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Alimony - Willful Underemployment


Often times clients will come to me and say, "Eric, what is the benefit of receiving this alimony award if my soon to be ex-husband quits his job as he has threatened to do"? First off, they are typically correct in the fact that alimony is modifiable. What that means is that if there is an existing alimony obligation that obligation can be modified in either amount or in terms of duration. In order for that alimony award to be modified there must be a change in circumstances. The statute specifically states that a 20% change in the obligor's income is a sufficient "change in circumstances" to warrant review of the existing alimony obligation. That being said the court has wide jurisdiction to make such modification based on how it sees fit as long as there is a change of circumstances since the most recent alimony order issued. Examples of this might be the obligor spouse's income going up which would allow for an upward modification or alternatively a decrease in the obligor's income might allow for a decrease in the obligor's obligation. By the same token, an increase in the need of the recipient spouse might be grounds for an upward modification in the obligor's alimony obligation. Likewise, a decrease in the recipient spouse's income might be grounds for a reduction in the obligor's required obligation. Thus modification can be requested by either party and such modification can be in terms of an increase or decrease in amount and/or in duration such that the overall term of payments can be extended or shortened based on a change of circumstances. Remember of course that "permanent alimony" is not subject to the same rules of modification as "alimony" generally.

As a result of the susceptibility to modification obligor spouses often believe that they can quit their jobs and then file for a modification of alimony and receive their desired reduction. They frequently threaten their soon to be ex-spouses with this idea. For whatever reason the soon to be –ex spouse often takes this threat seriously. I'm not saying that they shouldn't take the threat seriously but the recipient spouse does generally speaking have the law on their side. Second of all and more importantly, it is a rare occasion that an obligor actually cuts his or her own life line, income stream, solely for the purpose of reducing his or her alimony obligation. It makes for a good threat but is a rarity in fact. Nevertheless, the question remains as to what will happen if the obligor does act on his or her threats to terminate or reduce his or her income voluntarily.

The chief case that I have found on point here is Rosenbaum v. Rosenbaum, 86 Nev. 550, 471 P.2d 254 (1970). In that case a husband moved from California to Nevada to file for Divorce. He had a well-paying job in California which he abruptly quit upon his move to Nevada. The district court here in Nevada decided that it would not take into consideration past employment of the husband or potential future income considering such facts and testimony to be too speculative. The case thus went up to the Supreme Court of Nevada for review. The Supreme Court reversed the trial court and ruled that the court should be allowed to but is not required to look at evidence demonstrating what the obligor could pay if the obligor so chose. The Supreme Court stated that the court is to look at the "good faith" of the obligor in his or her new lesser employment. If the court determines that the reduced income is not a result of bad faith or intentional conduct then it should consider current income only. On the other hand, if the court determines that the lesser income is a result of intentional conduct as the obligor could obtain employment providing higher income then the court should take this fact into consideration and the award should be set in accordance with ability to pay.

If you are seeking to demonstrate that the obligor spouse has a higher ability to pay then represented then you need to demonstrate this ability to the court. To do this one should present employment history of the obligor spouse to the court. In addition it is important to show evidence of the obligor's education and prior earning history. Also note that it is useful to demonstrate to the court just how many jobs are available for this qualified individual. During an economic downturn it may be that the individual is qualified but the jobs just do not currently exist. In this case it is excusable that he is unemployed or underemployed. On the other hand, if the economic engine of this country is running well then this argument cannot be had. If the court can see clearly that the obligor could obtain higher employment given his or her credentials and there is no shortage of employment opportunities available then the court should not have a problem with setting an alimony obligation consistent with the obligor's potential income stream. To determine this potential income it is useful to look up the Nevada average wage for that type of employment. This information is all public record and can be accesses easily via an internet search.

Based on the Rosenbaum case we know that an abrupt change in income by the obligor spouse decreasing his or her income will probably not suffice for a reduction of alimony. That is of course assuming that the obligor quit his or her job or otherwise intentionally reduced his or her income without good cause. If the obligor was terminated for reasons outside of his or her direct control and this can be shown to the court then this will likely be sufficient for such modification. A common time when you will see this happen is during a sudden downturn in the economy. During the recession of 2008 this was a common occurrence. However, as the recipient spouse or the obligor spouse it is important to note that if the income reduction is out of the obligor's control and thus a modification is in order such modification will only apply to future alimony payments which have yet to accrue. Thus if the obligor waits for months or years after his income has already been reduced and then seeks a reduction not only for future obligations but also as to accumulated arrears over the past two years his or her only possibility for success lies with regard to the future obligations. The court is without jurisdiction to modify accumulated alimony arrears. This blade cuts both ways of course, if there is an increase in income and the recipient waits months or years to file a motion to modify upwards that moving party will have no grounds to modify any accrued payments to be consistent with the obligors current or then existing higher income. As to accrued payments the court is without jurisdiction to modify downwards or upwards. The point is, act sooner rather than later if you seek an alimony modification.

Categories: Family Law