As you might have read about in some of our previous blogs, alimony – also known as spousal support – is sometimes awarded to a party in a divorce proceeding. An alimony award may be impacted by the court’s consideration of whether to “impute” income to the spouse seeking alimony. Imputing income is when a court considers an unemployed or under-employed spouse to have the capability to earn more than they may actually be earning. (Be sure to check out our “Income Imputing” blog entries, Part 1 and Part 2.)
One of the elements that can factor into a court’s determination of alimony is a scenario where one spouse may be retired at the time of divorce, but the other is still working in their occupation.
In such a scenario, the question may be asked whether income can be imputed to the retired spouse, or whether the court will find that the retired spouse is incapable of working. The answer is, unsurprisingly: “it depends.”
In a recent Utah Court of Appeals case, Petrzelka v. Goodwin, 461 P.3d 1134 (Utah App. 2020), the Court of Appeals held that an important consideration that a trial court should factor in when determining this question is: whether it is appropriate for the retired spouse to be retired, instead of working. In Petrzelka, the appellate court pointed out that there exists no right to retire in Utah.
Primarily for this reason, the appellate court assessed the trial court’s analysis on whether to impute income to a retired spouse in essentially the same way the trial court determines whether (and at what level) to impute income to an unemployed or underemployed spouse. For reasons of age, while a retired spouse might be physically unable to work more often than your average unemployed spouse, under Petrzelka, there is no differentiation in being retired versus simply “not being employed” that should impact the trial court’s analysis and findings regarding alimony.
In Petrzelka, the husband and wife had married “later in life” – when the husband was 61 and the wife was 42. By the time they separated, the husband was 72 years old and had been retired for three years, while the wife was still working in her established career in education. At the time of separation, the wife had a steady income, but the husband’s social security and retirement income was not sufficient to cover his monthly need.
At trial, the retired husband sought an award of alimony. He argued that the court should not impute income to him, on the grounds that he was retired and had been retired for three years prior to the divorce being filed. Evidence was presented at trial that the husband lived an active lifestyle, that he had no physical restraints keeping him from working, and that he had marketable and extensive job skills. The trial court found that “the circumstances at play made it inequitable for [the husband] not to expend some effort to support himself,” and on that basis, imputed income to the husband based upon what it considered to be an appropriate hourly rate for an appropriate number of hours per week. The husband disagreed with the trial court’s assessment and appealed.
The Court of Appeals affirmed the trial court’s finding and conclusion to impute income to the husband. The appellate court believed that the husband “ha[d] not demonstrated that this premise is at all sound.” The Court of Appeals stated: “[b]ecause income imputation itself is primarily focused on a spouse’s ability to produce income, it is not unusual for courts to impute income to a spouse who has not worked during the marriage (or who has not worked for a number of years preceding the divorce) but who is nevertheless capable of producing income.” The appellate court held that the trial judge correctly found that when the husband’s retirement and social security income was added to the imputed income amount – at least on paper – this eliminated the husband’s need for alimony from the wife to cover his monthly expenses.
As the Petrzelka case illustrates, Utah courts look at several legal elements as well as the unique factual circumstances in the given case, in determining an award of alimony. To receive help, guidance, and/or advocacy in addressing your particular alimony issue, call Daniel W. McKay & Associates to speak with a competent, experienced, Utah Attorney.