SPOUSAL SUPPORT SUBCOMMITTEE

To: OSBA FAMILY LAW COMMITTEE

From: ROBERT N. WISTNER, Chair
Spousal Support Subcommittee

Date: January 12, 2004

Re: Final report on new legislation submitted for approval at January 21, 2005 meeting.

AT THE JANUARY 21, 2005, FAMILY LAW COMMITTEE MEETING, WE SHALL ASSUME THAT EVERYONE IN ATTENDENCE HAS READ THIS REPORT AND THE ENCLOSED BILL CAREFULLY. CONSEQUENTLY, DUE TO LIMITED TIME AND MEETING SPACE, WE WILL NOT MAKE A LENGTHY PRESENTATION REGARDING THE CONTENT. BUT, WE WILL ADDRESS ANY QUESTIONS FROM THE FLOOR. AT THE CLOSE OF THE DISCUSSION, MEMBERS WILL BE ASKED TO VOTE ON A MOTION TO APPROVE THE REPORT AND BILL FOR FURTHER CONSIDERATION BY THE OSBA HOUSE OF DELEGATES. DISCUSSION AND MOTIONS TO AMEND WILL BE ENTERTAINED.

After two years of intense study and debate, the Spousal Support Subcommittee finally reached agreement upon the text of a proposal for new legislation designed to create the framework for a unique approach to securing more PREDICTABILITY and CONSISTENCY throughout all 88 counties regarding the DURATION and AMOUNT of compensatory spousal support awards. Enclosed herewith is a copy of that product entitled “A BILL to amend sections 3105.171 and 3105.18, and to enact sections 3105.172 and 3105.181 to 3105.185 of the Revised Code relative to the equitable allocation of the financial consequences that arise from the termination of a marital relationship.”

First, let me introduce the other OSBA members of the subcommittee, all of whom pulled their oars with equal dedication, diligence and creative thought: RANDAL BLOCH, Cincinnati, THOMAS FRIEDMAN, Columbus, MELISSA GRAHAM-HURD, Akron, BARBARA HOWARD, Cincinnati, STANLEY MORGANSTERN, Cleveland, BEATRICE SOWALD, Columbus, and MARK STONE, Beavercreek. Among the members, we had seven Certified Specialists in Family Relations Law, four Chairs of the OSBA Family Law Committee, five members of the OSBA Family Relations Law Specialty Board, and three Editors of leading Family Law publications in Ohio. In addition, we had the benefit of judicial wisdom from JUDGE RUSSELL STEINER, Newark, a Past-President of the Ohio Domestic Relations Judges Association, who volunteered to work with our subcommittee, and his contributions gave us meaningful insights into the thought processes of Judges with domestic relations jurisdiction.

THE PROBLEM – ENORMOUS DISPARITY IN SPOUSAL SUPPORT AWARDS

Everyone understands the problem we set out to address. Currently, 3105.18 authorizes courts to make awards of spousal support that are “reasonable and appropriate,” without giving courts any statutory guidance regarding the meaning of that phrase in terms of duration or amount. As a result, because of the wide discretion granted to courts on this subject, there is an enormous disparity among judges and magistrates in the application of that phrase to cases involving similar facts throughout all 88 counties. Consequently, it is very difficult for trial attorneys to give their clients predictable and reliable advice on this subject, or to negotiate fair settlements in disputes over spousal and child support.

THE SOLUTION – COMBINE JUDICIAL DISCRETION WITH PRESUMPTIONS AND GUIDELINES THAT SET STANDARDS FOR “REASONABLE AND APPROPRIATE”

Initially, we looked at the proposals of the American Law Institute on “Compensatory Spousal Payments” in its recent publication Principles of the Law of Family Dissolution: Analysis and Recommendations, pp. 785-906, Matthew Bender & Co. (2002). We agreed with the ALI thesis that in every divorce case usually both spouses incur some type of loss; but, the losses may be different in type and magnitude for each spouse. Consequently, the primary goal of both the statutory law and the exercise of judicial discretion should be to allocate those losses equitably between the spouses, so that neither spouse is forced to absorb an inordinate share of the losses. However, we disagreed to a considerable extent with the approach advocated by the ALI to solve the problem. In our collective judgment, we felt that ALI relied too much on mathematical formulas, with too many restrictions on the ability of trial lawyers to advocate for clients, and of courts to exercise some discretion in fashioning appropriate spousal support awards.

