How Much Maintenance Will A Court Award?


To begin, maintenance may be defined as payments made from one spouse to another at fixed intervals in accordance with an agreement between the parties or as a result of an award by the Court. In determining whether maintenance is appropriate and the amount and length of such maintenance, the Court will rely on factors set forth in the Domestic Relations Law § 236, Part B. When considering the twelve factors set forth in §236, the Court will analyze all the available information having regard for the standard of living of the parties established during the marriage, whether recipient lacks sufficient property and income to provide for his or her reasonable needs and whether the obligor has sufficient property or income to provide for the reasonable needs of the other spouse.

The factors the Court must consider are: (1) the income and property of the respective parties including martial property distributed as part of equitable distribution; (2) the duration of the marriage and the age and health of both parties; (3) the present and future earning capacity of both parties; (4) the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary thereof; (5) reduced or lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage; (6) the presence of children of the marriage in the respective homes of the parties; (7) the tax consequences to each party; (8) contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party; (9) the wasteful dissipation of marital property by either spouse; (10) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; (11) the loss of health insurance benefits upon dissolution of the marriage; and (12) any other factor which the court shall expressly find to by just and proper.

Essentially, maintenance is awarded to a party to allow them time to get on their feet. You are not entitled to, nor are you obligated to pay, maintenance to keep the awarding party in a life style on par with the pre divorce standard of living. However, maintenance will be awarded to a party to allow them to “get on their feet.” So for example, if one spouse is a doctor making $300,000.00 a year and the other spouse was not working at all, it is clear that the Court should award maintenance. What if, in contemplation of the divorce, the unemployed spouse gets a job? What if that job pays $70,000.00 a year? Maintenance will in all likelihood still be awarded. First, in this example, the new job just began. The Court will recognize the fact that the nonworking spouse, who just obtained employment, is probably not in the position to rent another place to live. The Court will consider the fact that instead of working and saving money, the spouse was financially dependent on the doctor. Therefore, things like paying for the first month, last month and security deposit will be challenging at best. How about a car to get to this new place of employment? Second, the Court will consider, not only the pre divorce standard of living, but will also consider the disparity of incomes between the two parties in fashioning an award. Because the spouse has obtained employment, the duration of the award may not be as long, nor as much, however with a $230,000.00 gap between the two parties, a maintenance award in all likelihood be awarded.

LEARNING POINT: Maintenance is a complicated matter. The “reasonable needs” of a party is hard to define. The disparity in incomes and other factors will be considered by the Courts in fashioning a just award. The one to be most aware of is the twelfth factor, “any other factor which the court shall expressly find to by just and proper.” This is the catch all which allows Courts the discretion to make a decision based on anything they want! Contact us immediately to allow us to give you the best legal advice possible.

How Much Maintenance Will A Court Award?

Statement of Net Worth


The Domestic Relations Law (DRL) requires compulsory disclosure by both parties of their respective financial states in all matrimonial actions and proceedings in which maintenance or support is an issue. This is normally done through a net worth statement. Net worth means the amount of total assets including income that exceed total liabilities, including fixed financial obligations. Your Net worth statement must include all income and assets of any kind, wherever they may be located, as well as any assets transferred out of your name within the preceding three years or the length of the marriage, whichever is shorter. Transfer of money for the routine maintenance of your daily life is not necessarily included.

Your net worth statement includes the disclosure of the details of the general family data, expenses, gross income, assets (joint and separate), liabilities (joint and separate) assets transferred during the preceding three years, any support requirements- attorney fees, forensic accounts, valuation experts and the such. In addition to this data, the statement of net worth should include a copy of your most current paystub and the party’s most recently filed state and federal income tax returns. These documents are required to check on the accuracy of the representations in the net worth statement. As you may have read in previous blogs, the tax return is just the starting point. There are many situations in which the tax return may not be the final word. For example, if lost your job right after your taxes were filed, you would not want the Court to make decisions based on income that you no longer earn. On the other hand, if your spouse started a new job in the new year, you would not want the Court basing its decision on numbers that are inaccurate and to your detriment.

A party in a matrimonial action must provide a sworn statement of net worth within 20 days after the receipt of a notice in writing demanding such a statement. Normally, your attorney will make such a demand within days of being retained. This is important. If you are the non monied spouse and are in need of pendente lite relief, you will need your spouse’s last tax return and pay stub to adequately craft your motion.

LEARNING POINT: As you know from our previous blogs, New York is an equitable distribution state. To equitably divide all the assets and liabilities of the marriage, a Statement of New Worth is crucial and a good starting point. In preparing for a divorce and a statement of net worth, gather your tax returns for the last three years, and your last three pay stubs. This will give us a good picture of your financial situation and allow us to adequately represent your needs.

How Does Divorce Affect A Business Partnership?


During your marriage, your spouse opened up a professional practice and over the years it has grown. You are now getting divorced and your question is, are you entitled to any part of this business? In New York, it is clear that professional practices (law firm, medical, dental etc.) established during the marriage and prior to the commencement of a matrimonial action or execution of a separation agreement is marital property and subject to equitable distribution. Additionally, even if the practice in question was established before the marriage, the appreciation of value of the practice, where there have been contributions by the non-professional spouse, is marital property subject to equitable distribution. What will not happen, however, is that you are awarded interest in the practice. For example, if your spouse built a law practice and you are not an attorney, the Court will not say that you are now a partner of the practice. What the Court will do is to value the practice and award an offsetting interest in the other property to the non-professional spouse or, if those funds insufficient, order a distributive award to the non-professional spouse.

How will the Court value the practice? The court will analyze the value of the tangible physical assets. In addition, it will look to the good will of the practice including earnings and liabilities. The Court will use the following factors: 1.) the nature and history of the business; 2.) its particular economic outlook and that of its industry generally; 3.) the book value of the stock and the financial condition of the business; 4.) the company’s earning capacity; 5.) its dividend paying capacity; 6.) its goodwill and other intangible assets; 7.) other sales of the corporation’s stock; and 8.) the market price of stock of comparable corporations.

There are many methods of valuing good will and a particular practice. The most common is the capitalization of earnings approach, which is a weighted average of annual earnings received by the professional spouse in excess of reasonable compensation, reduced by the value of the return on tangible assets, and applied to a capitalization rate. The Court will be mindful of abnormally high and low years of earnings. The valuation will also take into account marketability, or lack thereof, of the professional business in question.

LEARNING POINT: There are many methods of valuating a practice which you and your spouse have built while you married. The practice will be part of the equitable distribution of the marital estate. It is important to start the valuation process as soon as possible, so hire an attorney to protect your interests as soon as possible.