The answer to this question isn’t a clear yes or no, as there are many considerations courts take into account in considering whether to eliminate a spousal maintenance upon retirement.
According to Minnesota law, spousal maintenance is characterized as “temporary” or “permanent.” Although the permanent term does not quite mean forever as it sounds. Minnesota statutes provide permanent spousal maintenance continues until: the court modifies it, one of the spouses dies, the recipient remarries, or upon a specified time or event agreed upon by the parties. Please note that Minnesota statutes do not state that spousal maintenance is eliminated upon retirement.
The Spousal Maintenance Modification Standard in Minnesota
The standard application of the law around retirement and spousal maintenance, uses the modification standard. Spousal maintenance can be modified when a substantial change in circumstances occurs, such as an increase or decrease in either parties’ income.
Retirement is a substantial change in circumstances, but doesn’t always mean the elimination of spousal maintenance. The court will consider if the payor is acting out of good faith, or simply retiring with the sole intention of eliminating the spousal maintenance award. Such factors as the traditional retirement age, the age of others in the payor’s industry, the physical/mental health of the retiring party can be considered by the courts in this regard.
The Court Determines Whether the Spousal Maintenance Modification is Warranted
After the court examines the motivation and timing of the payor’s retirement, the payor must show the courts that their retirement will result in a substantial change of circumstances (the decrease of income) rendering the existing spousal maintenance award unfair and unreasonable. In many cases, the payor argues that requiring him or her to continue working constitutes “involuntary servitude” while a payee may contend that without support from the payor, he or she will not be able to meet his or her monthly living expenses. If the court determines the retirement is made in good faith and the existing support award is unfair and unreasonable, then spousal maintenance can be modified to a lower amount or eliminated all-together.
Other factors the court may consider to determine the motivation or timing of the retirement are:
Expectations of retirement at the time of divorce;
Economic conditions; and
Payor’s employment history.
In Minnesota, there’s no standard age of retirement, which would automatically presume the retirement is in good faith. Therefore, these factors and more are used by the courts to determine the modification amount of spousal maintenance.
How the Modification Amount is Determined
Even if the payor proves they’re acting in good faith in their retirement and a substantial change of circumstances requires a modification of spousal maintenance, in rare circumstances payor’s may still need to pay a lower support amount. This lower amount may be difficult to determine and is based upon income generated from assets owned by the payor as well as other income derived by the payor during retirement. In many cases, payor’s have insufficient income generated from his or her assets to continue to pay for their living expenses as well as to maintain the spousal maintenance award. Additionally, some assets that were divided in the divorce dissolution property division may not be included in calculating the payor’s ability to pay spousal maintenance in retirement.
Spousal Maintenance Modification in Retirement
Spousal maintenance in Minnesota is not automatically eliminated upon retirement, but generally a substantial change in circumstances rendering the existing support award unfair and unreasonable warrants the modification or elimination of the support award. The Court takes into account various considerations in order to determine whether the payor is retiring in good faith. If the payor retires in good faith rendering the support award unfair and unreasonable, then the court looks at various factors to determine whether to eliminate or modify the support obligation.
In general, navigating spousal maintenance upon retirement can be complex. Accordingly, it is prudent to retain an experienced family law attorney in Minnesota. Matthew J. Gilbert of Gilbert Alden PLLC, is a family law attorney that has the experience and expertise to guide clients through spousal maintenance matters in Minnesota. In 2015 Matthew was identified as one of the 10 Best Family Law Attorneys in Minnesota based upon client satisfaction, according to the American Institute of Family Law.
Clients will find all the expertise and specialized attention needed to navigate their spousal maintenance modifications upon retirement. By choosing Gilbert Alden, PLLC, a law firm located in the Burnsville/Eagan/Apple Valley area, clients can confidently expect the best results in this crucial matter, so they can enjoy their retirement with peace of mind. To learn more, please contact us today.