Minnesota law recognizes the right of a party to a divorce to seek an award of spousal maintenance (sometimes referred to as "alimony"). Maintenance is typically awarded when one party lacks sufficient income to meet their needs after divorce, and other party has the ability to assist.

An amendment, introduced in the Minnesota Legislature on March 15, 2016, proposed an change to Minn. Stat. sec. 518A.39, Subd. 3, which will terminate alimony payments if the recipient remarries or dies. HF1333 or the “cohabitation bill” also covers situations in which a recipient cohabitates with another person.

Similar Legislation Passed Across the Nation

Many other states are passing statutes like HF1333 regarding cohabitating relationships. For instance, New York, Missouri and Georgia allow courts discretion to modify alimony if they determine that cohabitation exists.

Will Alimony Be Terminated or Suspended?

HF 1333 as it’s presently written says that cohabitation creates grounds to suspend or terminate maintenance. This language is important, because of the difference between “termination” and “suspension.”

Per the Minnesota Statutes, “termination” means that the receiving spouse cannot return to court to get maintenance payments reintroduced. But the proposed law will not terminate payments for cohabitants. This raises a key question: will the bill encourage cohabitation and discourage remarriage?

The economic incentives will certainly be in place, even if the intent is otherwise. As Steve Jobs once sagely observed: “There are downsides to everything; there are unintended consequences to everything. The most corrosive piece of technology that I’ve ever seen is called television – but then, again, television, at its best, is magnificent.”

So will the effects of this proposed bill be “magnificent” or “corrosive” or a bit of both?

Seven Factors That Help Determine Whether Cohabitation Exists

1.    The couple owns assets in common, such as bank accounts, vehicle titles and real estate.

2.    The couple shares responsibilities.

3.    Others (e.g. friends and family) recognize the nature of the relationship.

4.    The couple lives together. This is the typical way people think about cohabitation. In fact, the word “cohabitate” literally means living together. (In our article in April’s Minnesota Lawyer, we argued that: “in our view, the proposed legislation would be just as effective if the “living situation” was the only issue explored by the court.”)

5.    The couple’s relationship has endured. This is a murky area, because overnight visits often gradually convert to living together in earnest. Also, some people move in immediately (without knowing each other well). Others live apart for years but nevertheless have very serious, albeit somewhat independent relationships.

6.    The couple has made promises to each other regarding support or gone through some form of commitment ceremony short of marriage.

7.    The court can consider other, diverse evidence – anything related to the issue of cohabitation.

Implications of HF 1333

•    Interestingly, the law would allow the court to determine that a couple is cohabiting even if they don’t actually live together physically.
•    Also, the court does not need to rely on one factor over the others discussed above. Since no one factor dominates, we believe the first four factors will likely be most important, because there should be less information available about the last three.
•    Per HF 1333, the obligor has the burden of proof to show that his or her ex is cohabitating.
•    Finally, the court must make written findings for all seven factors.

*A longer version of this article authored by Cynthia and Jason Brown originally appeared in the Minnesota Lawyer newspaper on April 7, 2016.

Spousal maintenance (often referred to as “alimony”) involves one party to a divorce paying the other to assist them with routine household expenses following the dissolution of the marriage. The law in this area is extremely complex. For purposes of this post, it is presumed that an award of spousal maintenance is appropriate among the litigants.

The classic view of spousal maintenance involves a permanent award of support – some amount, paid monthly, for an indefinite period of time. However, the law in Minnesota allows the litigants much more latitude than a judge in terms of resolving the issue of alimony.

Following a trial, the Court really only has a few options. First, the judge can award permanent spousal maintenance. Second, the judge can award spousal maintenance on a temporary basis (some amount, paid monthly, for a defined period of time). At the end of the temporary time period, the recipient of spousal maintenance has the ability to file a motion with the Court, seeking an extension of the maintenance timeframe. Third, the judge can deny the requesting party any award of alimony.

The nice thing about resolving the issue of spousal maintenance through settlement discussions, rather than by way of trial, is that the parties to the case have many more options available to them.

For example, the parties can agree to something called a Karon waiver. A Karon waiver (named after a Minnesota Supreme Court case involving the Karon family) involves a finite amount of maintenance paid for a finite period of time. Each side receives the benefit of certainty, as the amount of support is not subject to modification. The risk with a Karon waiver involves: (1) the potential for the payor to suffer a pay reduction, making payments more difficult; and (2) the potential for the recipient to need alimony once the relevant timeframe for payments has passed.

In either situation, the litigants would be out of luck, as the nature of a Karon waiver involves certainty of payment amount and duration. The benefits, however, usually outweigh the risks. Most often, the payor appreciates knowing exactly how much, and for how long, payments must be made. They can plan their future accordingly.

Another way to resolve the issue of alimony involves a lump sum buyout. If the parties have enough equity in various assets, they may wish to consider a lump sum payment in lieu of ongoing payments. The source of payment rests in the payor’s share of the marital estate. For example, let’s suppose that a spouse is willing to accept $1,000.00 per month in alimony for a period of ten years (120 months).