Therefore, our mission was to seek a more balanced solution that will allow courts and trial lawyers suitable flexibility, and that will promote more predictability and consistency in results among the various jurisdictions. We believe we have succeeded in that venture with the creation of the new “compensatory spousal support award.” The adjective “compensatory” was added to make an award of support appear to be more in the nature of compensation for loss sustained in the allocation of the financial consequences of the termination of a marital relationship.

In addition to the enclosed full text of our proposed Bill, this report includes 13 hypothetical cases that are designed to help the reader understand how this new legislation is expected to work in actual practice. For the sake of time and brevity, these hypothetical cases contain only abbreviated facts sufficient to demonstrate the principal points of interest. Hopefully, they will stimulate more focused questions and comments from readers.

HIGHLIGHTS

Section 3105.171 (Amended). Essentially, the only significant amendment removes the “distributive award” provisions, which are then transferred to new section 3105.172.

Section 3105.172 (New). A “distributive award” is sort of a maverick, because it can look like either an adjustment to the property division to achieve an equitable division, or like a spousal support award to compensate a spouse for some other type of financial loss in a short term marriage (less than 5 years in length). Therefore, we have created a new section to recognize the separate and unique status of the “distributive award,” without any guidelines for determining the nature, amount or duration of such an award. (See Cases 3, 4 and 5.)

Section 3105.18 (Amended). Although it appears like the current law is being eliminated by the extensive deletions, many of the current concepts have been retained by moving or relocating them in some of the new statutory matter. Example: The only essential difference in the text of the deleted definition of “spousal support” in 3105.18(A), and the new definition of “compensatory spousal support award” in section 3105.18(A)(1) is the title. But, because the text is relocated, it must appear as new matter at that place.

Extensive definitions of “gross income” have been added for purposes of spousal support. With a few minor modifications, this definition basically is the same as the definition of gross income in the current child support statutes – with one very important distinction. Section 3105.18(A)(3)(d) eliminates “double-dipping” on pensions and retirement benefits already in pay status by including them only if they “were not previously divided as marital property between the parties, or considered as an offset of marital property between the parties in a division or distribution of property or a distributive award.” (See Cases 1 and 2.)

The limited, current concept of “earning ability” has been replaced with a more comprehensive definition of the “income generating capacity” of each spouse. [See 3105.18(A)(6)].

Section 3105.18(B)(1) makes it mandatory for every court to consider “the impact of all applicable federal, state and local income tax laws upon the cash flow of both spouses.” In other words, software programs like FinPlan’s Divorce Planner would become essential “tools of the trade” for both trial lawyers and courts regarding both child support and compensatory spousal support – all to the benefit of parties, trial lawyers, magistrates and judges.

In section 3105.18(D), the current “duration of the marriage” is replaced with a new contemporary definition of the “length of the marital relationship,” and it is important to understand the scope and operation of this definition. (See Case 5.)

Section 3105.18(E) creates the three basic presumptions for circumstances that may form the predictable basis for a compensatory spousal support award:

1. The loss of ability to maintain the marital standard of living. (See 3105.181 and Cases 6 and 7.)

2. The loss either spouse incurs as a result of that spouse’s personal and financial contribution or investment in the training, education and income generating capacity of the other spouse. (See 3105.182 and Cases 8 and 9.)

3. The loss of income generating capacity incurred by a spouse during the marital relationship, and continuing after termination, arising from such spouse’s disproportionate share, during the marital relationship, of the care of the marital children, or care of the children of the other spouse, or the care provided by a spouse to a sick, elderly or disabled third party, in fulfillment of a legal or moral obligation of the other spouse, or both spouses jointly. (See 3105.183 and Cases 10 and 11.)

PRESUMPTIONS AND GUIDELINES

Sections 3105.181 through 3105.183, inclusive, create rebuttable presumptions regarding the eligibility of either spouse, or both, for an award – PREDICTABILITY that an award should be made under those factual circumstances IN ALL COUNTIES. But, the court retains the power to exercise discretion to deny any award upon making a finding that any presumption has been rebutted by the weight of the evidence. Regardless of whether a claimant spouse qualifies for an award under one, two or all three of the presumptive sections, only one award can be made to the same spouse. If both spouses qualify for awards under different theories, after the duration and amounts are calculated, the court has discretion to offset the awards against each other, if the court chooses to do so. (See Case 5.)

