Published on:

Paying Spousal Support After Retirement – In re Marriage of Gaasch

retirement-money-1020934-mCourts generally won’t change a spousal support order unless there’s been what they refer to as a “change in circumstances.” Retirement, for example, may change the amount of money that a person is capable of paying his or her former spouse each month. As the Sixth District explained in a recent decision, however, retirement may or may not absolve you of the entire spousal support obligation.

Husband and Wife separated in April 2009 after roughly 20 years of marriage. At the time they divorced, Husband agreed to pay wife $5,000 a month in spousal support until he died, Wife remarried, or the court ruled otherwise. The parties also agreed that they would revisit the issue once Husband, who was 64 years old at the time, retired. Husband further pledged to keep Wife as the beneficiary of his life insurance policy.

Husband asked the court to eliminate the spousal support award in 2012, arguing that his circumstances had changed. Husband said that he was preparing to retire, that he’d remarried, and that he’d be earning about $4,000 per month in Social Security and retirement income from his employer. He estimated his living expenses at about $2,300 per month and said he was losing about $50 a month from a rental property because fees, taxes, expenses, and the mortgage payment were slightly more than the $3,200 that he was charging his tenants.

Meanwhile, Wife would be getting about $2,800 in income from her share of his retirement benefits and in disability income, according to Husband’s calculations. He said he was “fairly confident” that Wife could start to access her share of the retirement benefits because she had been diagnosed with multiple sclerosis, and the retirement plan allowed early withdrawal in the event of disability.

A trial court issued an order reducing the monthly support payments to $2,500 per month until September 2013, to $1,000 per month thereafter, and eventually to $0 in June 2015. It also relieved Husband of the obligation to maintain the life insurance policy. The court said these changes were based on income. In particular, the court said Husband could make the rental property more profitable by reducing certain costs.

On appeal, Husband argued that the trial court wrongly imputed additional income from the rental property when the judge said he believed Husband could “get more income from the residential property.” The 6th District disagreed. The appeals court explained that Family Code section 4320 requires a trial court to consider various factors in calculating a support award, including a “party’s earning capacity, earned and unearned income, assets, and standard of living.”

Here, the Court said Husband didn’t show that the trial court was incorrect in assuming that he could reduce some of the rental property expenses. “As the court expressly noted during the hearing, [Husband] had already reduced his gardening expenses from $337 per month to $160 per month,” the Court said. “Therefore, it was not unreasonable for the trial court to infer that it was possible that some of the expenses tied to the rental property could be reduced, because [Husband] had already reduced some of the expenditures on the rental property by the time of the hearing.”

As a result, the appeals court affirmed the lower court’s decision.

San Jose divorce lawyer John S. Yohanan has extensive experience handling a wide range of divorce issues, including those related to spousal support and income valuation. If you want a family lawyer with more than 30 years of experience on your side, call our office at (408)297-0700 or contact us online.

Related blog posts:

How ‘Standard of Living’ Impacts Spousal Support Decisions – In re Marriage of Kuhs

Valuing Property in California Divorce Cases – In re Marriage of Sattler

California Court Says Wife’s Bonuses After Separation Are Community Property – In re Marriage of Finby