The California Court of Appeal recently handed down an interesting decision in the case of In Re Marriage of Ackerman which discusses a number of issues including the award of spousal support.Download ackermanmarital_standard_of_living.pdf
Unlike the calculation of child support, the Court has traditionally had much greater discretion in calculating the award of spousal support using a list of factors set forth in Family Code 4320 Read section. In calculating spousal support the court usually starts with a determination of the marital standard of living at the date of separation sufficient to meet the needs of the supported spouse.
Unfortunately, under California law there is no hard and fast way of calculating the marital standard of living. One approach the courts have taken is to look at the "reasonable" expenses of each party at the date of separation and see whether the supporting spouse has sufficient cash flow to pay support to cover these expenses. For example, if the supported wife spends $6,000 a month on her living expenses a court might use that figure as the marital standard of living if the husband has sufficient income to pay that amount. In other words, husband ends up paying spousal support so that after taking account child support and wife's other sources of income, her total income is topped up to $6,000. But it needn't do so.
The case of In Re Marriage of Akerman illustrates what happens when the spouse claiming support claims unreasonably high expenses. In this case Anne Ackerman claimed that her monthly expenses as a stay at home wife were $50,000 a month. She claimed she needed two nannies, a cook and several babysitters based on the fact that her eldest son was autistic. However the parties stipulated that, her husband, Boris Akerman, a plastic surgeon, only had GROSS monthly cash flow of $61,000 a month. Further, the parties tax return for 2001 (the year in which the parties separated) showed that the parties monthly net income was $36,000. The trial court therefore halved this amount and rounded it up to $20,000 and used this as the marital standard of living. In other words, instead of looking at the parties income and expenses, the trial court only looked at the family's average income as evidence of the standard of living.
The trial court then said that once you took into account Anne's award of child support, spousal support, the reasonable rate of interest on her investments (4.3-4.5% government bond rate) and what she could earn working as a paralegal because she had a law degree, her monthly income would be at least $20,000.
Anne's initial Child support: $10,070
Spousal support: $7,500
Anne's imputed income
working as a paralegal: $3,000
The Court of Appeal affirmed the trial court's approach. It also affirmed the trial court's approach of imputing income to Anne because she had a law degree and although she hadn't passed the bar exam she could earn at least $3,000 as a paralegal. The Court didn't seem particularly impressed by her arguments that her employability was limited by her need to look after an autistic child. However, from the record there doesn't appear to be any expert evidence presented on this issue.
Warren Shiell is a divorce lawyer in Beverly Hills