Individuals who have signed a Marital Agreement requiring them to pay spousal support to a former spouse as well as those individuals whose Final Decree of Divorce directs the payment of spousal support to a former spouse, want to know how the payor’s prospective retirement will affect that obligation. Likewise, individuals (usually former wives) whom are receiving periodic spousal support payments need to know whether a prospective retirement will affect his/her payment.
Retirement and Divorce
Planning for retirement can be challenging even when spousal support obligations are not a part of the landscape. When the possible or probable effect on a spousal support obligation is in play, the stakes for both spousal support payors and recipients can be elevated.
If the Agreement or Final Decree simply established a periodic spousal support amount leaving future modification to the Court’s discretion, then the effect of a retirement is unfortunately difficult to predict. There is in Virginia, no bright line rule that answers directly the question whether and to what extent a spousal support obligation will be reduced or eliminated upon retirement.
Virginia Code Section 20-109(A)
Under Virginia Code Section 20-109(A) the Court may “[u]pon petition of either party . . . [modify] spousal support . . . as the circumstances may make proper.”
In the case of Schoenwetter v. Schoenwetter, 8 Va. App. 601 605, (1989) ), the Court of Appeals held ” [a] party seeking modification of spousal support pursuant to Code Section 20-109 bears the burden of proving “both a material change in circumstances and that this change warrants a modification of support.”
In the case of Yohay v. Ryan, 4 Va. App. 559, 566, (1987) the Court of Appeals held “[a] material change in circumstances, standing alone, does not provide a basis for the trial court to modify its support decree. A modification is appropriate only after [italics added] the court has considered the material change in circumstances in relation to . . . the present circumstances of both parties . . . ”
Significantly the Supreme Court of Virginia held in Antonelli v. Antonelli, 242 Va. 152, 156, (1991) that “[a] reduction in income resulting from a voluntary employment decision does not require [italics added] a corresponding reduction in the payor spouse’s support obligations, even if the decision was reasonable and made in good faith.
In the case of Stubblebine v. Stubblebine, 22 Va. App. 703, (1996) the Court of Appeals stated “When considering the issue of spousal support, . . . the trial court must take into account the receiving spouse’s needs and ability to provide for the needs, and balance those against the other spouse’s ability to provide support
For those spouses who are entering the process of separation and divorce where spousal support will be set and could extend to either party’s retirement, both parties will benefit if guidelines can be established in the Marital Agreement at the outset thereby eliminating the prospect of Court intervention later with an uncertain outcome.
For more information, check out our post, What is a Prenuptial Agreement?