February 12, 2014 /24-7PressRelease/ -- Earning capacity should have been specified in award of spousal support---
Article provided by Sheila K. Rosenstein, Attorney at Law
Visit us at http://www.rosensteinatlaw.com
In determining the amount and duration of an alimony award in a divorce proceeding in Connecticut, the court may consider a number of factors including the length of the marriage, the amount and sources of income, and the spouses' earning capacity.
However, what if the trial court never determined the specific dollar amount of the spouse's earning capacity? This issue was raised in a recent Connecticut Supreme Court case, Tanzman v. Meurer.
What was the husband's earning capacity?
In the couple's divorce proceeding, the trial court entered an order requiring the husband to pay his wife $16,000 per month in alimony and child support for a period of 14 years. The husband's yearly average income as a day trader over a seven-year period had been approximately $988,000 per year, although changes in the industry had reduced the husband's recent success. The husband explained that he had been unable to find a job in a related field and was currently spending less than 40 hours per week trading his own money.
The court concluded that the husband had not made satisfactory efforts toward finding a new job and that the husband's earning capacity exceeded his then-current income. However, the trial court did not specify the amount of that earning capacity.
Approximately two years later, the husband filed a motion to modify the support order, explaining he now had a job with an annual salary of $100,000. Because this was only a fraction of the earning capacity previously attributed to him, the husband argued this constituted a substantial change in circumstances justifying a modification of the award. After a hearing, the trial court denied the husband's motion for modification, and the husband appealed.
No dollar amount specified
The Connecticut Supreme Court noted that, under the appropriate circumstances, a trial court may base an alimony award on the earning capacity of the parties rather than on actual earned income. Earning capacity, in this context, is an amount which a person can realistically be expected to earn considering such things as his or her skills and employability.
However, in the present case, the trial court, at the time of the original trial, concluded only that the husband had not maximized his earning capacity and made no finding as to what was, in fact, the husband's maximum earning capacity. The failure to specify the dollar amount of the earning capacity left the husband in doubt as to what was expected, and made it extremely difficult to determine the reasonableness of the financial award, or to determine later whether there had been a substantial change in circumstances.
Thus, the Connecticut Supreme Court held that when a trial court bases a spousal support award on a party's earning capacity, it must determine the specific dollar amount of the party's earning capacity. Here, the trial court could not reasonably have concluded that there had been no substantial change, where it had never initially determined the husband's specific earning capacity. Therefore, the trial court abused its discretion when it denied the motion for modification.
Understanding your rights
Many issues must be resolved whenever a marriage ends in divorce, including the issue of spousal support or alimony. In addition, changing circumstances thereafter may require modifications to the terms of the divorce. Whether you are considering pursuing a divorce or trying to modify its terms, seek an experienced family law attorney who will ensure you understand your rights and will help you get through this stressful time.
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