Section 3105.184 provides definition and parameters to what is considered “reasonable and appropriate” regarding the duration and amount of any award by setting forth guideline ranges for categories determined initially by the length of the marital relationship. Nevertheless, the guidelines are not mandatory, because the court still must exercise discretion to select specific figures from within the ranges for the amount and duration of an award. In exercising this discretion, the court may take into consideration the factors stated in section 3105.184(E), which basically are the same factors in the current version of 3105.18.

The critical balance between the exercise of judicial discretion and the goal of creating more PREDICTABILITY and CONSISTENCY under similar factual circumstances IN ALL 88 COUNTIES is achieved in section 3105.184(F), which specifies, “If an award is made pursuant to this section in which the duration or amount deviates from the guidelines set forth in this section, the court shall make written findings of fact that the result would be unreasonable or inappropriate without such deviation.” In other words, the power of a court to exercise wide judicial discretion regarding entitlement, duration and amount of a compensatory spousal support award is maintained, and if an award is made that falls within the applicable presumptions and guidelines, the court is not required to issue any specific findings to justify the award (unless trial counsel requests findings and conclusions under Civil Rule 52). However, if the exercise of judicial discretion produces an award that deviates from the applicable presumptions or guidelines, the court is required to issue written findings that justify the deviation without any request from trial counsel. (See Cases 5 and 7.)

MODIFICATION AND TEMINATION

Section 3105.185 Section 3105.185 deals with the various circumstances encountered in post-decree proceedings to modify or terminate prior awards of alimony, spousal support or compensatory spousal support. The subcommittee’s intent was to reaffirm existing statutory and case law for the most part. The traditional concept of “cohabitation” has been recast as the concept of “sharing a life together,” with a clear focus on the financial relationships of the parties involved. (See Cases 12 and 13.)

CONCLUSION

Therefore, the new statutes preserve the scope of traditional judicial discretion, without imposing any additional workload for issuing written findings to justify an award of compensatory spousal support – unless the court deviates from the presumptions or guidelines on duration or amount. In application, the guidelines produce figures for duration and amount that are “reasonable and appropriate” for the vast majority of all divorce cases in all 88 counties. (See Cases 3 through 12.) Nevertheless, the new statutes allow liberal opportunities for attorneys to advocate for their clients, and for the court to deviate from the presumptions or guidelines, when the weight of the evidence demonstrates that a case has special needs. The subcommittee believes this presents a reasonable compromise that should be acceptable to both the domestic relations bench and bar.

HYPOTHETICAL CASES

1.) Pension excluded from “gross income.” Husband and Wife agreed to property division that included Wife retaining the marital home as an offset to the present dollar value of husband’s private pension which was in payout status. The trial court was to determine compensatory spousal support.

In addition to his pension, Husband had commissions from employment, social security and both taxable and nontaxable interest and dividends.

Applying the statutory definition of “Gross Income,” the court should exclude the private pension income as the asset had been divided as party of the property division [3105.18(A)(3)(d)]. The commissions should be included as the lesser of the past three year average or the last year [3105.18(A)(3)(b)(i)(ii)]. The interest and dividends both taxable and nontaxable should be included as well as the social security payments [3105.18(A)(3)].

2.) Pension included within “gross income.” The parties had a long term marriage of over 30 years. Husband is a retired teacher/principal whose monthly STRS benefit is $4,500.00. Wife has never been employed outside the home. Husband also has self-employment income as a consultant from which he nets about $45,000.00 per year. He pays social security taxes on his self-employment income. There are no minor children.

In determining “Gross Income,” the trial court should include Husband’s STRS benefits as they have not been divided as property [3105.18(A)(3)(d)], and his self-employment income, after deduction of ordinary and necessary business expenses [3105.18(A)(3)]. The self-employment income should not, however, be reduced by the social security payment, as the statute expressly provides that taxes, social security and retirement benefits in lieu of social security do not reduce Gross Income [3105.18(A)(5)(c)].

