Spousal Maintenance: Can you keep living a life you’re use to?
The Myth of Spousal Maintenance:
Over the years I’ve noticed that people imagine that ‘spousal maintenance’ is all about providing one party with enough funds so they can continue to live the life they’ve grown accustomed to.
Unfortunately, claims for ‘spousal maintenance’ don’t always play out that way.
Earlier this year, you may have read lawyer Simon Creek’s pontifications in the Sydney Morning Herald about a rumoured divorce settlement and substantial spousal maintenance to be paid by media superstar Karl Stefanovic, to his wife of some 21 years, Cassandra Thornburn.
According to our legal scribe, Ms Thornburn was to receive 6 million dollars of a 6.5 million dollar property pool, and substantial spousal maintenance. Whether or not this was indeed the outcome, the one thing I would agree with Mr Creek on is that this type of settlement is a ‘Unicorn’. Very rarely seen!
So how indeed is spousal maintenance worked out?
The Spousal Maintenance Formula
The wild imaginings of a dudded spouse or partner of a life of indulgence and luxury, can quickly turn south when one looks at spousal maintenance through the not so rose coloured glass that is the Family Law Act.
In a recent case in the Federal Circuit Court, Kaiser & Kaiser , Mrs Kaiser had a marriage that had lasted some 11 years with a man described in the judgement as “a member of a family that were well-known prominent business people and philanthropists in Melbourne”.
But the thing is, at the time of the divorce and property proceedings, Mr Kaiser presented a financial statement that showed he had diddley squat- $39,000 in super and a car worth $8000. He also had an income around $100,000 and received an annual ‘gift’ from his dear Mother of $50,000.
Clearly this wealthy family were keeping the substantial crown jewels away from their forlorn Prince!
However, during the trial, Mrs Kaiser was determined to prove that her ex had access to a much more significant financial resource than he disclosed. She was after a 1.5 million dollar home, a car worth a minimum of $40,000, and spousal maintenance of $500 per week when the two children were residing with her, and $200 per week when they were with their Dad.
Throughout the trial she told the court of her very comfortable life she had had with Mr Kaiser for almost 11 years and as the judge noted, “She no doubt expected her standard of living to continue after she and her husband separated.”
Self representing, she vigorously cross examined the accountant of the family trusts her hubby was getting an annual gift from. But all to no avail. He was a beneficiary of those trusts BUT had never received any distribution from them, just that annual ‘gift’ from his Mum.
Left with a husband with apparently no assets, was she entitled to spousal maintenance so she could live in the standard she had been accustomed to?
A better question might be… Was she entitled to it at all?
Under the Family Law Act, to be eligible for spousal maintenance the onus is on the person applying for it to prove they actually need it. Secondly, the other party must also have the capacity to pay it.
The court considers the following about you in regard to a claim:
♥ Your age and health
♥ Your income, property, and financial resources
♥ Your ability to work – because if you can you’re not going to get spousal maintenance!
♥ What is a suitable standard of living – and that doesn’t mean a continued life of luxury!
♥ If the marriage has affected your ability to earn an income.
For example if you have been involved in “home duties” for most of your married life, you may need spousal maintenance for an extended period to allow you to study so you can develop new skills.
♥ The court also takes into account with whom the children (under 18 years of age or adult children who are disabled) live.
Other considerations the court can take into consideration when you ask for spousal maintenance:
⊗ The length of your relationship
⊗ Any super you have
⊗ Whether you have a pension (or are eligible for one)
⊗ Whether maintenance would help you to have a standard of living that is “reasonable”
⊗ Whether your circumstance has changed as in you might be in a new relationship where you’re being supported.
So there are a lot of factors the court considers when deciding on whether an order for spousal maintenance is justified. In Mrs Kaiser’s case, her husband offered to pay her rent of $950 per week until 2024, and her gas and electricity bills as well. The court believed this gave her more than enough time take care of the children to a reasonable standard and to finish her education so she could rejoin the workforce.
When it came to the 1.5 million dollar house she wanted – no cigar I’m afraid, as she couldn’t prove her husband had assets.
Spousal maintenance isn’t just about wives
And spousal maintenance is not confined by gender, as was shown recently in Meehan & Meehan .
Mr Meehan, after a near 16 year marriage, had asked for spousal maintenance of $150 per week because he claimed that due to ill health he couldn’t do any work. He also felt that his wife could afford to pay this as she had recently inherited a number of properties from her late father worth around $3 million dollars.
However, his wife had actually set up a substantial retirement fund for him valued at $450,000 after her inheritance in 2013. Despite the fact that almost all of the property pool ($3.3 million) was based on the wife’s recent inheritance, he still ended up with 17.5% of it.
But when it came to spousal maintenance, the court was not convinced that he needed it. The Judge felt he had not proven that he couldn’t work. Being unemployed for some 17 years also didn’t curry any favour. On top of this, his doctor under cross examination stated that despite his ‘impairments’ he could perform lighter work.
The Judge was quite critical of Mr Meehan in this regard stating:
“Whilst I accept that entry for Mr Meehan into the workforce might be substantially difficult, this is not the test. There is no evidence before me of any efforts or attempts by the husband to obtain any employment whatsoever or to undertake any form of re-training so as to enter the workforce. In this sense there is no evidence of him mitigating his own current position.”
And there lies the problem for so many spousal maintenance claims, you can’t just expect to live in a standard of living you’ve grown accustomed to.
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