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How is spousal support calculated in high net worth divorce cases in New York State?

by | May 11, 2020 | Divorce, Family Law |

Understanding your rights to spousal support in the State of New York is a daunting and confusing task, especially if your divorce involves substantial income and assets. New York’s divorce laws, especially those dealing with financial aspects of divorce, are drafted to target those with uncomplicated financial lives and modest incomes, and are meant to simplify the financial negotiations and avoid excessive litigation costs.  However, especially in Westchester and New York Counties, a high-net-worth divorce can present many issues that differ from divorces involving fewer and more simple financial assets that make the application of the applicable divorce laws of the State of New York less straightforward. This is especially true when it comes to determining the amount and duration of an award of spousal support, otherwise known as maintenance.

As of January 23, 2016, a statute (DRL 236(B)) containing a basic formulaic approach to calculating spousal support was implemented. It’s the same calculation for temporary spousal support and post-divorce or post-separation spousal support. Under DRL 236(B), the spousal support formula is based on the combined income of the parties up to $192,000. However, if the parties’ combined income exceeds $192,000, the Court may consider an amount of income in excess of $192,000, based upon 20 enumerated factors. Some key factors include: the income and property of both spouses, the length of the marriage, the age and health of both spouses, the present and future income of both spouses., the ability of the receiving spouse to become self-supporting, acts by one spouse which inhibit the other from achieving employment, and the existence of a premarital joint household. The statute also allows the Court to consider any other factor it deems relevant to a determination of spousal support.

In other words, this last factor allows the Court to have complete discretion in determining the amount and duration of support based on whatever facts and circumstances the Court finds to be relevant. While providing the Court with flexibility to make appropriate awards of spousal support without being limited by the 20 enumerated factors, it also removes a level of predictability in the Court’s decision, as there is no real decisional rubric that they are mandated to follow. This unpredictability is especially evident in high-net-worth cases, where combined income is more than $192,000.

It is important to note that, in making such an award of spousal support based upon factors other than those enumerated in the statute, the Court must articulate what it considered in making that decision, but even on appeal, the trial court’s decision is generally upheld, because as the case law says, the trial court is in the best position to judge the parties’ credibility. As a result, very few of the trial court’s determinations are overturned.

This seemingly unlimited discretion by the Court to make spousal support determinations in high-net-worth cases may indicate that these cases are better settled between the parties themselves, with the assistance of their respective attorneys, rather than in court by a judge. This limits the potential unpredictability of a judge’s determination of spousal support, which the parties will be bound by, and allows the parties to negotiate between themselves and come to an agreement regarding spousal support that best addresses both the resources and needs of the parties.