3.) Distributive Award. George and Gracie were married in June, 2002. At the time of their marriage, George owned his residence outright, as he inherited it from his grandmother. He was a business consultant, earning $150,000 per year. Gracie worked as an anesthetist in Pittsburgh at the time of marriage, earning $35,000 annually, had modest expenses and was able to travel frequently. Gracie also owned her own home at the time of marriage. Gracie moved to Cleveland after the marriage, sold her house and gave away most of her furniture and household goods worth about $5,000, and moved in with George. She used the small net proceeds of the sale of her house ($10,000) for a honeymoon with George. Gracie was not employed after she moved, and did not seek to obtain her anesthetist license in Ohio after the marriage. Gracie provided extensive assistance to George in typing reports for his job and attended numerous business functions with him. The relationship floundered in late 2004 when George had an affair with a co-worker. Gracie filed for divorce in February, 2005. At the time of the trial in June 2005, George earned $125,000 annually, and Gracie had recently taken a part-time job at Wal-Mart earning $6.50 per hour, averaging 32 hours per week, with no benefits.

Because the length of the marital relationship was less than 5 years, Gracie does not qualify for a compensatory spousal support award under any of the three presumption sections. However, Gracie is entitled to a distributive award under §3105.172(E)(2) because she gave up property, her house and furniture, and cannot get it back now. Gracie also gave up occupational opportunities to further the marital relationship. Gracie’s earning potential is significantly less now ($10,816) than it was at the time of the marriage ($35,000), while her contributions to George’s career enhanced his income generating capacity.

The court may make a distributive award to compensate Gracie for her expenditure of the net equity in her house and household goods, as well as lost income production capacity. The court can make an award in installments or in a lump-sum, and can award her a lien on George’s separate real property. The award is not compensatory spousal support and is not taxable, and is not affected by death or remarriage.

4.) Distributive Award, plus compensatory spousal support. Samantha and Dave were married in April 1998. Samantha worked as a long-distance truck driver, earning $40,000 per year and Dave was a machinist at a steel factory, earning $60,000 annually. In June 1998, Dave was laid off. Samantha and Dave decided that he should change his career and become a court reporter. Samantha used all $15,000 in her pre-marital savings account to pay for Dave’s tuition, books and fees at a vocational school. Dave received his diploma in March 1999 and began working for the court, earning $50,000 per year. Samantha became pregnant, quit working in January 2000, and the child was born April 2000. Sam and Dave decided that it would be better for the family for Samantha to be a stay-at-home parent and not return to work right away. Another child came along in September 2001. Samantha resumed working in February 2003 but did not return to long-distance trucking because Dave did not want her to do the required overnight treks. Instead, she became a school bus driver. Dave worked increasingly late hours, working on transcripts and most of the responsibilities for the two young children fell to Samantha. In June 2005, Dave filed for divorce. At the time of trial, Dave earned $57,000 plus approximately $12,000 for transcripts annually, and Sam earned $15,000 as a bus driver.

The court may make a distributive award to Sam for the separate property she expended to pay Dave’s tuition under §3109.172(E)(1). The marriage length was more than 5 years, so the Court may also make a compensatory spousal support award under §3109.183, because Sam has a significantly reduced income generating capacity; she is earning less than 75% of what Dave earns; and, because of her disproportionate share of the child-rearing responsibilities.

The guideline range for the duration of the award is 30% to 40% of the 7-year marriage (2.1 years to 2.8 years) under §3105.184 (C)(1). Under 3109.184(D)(1) the amount of the award may range from 20% to 30% of the difference in the income generating capacities of the parties. The difference in IGC ($69,000 minus $15,000) is $54,000, so an award of $10,800 to $16,200 annually would be appropriate and reasonable. After the spousal support award, child support is calculated. Assuming Dave would claim both children as dependents and Sam has head of household status, if the spousal support is $10,800, Dave would have $33,838 net of taxes, Sam would have $31,824 net of taxes; if spousal support is $16,200, Dave would have $31,012 net and Sam would have $35,231 net.

