Considering Major Maintenance Law Changes in the Mediation Context – Part 2

Considering Major Maintenance Law Changes in the Mediation Context - Part 2 By Sanford E. Balick{4:36 minutes to read} As anticipated in my last blog, on September 25, 2015, Governor Cuomo signed the spousal maintenance (née alimony) amendments. Changes to Temporary Maintenance calculations will be effective on October 25, 2015, while the balance of the bill’s provisions will become effective on January 23, 2016.

The legislative goal of promoting fairness through greater consistency in the amounts and duration of maintenance awards prompted these changes. The substantially amended law will continue to classify and calculate maintenance in two categories:

  • Temporary Maintenance (for the period between the filing of an action and final judgment); and

  • Post-Divorce (from the judgment date forward).

The law has important and helpful implications for those pursuing a mediated divorce in that the amounts potentially payable and the duration of these payments should become more predictable. Spouses confronting divorce will have something more concrete to work with than is otherwise provided by the familiar headlines trumpeting maintenance awards involving the rich, famous and notorious.

Armed with better information on the potential viability and value of maintenance claims, spouses participating in divorce mediation are positioned to be better negotiators. Attorneys will be able to provide more accurate information in just how the amended maintenance laws will impact their clients’ particular circumstances.

The amendments provide the courts with two post-divorce maintenance formulas by which “Guideline amounts” of maintenance are generated. The formulas vary depending upon whether child support is to be paid in the particular situation. Courts are vested with substantial discretionary authority to augment Guideline awards beyond a specified income threshold or “cap” (initially $175,000) that will be subject to biennial inflation adjustment.

Through use of an anticipated online calculator, determining whether maintenance would be payable at all, and if so, for how much, is relatively easy to determine. The conditional “relatively” reflects the fact that, although the formulas are income-based, very special definitions of income apply.

The income definitions are provided, as in the past, with reference to New York’s Child Support Standards Act (CSSA), whether or not there are minor children in the family. CSSA definitions vary significantly from IRS or even the New York State’s tax law definitions of income.

Important deductions from income, which do not mirror those available on federal and state tax returns, include, most typically, Federal FICA taxes and City of New York/Yonkers taxes.  There are other potentially significant income deduction categories, some not well-defined, which may be available in a particular case. A lawyer is best suited to advise on these and other questions about the amended law.

The law also clarifies an important two-step procedure where the payment of child support is concerned.  The formula-based maintenance calculation is performed first, followed by the child support calculation. Although the child support definitions of income are the same as those used above, an important further adjustment is mandated in the child support calculation:  the maintenance Payer’s income is adjusted downward by subtracting the amount of maintenance to be paid. At the same time, this sum is added to the recipient’s (Payee’s) income.

In a mediated divorce, the parties are not bound by the formulas. Not only may they agree on the amount of maintenance or even to pay no maintenance at all, according to their own standard of fairness, but they may also determine the period of time for which any agreed upon figure will be paid.

The amended law’s duration guidance will be explored in addition to other features, next time.

Sanford (Sandy) Balick, Attorney & Mediator, NY Sandy Balick signature
Sanford E. Balick, Esq.
Founder & Principal Mediator
Consensus Point Mediation, LLC.

Phone: (646) 340-3434
Email: ConsensusPointLLC@gmail.com
www.ConsensusPointmediation.com
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