellate court found husband capable of work, but not at his previous salary (approximately $120,000 including bonuses.) The court also found that husband’ s unemployment was not voluntary as wife claimed. The court awarded husband maintenance support of $2,500 per month for 4 years until he could draw on his retirement, and that a lesser amount be paid after that time.

There is no magic formula for spousal support. The court considers each claim on a case by case basis, applying the statutory factors in ORS 107.105(1)(d) and existing case law. Both cases are interesting, and informative to parties with similar issues and claims.