5.) Length of marital relationship, deviation, Distributive Award, multiple compensatory spousal support presumptions and off-setting awards. Katie and Matt met in college and lived together for 5 years, and had 2 children before their ceremonial marriage on Valentine’s Day 4 years ago. Now, Al is a cute 7-year-old, and his sister, Ann, is 5 ½ years old. After she and Matt decided to live together, Katie dropped out of college immediately, and she worked in retail sales at Macy’s for two year, earning $22,000 when she left the workforce 7 years ago. Matt had just graduated from college when Katie moved in, and he began his career in production at the local television station, advancing to local news anchor at $120,000 per year, plus a clothing allowance of $5,000. Although Katie had not been employed since Al’s birth 7 years ago, she did return to college to complete her education, and received a Master’s Degree in Computer Science 1 year ago. If employed in the field of computer science, Katie could earn $38,000 per year. The cost of Katie’s degrees, after grants and scholarships, was $40,000, which was paid out of Matt’s marital income. However, Katie files a divorce complaint seeking child support and compensatory spousal support, and Matt counterclaims for a distributive award to recover the cost of Katie’s college expenses.

Under 3105.172(E)(2), a presumption arises that Matt may be entitled to a distributive award for “reimbursement” for some of Katie’s tuition, because her education was completed within 5 years prior to the termination of the marriage. This amount would equal one-half of the total costs ($20,000) paid from the marital property and income of the parties, which could be off-set against Katie’s share of property or her compensatory spousal support award.

For compensatory spousal support calculation, “gross income” includes “potential income” that a party would have earned if fully employed as determined by the party’s education [3105.18(A)(9)(a)(ii)]. So, Katie’s income generating capacity should be imputed at $38,000.

The length of the marital relationship starts at the date of the ceremonial marriage, unless the court finds that it would be inequitable to disregard a period of premarital cohabitation by the spouses. However, to include the premarital cohabitation the court must find by clear and convincing evidence that a failure to do so will create an inequitable result [3105.18(D)]. In this case, the court could justify such an adjustment in the “length of the marital relationship” to extend it to 7 or 9 years, instead of only 4 years. Otherwise, Katie might not qualify for an award of compensatory spousal support under 3105.184.

With an adjustment finding for a 9-year marital relationship, Katie would qualify for an award of compensatory spousal support for loss of standard of living pursuant to 3105.181.

Compensatory spousal support can be awarded when one spouse made an investment of human capital in the income generating capacity of the other spouse; there was a 5-year marital relationship; and the income generating capacity of the claimant spouse is less than 70% of the other spouse’s income generating capacity [3105.182(B)]. Katie also qualifies for this type of award, because her income generating capacity is only 30% of Matt’s in comparison. However, 3105.184(A) provides that only one award may be made, regardless of the numbers of different theories that may be applicable.

The duration range of a guidelines compensatory spousal support award set forth in 3105.184 for a marital relationship of 5 – 10 years is 30% - 40% of the length of the relationship, and the amount range is 20% - 30% of the difference in the income generating capacity of the parties. In this case, the duration range would be 2.7 to 3.6 years (9 x 12 = 108 x 20% = 21.6/12 = 2.7, or 108 x 30% = 43.2/12 = 3.6), and the amount range would be $17,400 to $26,100 ($125,000 – 38,000 = 87,000 x 20% = 17,400, or 87,000 x 30% = 26,100).

Including the imputed income of Katie, the combined earning ability of the parties is $163,000, with the percentage division being Katie 23.4% and Matt 76.6%. Assuming a compensatory spousal support award of $21,750 for 3 years, Matt’s child support would be $13,872 (if frozen at $150,000 level), subject to modification upon termination of the spousal support.

The Wilsons had three children, Albert, 25, Bill, 23, both of whom were college graduates. Their third child, Carol, 19, just graduated from high school, is living at home and expecting to start college. During the marriage, Ann Marie, in addition to being chief cook, chauffeur and bottle washer, was active in the children’s school and sports activities, as well as in her church. While not holding any paying jobs, she did volunteer work in the church preschool office.

Now that Carol was out of high school, after 27 years of marriage, John Paul decided he was unhappy, and that he had been unhappy for many years, so he filed for divorce. His filing threw Ann Marie for a loop, since she had no idea there was a problem. In addition, she was not looking forward to turning 50. Ann Marie now wanted to return to college, and the vocational expert’s evaluation found her current earning ability is only $19,760 per year.

