California family law has long recognized a parties' right to stop working at retirement age, which usually justifies a downward modification or termination of a spousal support obligation. Sometimes, however, the payer of spousal support is still obligated to pay support after retirement when his or her retirement income is substantially more than the supported party and the supported party is still in need of support.
In such cases, there are methods the supporting spouse can use to either terminate or substantially reduce the spousal support obligation. One method is to bring to the judge’s attention there has been a material increase to the other party’s income since the issuance of the spousal support obligation, to demonstrate that the supported party is now capable of being self-supporting.
Another method that may bear fruit in family court is to argue the other party has not applied him or herself enough to find work, and therefore the judge should impute income to the party. In family court, we call this an “earning capacity” argument, where the judge assigns a fictional income to the party based on his or her ability and opportunity to find work. But can we make an earning capacity argument if the supported spouse is also at the age of retirement?
The answer to this question was recently found in an appellate court decision, titled Stuard v. Stuard. In Stuard, the parties divorced long after they both retired. Mr. Stuard, a retired firefighter, received a nice pension, which provided him with the ability to pay spousal support. Conversely, Ms. Stuard received very little retirement income. At trial, Mr. Stuard argued the judge should impute income to Ms. Stuard based on her pre-retirement earnings. Unfortunately for Mr. Stuard, however, the judge declined to do so based on the fact that Ms. Stuard was also retired. The trial court's decision was subsequently upheld on appeal, making it clear that supported parties have the same right to retire as supporting parties.
In summary, although the California Family Code does not provide for "lifetime alimony," the reality is that there are plenty of people who go to their graves paying these monthly obligations. We now also know, based on the Stuard decision, the number of people in this misfortunate group will only grow.