On February 21, 2019, the Michigan Court of Appeals reviewed a case stemming from an Oakland County Circuit Court divorce case, Gallagher v. Gallagher, in which alimony was granted 37 years after the parties’ divorce was final. The trial court awarded the wife $2,500 per month in alimony, but the Court of Appeals reversed and vacated the award on appeal.
Although the parties were married for 22 years, their divorce was final in 1980. At the time of the divorce, the parties agreed that alimony was “reserved” as to the wife, meaning that no alimony was granted at the time of divorce, but in the event of a change in circumstances, she may petition the court at a future time to request alimony. The judgment also stated that the wife’s dissipation of assets (which were divided equally) would not constitute a change in circumstances warranting payment of alimony in the future.
37 years later, at age 81 and having depleted the assets awarded to her in the judgment of divorce, the wife filed a petition requesting alimony. Her only income was $2,254 per month in pension and Social Security benefits. In contrast, the husband was retired from GM and had invested wisely, amassing an investment portfolio worth over $2,000,000.
While the trial court granted the wife alimony in the amount of $2,500 per month, the Court of Appeals vacated this award and stated “the trial court’s award of spousal support rewarded [wife] for being a spendthrift and her failure to save for retirement. Conversely, it punished [husband] for his investment skills and relative frugality.”
This case is striking, in that it serves as a reminder to divorcing couples to understand fully the terms of their alimony order. If no alimony is granted, the Judgment must state unequivocally that alimony is barred forever.
If alimony is granted, careful consideration must be given to whether that award is modifiable or non-modifiable. Non-modifiable alimony ensures that the alimony award cannot be increased, decreased, extended, or shortened from the amount stated in the Judgment. On the other hand, modifiable alimony, as the name implies, can be extended, shortened, increased or lowered as circumstances change.
Therefore, it is crucial to speak with your attorney, and where appropriate, a financial professional, to determine what type of alimony best suits a client’s potential needs in the short-term and the long-term. It is important to understand that non-modifiable alimony can only be order if it is agreed upon by both parties. Absent an agreement, or if the Judgment is silent on the issue, alimony is presumed to be modifiable. In the event a case goes to trial and the judge determines the alimony award, the alimony must be modifiable.
And if alimony is reserved, as in the Gallagher case, a sunset date or limiting terms of what circumstances may or may not result in a modification of alimony would be wise, rather than leaving the issue open-ended.
There is no one-sized fits all approach to alimony. Each case is unique and good communication with your attorney regarding your needs and goals is essential. A lack of communication could result in a legal battle in the event of a change in circumstances, even if that change occurs decades down the road.
James Chryssikos is an experienced family law attorney in Troy, Michigan. For more questions or information, please call us at (248) 290-0515 or visit us at www.chryssikoslaw.com