New York Court Discusses Imputed Income With Regard to Spousal Maintenance

In many marriages, one spouse earns the majority of the couple’s income. As such, if a couple with dissimilar incomes decides to seek a divorce, the court may find it appropriate to grant the lesser-earning spouse maintenance. The courts do not merely rely on the parties’ assertions when considering whether to grant maintenance, and if so, in what amount, but will consider other factors as well. Recently, a New York court discussed maintenance awards in a matter in which the husband argued that the court abused its discretion in granting the wife nondurational maintenance. If you have questions regarding the financial impact of divorce, it is smart to speak to a New York divorce lawyer to address your concerns.

The Facts of the Case

It is reported that the husband and the wife married in 1985 and had four children. In November 2012, the wife instituted a divorce proceeding. When the trial was underway, the parties entered into a stipulation that resolved the issues of counsel and professional fees, separate property, and equitable distribution. The court subsequently issued a decision that imputed an annual income of $800,000 to the husband and approximately $62,000 to the wife.  It also entered a judgment of divorce that incorporated the stipulation of settlement agreed upon by the husband and the wife and granted the wife nondurational maintenance in the amount of $25,000 each month for five years, then $20,000 per month for an additional five years, and then $12,000 per month until either party died or the wife remarried. Both parties appealed.

Determination of Maintenance Awards

One of the issues on appeal was whether the trial court providently exercised its discretion in granting the wife nondurational maintenance. In assessing a party’s maintenance obligation, a court does not have to rely on the party’s own report of their finances but may impute income based on established future potential earnings or past income. It may also impute income to a person based on their future earning capacity, employment history, money received from friends and family, and educational background.

Thus, if a party’s report is not believable, a court may impute a higher income on a party than alleged. The appellate court explained that the courts have substantial leeway in determining whether income should be imputed to a party, and their credibility determinations are granted deference on appeal. In the subject case, despite the husband’s assertions to the contrary, the appellate court found that the trial court exercised its discretion appropriately in imputing $800,000 to the husband when calculating his support obligation. Thus, it affirmed the trial court ruling.

Speak to a Trusted New York Divorce Lawyer

Divorce can have a significant impact on a person’s financial status, and in many divorce actions, the courts will order one party to pay the other spousal maintenance. If you or your spouse intend to seek a divorce, it is smart to speak to an attorney as soon as possible. Ksenia Rudyuk is a trusted New York family law attorney who can advise you of your rights and assist you in pursuing the best legal outcome possible in consideration of the facts of your case. You can reach Ms. Rudyuk via the form online or at 212-706-2001 to set up a conference.

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