The presumptions in 3105.181 and 3105.183 would entitle Ann Marie to a compensatory spousal support award of indefinite duration under 3105.184. Using only John Paul’s $82,000.00 base, and the vocational expert’s opinion, the guideline range for the amount of an award would be as follows: Difference in Income Generating Capacity $62,240 ($82,000 – 19,760) x 40% = $24,896 ($2,074/month) to x 50% = $31,120 ($2,593/month).

If no income is imputed (and, of course, the court maintains jurisdiction to modify when and if she gets a job), then a straight percentage would be anywhere between $41,000.00 (50%) to $32,800.00 (40%). It is possible that if the court does not impute income, it probably would default to the 40% range $32,800.00 a year (($2,733/per month), which is $140.00 per month more than 50% of an income generating difference. For simplicity of presentation, no consideration has been included regarding property division, monthly expenses or income taxes.

After 7 years, Betty did make partner and she did get pregnant. Not anticipated, however, was that Betty was having twins. Towards the end of the pregnancy, Betty started having problems and the twin boys were born prematurely. Due to their delicate condition and the simultaneous demands of 2 babies, both parents took family leave to stay home with the children. Tom took to the care and the feeding of the twins better than Betty, who was glad, after she recuperated, to get out of the house. Consequently, Tom agreed to be the stay-at-home parent, at least until the children were in school. He did not renew his teaching contract and Betty went back to practicing law, comfortable with knowing the children were in excellent care.

When the twins were 5 years old, the parties had them tested for entrance into kindergarten; but, they were deemed not ready. At that point, Tom and Betty agreed that Tom would home school the children and see how they faired. By now, Betty’s income was sufficient to maintain the family very comfortably. The problem in paradise came when Tom learned that Betty not only loved her job, but also loved someone else. It appears she had been having a relationship with Jim, an attorney she met at a seminar 2 years earlier. In the ensuing divorce, the presumptions in 3105.181 and 3105.183 indicate that Tom should be entitled to a compensatory spousal support award for a definite duration of time.

By the time of the divorce filing, the children were 6 years old and doing well with home schooling. Tom claimed his earning capacity at that time was nil, since he could neither work and home school at the same time, nor could he leave the children alone at night to get a night job. Tom argued he needed to have enough income from Betty to remain in the home, the only home the children knew. In addition, since the parties had agreed that continuance of home schooling was the best education available, Tom needed spousal support in addition to child support for at least another 12 years.

Under the guidelines in 3105.184, a 14-year marriage fits into the range of a 10 – 15 year marriage, which indicates a duration range of 35% - 45% of the length of the marital relationship, and translates into a range of 4.9 years (168 months x 35% = 58.8 months) to 6.3 years (168 months x 45% = 75.6 months).

The arguments for a duration deviation outside the guidelines are, of course, the special needs of the children. Tom has sacrificed his career for these years, and continues to be willing to do so. When he returns to work, he will have a lesser paying job. The deviation would be pursuant to the factors under, for instance, 3105.184(E)(2), (E)(3), (E)(7), and (E)(8). The judge could exercise discretion to expand the duration by finding specifically that a duration of less than 10 years is inequitable, although 12 years would take the children to graduation.

8.) Loss of income generating capacity from investment in other spouse’s career. Gracie and Allen met in college and married in June 1996, the month after they both graduated from college. Allen had graduated in pre-med and was going to be attending the University of Cincinnati medical school. Gracie had graduated with a liberal arts degree and obtained a sales position with a medical equipment company, Heart Tech. Gracie worked long hours, traveling often. After three years, Grace was offered the opportunity to take a substantial promotion, but it would have meant relocating to Denver, and Allen was unwilling to do so. Instead, he decided to do both his internship and residency in Atlanta, meaning that Grace had to leave her job and find a new career.

Gracie was hired by Coca Cola in their Human Resources Dept. Her salary was significantly less than what she had made in sales, but it was still enough to be able to keep up with the family expenses, including the payment of Allen’s school loans. Allen was offered a position back in Cincinnati at a starting salary of $175,000, which he and Gracie decided he should take. Several months before their scheduled move, Gracie was offered a new position at Coke. It would have increased her salary from$45,000 to $53,000. Not only did she have to turn down the promotion, but she tendered her resignation, since she and Allen were moving back to Cincinnati.