The cumulative value of those payments, at least on the surface, totals $120,000.00. Yet, alimony is taxable income to the recipient (property settlements are not). And, the time value of money would suggest that a lump sum “up front” requires a bit of a discount relative to payments over time. Consequently, the recipient may be willing to accept an extra $80,000.00 in marital assets in lieu of payments totaling $120,000.00 over a decade. Of course, each case is fact specific. Do not rely on this quick example in negotiating your own divorce. All sorts of variables come in to play – such as income tax brackets, investment options and the risks to each in accepting a lump sum buyout.

Of course, the litigants are also free to do a “partial buyout,” in which a lump sum payment is made in exchange for reduced monthly spousal maintenance payments.

Finally, we often see litigants agree to assume responsibility for a greater share of the marital debt as an offset to spousal maintenance payments – a lump sum in disguise.

Once an award of spousal maintenance (alimony) is ordered by the court, it may be modified if certain criteria are met. In order to modify and award of alimony, the party seeking modification obtains a court date and serves and files motion papers. Keep in mind that the modification, if granted, is usually only retroactive to the date that the motion papers are served on the other side. For that reason, it is important to obtain legal assistance at the earliest possible time, rather than allowing arrears to build up, if you are unable to afford the maintenance obligation as ordered.

Any of the following provide a basis for the judge to modify an existing alimony order:

  • Substantially increased or decreased earnings of either party;
  • Substantially increased or decreased needs of either party;
  • Receipt of public assistance benefits;
  • Change in cost of living, as measured by the federal government; and
  • Significant medical expenses incurred on behalf of a child that are not otherwise addressed in the judgment and decree.

Additional factors for consideration include the initial standards the court addresses in awarding spousal maintenance:

  • Financial need of each party relative to their income;
  • The ability of one party to pay the other spousal support;
  • The length of marriage;
  • The mental and physical health of the parties;
  • The role each party played during the marriage, in terms of working or raising children;
  • Financial assets available to each party to supplement their income;
  • The educational background of each party; and
  • The age of each party.

While the issues involved in modifying spousal maintenance are usually addressed in motion papers alone (such as affidavits and exhibits), some judges will order an evidentiary hearing (trial) to determine whether the request for modification is appropriate.

In December of 2009, Minnesota Judge Stephen Halsey (chambered in Wright County) launched his Minnesota Family Law Issues Blog, a terrific resource for both lawyers and litigants. As I understand, Judge Halsey’s blog is the first of it’s kind in Minnesota (from the judiciary). His unique perspective provides an interesting addition to the exchange of family law information online – including podcasts.

Judge Halsey’s post entitled Post-Decree Modification of Maintenance: Pension as Income or Property caught my attention as I was reviewing the posts of others today. Judge Halsey writes:

A recent unpublished Court of Appeals decision, Hemp, 2010 WL 1657024, is worthy of review by family law practitioners and judges as it considers once again which portions of a maintenance obligor’s pension may be considered as income or property when a motion to modify maintenance is brought. The Court discusses Lee, 775 NW2d 631 (Minn.2009), which held “a district court may include in its calculation of an obligor’s ability to pay maintenance the portion of an obligor’s monthly pension payment exceeding the amount the obligor is entitled to receive each month as marital property.”

The Court of Appeals in Hemp approved the district court’s apportionment of the monthly pension benefit between what is marital property and what is not. The district court, however, erred in its interpretation of the valuation method used in the original dissolution decree.

I think one lesson to be learned is that counsel and the court should make detailed findings of fact in the original decree as to the valuation method agreed-upon by the parties or as ordered by the court so that such method is clear to the court hearing post-decree motions on maintenance.

In a good number of the cases we handle, the issue of spousal maintenance is front and center. From my perspective, the most important part in settling a maintenance claim involves agreeing to a specific timetable for payment. A client may pay a bit more than they like, but the fact that there is a cap on their future liability is usually worth it. The benefit to the recipient? These timetables usually accompany a non-modifiable (even if their ex’s income drops significantly) maintenance award.

Spousal maintenance, formerly known as alimony, is one of the more difficult issues to tackle during the dissolution process.  With the exception of child custody, no other issue is as personal or emotionally charged to divorce litigants.

It is quite difficult to predict exactly how much spousal maintenance the court will award a particular party.  The court will examine a host of factors, and each play a part in the decision-making process.  For that reason, alimony is decided on a case-by-case basis.

The court will examine the standard of living established during the marriage.  Based upon that standard, it will take into account the anticipated ongoing monthly expenses of each spouse. The question for the court involves whether these alleged expenses are reasonable under the circumstances.  The court will compare the expenses against the income of each litigant.  If a litigant faces a monthly shortfall, the party will have a need for spousal support. If a litigant faces a monthly windfall, they will have the ability to pay spousal maintenance.  These elements are measured against the length of the parties’ marriage, the age of the parties, the educational background of the parties and the mental and physical health of the parties.

Once all of the elements are considered, the court will determine whether an award is appropriate, how much the monthly award should be and the length of time paying party will be obligated to support their former spouse. The longer the marriage, the more likely a permanent award of spousal maintenance will be granted.  With shorter marriages, the court may consider an award of temporary spousal maintenance so that other party has an opportunity to reeducate themselves, reestablish their career path and become self-supporting.