In-Depth: 2014 Colorado Maintenance Act

- Written by Ciancio Ciancio Brown, P.C. Attorney Nathan F. Bucar

STATUTORY GUIDELINES

On January 1, 2014, Colorado enacted a new spousal maintenance bill, which repeals and replaces C.R.S § 14-10-114 of the Uniform Dissolution of Marriage Act. The new statute became effective for cases, filed on or after January 1, 2014, in which the initial determination of maintenance is at issue. Parties to same-sex marriages, under the new Colorado Civil Union Act, are included in this group. The new statute has been the subject of extensive debate because it contains advisory guidelines for determining spousal maintenance, which could be applied as a merely guiding factor for the Court's determination or could be applied strictly, similar to child support guidelines found in C.R.S § 14-10-115.

The guideline amount is determined by calculating 40% of the higher-earning party's monthly adjusted gross income, and then subtracting 50% of the lower-earning party's monthly adjusted gross income. However, the resulting maintenance amount, when added to the recipient's gross income, may not exceed 40% of the combined monthly adjusted gross incomes of both parties. The duration of the maintenance increases based on the duration of the marriage, pursuant to the chart found in C.R.S. § 14-10-114.

The guideline formula is specifically considered for marriages of 3 - 20 years, where parties have a combined gross income of $360,000, which amount directly corresponds with the child support guidelines. Arguably, the court will still consider the guideline amount for marriages that are longer than 20 years, less than 3 years, and over $360,000, even if not specifically provided for by statute. For instance, in short-term marriages of 3 years or less, the court may award maintenance when the parties' circumstances and the distribution of marital property are insufficient to achieve an equitable result. Upon written or oral findings, the court may consider the guideline for determining the amount, as well as other relevant factors that may pertain to the case.

It seems relatively apparent, from the terms of the maintenance statute, from conferences with judges and magistrates, and from trials that have occurred since January 1, 2014 that the courts intend to consider the formula as a mere factor in the determination of maintenance, instead of guidelines that will be strictly followed. This approach follows largely the language of the statue. Although the guideline provides a specific formula, the statute continues to allow courts broad discretion in its ultimate application and specifically provides that the maintenance guidelines for both the amount and the duration do not create a presumptive award. The award must be fair and equitable to both parties, considering their respective financial circumstances. By way of comparison, the child support guidelines do create a presumptive amount for child support and deviation from that amount must be supported by the facts of the case and be in the best interests of the child.

Although there have been substantial changes to the maintenance statute, many of the important components remain intact, such as the threshold requirement for maintenance that must be satisfied before the guideline and other "factors" are considered. To meet the threshold, the court must find that the spouse seeking maintenance lacks sufficient property, including marital property, to provide for his or her reasonable needs and is unable to support himself or herself through appropriate employment or is a custodian of a child such that it is inappropriate for the spouse to be required to seek employment outside the home. It is important to note that the threshold standard is very subjective. Opinions can vastly differ with respect to what constitutes "reasonable needs," "unable to support themselves," and "appropriate employment," and the interpretation of these terms vary between parties, attorneys, judges, and between different states with similar maintenance provisions. The court also maintains its discretion to award additional marital property to the spouse requesting maintenance to alleviate the need for or to reduce the amount and term of maintenance.

In addition to the maintenance formula, other factors that the court will consider include the current statutory factors and other factors developed by case law. The statutory factors are:

  1. Financial resources of the recipient and payor spouse, including actual or potential income from separate or marital property or any other source, and ability of each spouse to meet needs independently;
  2. Lifestyle during the marriage;
  3. Distribution of marital property, including whether additional property may be awarded to reduce or alleviate the need for maintenance;
  4. The income, employment, and employability of each party obtainable through reasonable diligence and additional training if necessary, and any necessary reduction in employment due to the needs of an unemancipated child or other circumstances;
  5. Whether one party historically has earned higher or lower income than at the current time, and the duration and consistency of income from overtime or secondary employment;
  6. Duration of the marriage;
  7. Amount of temporary maintenance and number of months that temporary maintenance was paid to the recipient spouse;
  8. Age and health of the parties, including consideration of significant healthcare needs or uninsured or unreimbursed healthcare expenses;
  9. Significant economic or noneconomic contributions to the marriage or to the economic, educational, or occupational advancement of a party, including but not limited to completing education or job training, payment of separate debts, or enhancement of the other spouse's personal or real property;
  10. Whether circumstances warrant a nominal award to preserve a future claim; and
  11. Any other relevant factors.

Some proponents of the new maintenance statute argue that these guidelines will help promote settlements by introducing a formula, from which a reasonable expectation of the maintenance award can be estimated, based on the income of the parties and the length of the marriage. Many detractors claim that settlement will be harder to achieve because the maintenance recipient will be disinclined to accept less than the guideline amount, meaning the payor will have nothing to lose by pursuing litigation.

Uncertainty continues to linger around the new maintenance statute. Therefore, it is more important than ever to understand your surroundings, such as the jurisdiction your case is in and the presiding judge's interpretation of the statute, as these seemingly ancillary factors may have a substantial impact on the outcome of your maintenance case.

OTHER IMPORTANT PROVISIONS

For parties who are already divorced and are paying or receiving maintenance, the standard for modifying maintenance has not changed and still requires "a substantial and continuing change of circumstances" that would render the original award unfair. The changes contained in the new statute do not constitute a substantial and continuing change of circumstances for purposes of modifying maintenance orders that were entered before January 1, 2014.

An award of maintenance still terminates on the death of either party, remarriage of the party receiving maintenance, or by a subsequent court order. There has been confusion concerning whether a maintenance award automatically terminates upon the expiration of the court ordered maintenance term. It is now clear that maintenance terminates at the end of the specified maintenance term, unless a motion for modification is filed before the expiration of the term.

The new statute also provides additional guidance for parties who are approaching or at retirement age. A spouse who has been ordered or may be ordered to pay maintenance and whose income is reduced or terminated due to retirement at full retirement age, is entitled to a rebuttable presumption that the retirement is in "good faith" and not for the purpose of avoiding his or her maintenance responsibility. Full retirement age is defined as the age at which the payor spouse would be eligible for full Social Security benefits. For the purposes of the rebuttable presumption, full retirement does not include early retirement, if available through his or her employment. If a party believes that this provision may apply to his or her case, it is important to understand that maintenance does not automatically reduce or terminate based upon qualified retirement, and a motion to modify maintenance must be filed.