One month after moving to Cincinnati, Gracie broached the subject of starting a family. Allen told her that he very much wanted to, but not with her. He told her that he had met the love of his life, and that he would be moving out of the apartment they had rented until they found a new home. Gracie was shocked – no home, no career, no job and no husband.

In seeking an award of spousal support for having invested in Allen’s income-generating capacity, Gracie must establish: (a) that her income-generating capacity is $122,500 or less ($122,500 is 70% of Allen’s $175,000 income-generating capacity); and (b) that she has invested in Allen’s career in a manner that adversely affected her ability to forward her own career. If the Court follows the proposed statutory guidelines, Gracie will receive spousal support of a definite duration (between 2.4 and 3.2 years) in an amount ranging from $26,000 per year ($2,167 per month) to $39,000 per year ($3,250 per month), based on Gracie having an income-generating capacity of $45,000 per year. The Court may still award no spousal support, or may vary from the guidelines either as to duration or amount, so long as it makes findings of fact to support its determination that following the guidelines would be unreasonable or inappropriate.

9.) Long term marriage, loss of standard of living and income generating capacity.
Pat and Trish were married in 1981. Trish had been a school teacher and she continued to do so early in the marriage, but at Pat’s urging, she stopped teaching after the end of the 1985-86 school year. They had tried to have children but were unsuccessful, and Pat buried himself in his career. Pat was an architect. Initially, he worked for the City of Toledo, but in 1983 he was offered a position with the private firm of Glass City Architects. As part of his job, Pat had to do a lot of entertaining. This entailed not only dinners out, but a significant amoPat and Trish were married in 1981. Trish had been a school teacher and she continued to do so early in the marriage, but at Pat’s urging, she stopped teaching after the end of the 1985-86 school year. They had tried to have children but were unsuccessful, and Pat buried himself in his career. Pat was an architect. Initially, he worked for the City of Toledo, but in 1983 he was offered a position with the private firm of Glass City Architects. As part of his job, Pat had to do a lot of entertaining. This entailed not only dinners out, but a significant amount of entertaining in their home, as well as out-of-town trips to meet with prospective clients. Pat insisted that Trish accompany him on the trips and the in-town dinners, saying that she was better PR than the firm could ever buy. When they entertained at home, Trish did it all, usually without the help of a caterer. Eventually, after 20 years with the firm, Pat was named managing partner. His annual income was $250,000. Trish has not kept up her teaching certification.

The parties mutually agreed to separate in 2004, after 23 years of marriage. Trish is now 48 years old and Pat is 49. In order to receive an award of spousal support for having invested in Pat’s income-generating capacity, Trish must establish: (a) that her income-generating capacity is $175,000 or less ($175,000 is 70% of Pat’s $250,000 income-generating capacity); and (b) that she has invested in Pat’s career in a manner that adversely affected her ability to forward her own career. If the Court follows the proposed statutory guidelines, Trish will receive spousal support of a definite duration (between 9.2 and 13.8 years) in an amount ranging from $87,500 per year ($7,262 per month) to $112,500 per year ($9,375 per month), based on Trish having no income-generating capacity at this time. The Court may still award no spousal support, or may vary from the guidelines either as to duration or amount, so long as it makes findings of fact to support its determination that following the guidelines would be unreasonable or inappropriate.

10.) Loss of income generating capacity from long term child care. Husband and Wife have been married for 18 years. The parties’ children are 16 and 14 years of age. At the time of the marriage Wife was working as a nurse’s aide making $15,000 per year and going to night school to obtain her nursing degree. Had she attained the degree the evidence shows that she could be making $50,000 or more per year as a full-time nurse. She abandoned both the job and the schooling after the birth of their first child and did not re-enter the workforce until the youngest child turned 12. Since then, Wife has been able to work her way up to making $40,000 per year working as a manager of a retail service company. Husband has worked the entire marriage for the same company, and has risen to a salaried position making $65,000 per year. At trial Wife DOES NOT make a claim for a compensatory spousal support award based on her loss of standard of living (new R.C. 3105.181), as her current income generating capacity is more than 60 per cent of Husband’s. However, she does make a claim for a compensatory spousal support award based on her loss of income generating capacity from an extended period of child care (new R.C. 3105.183), as her current income generating capacity is less than 75% of Husband’s.

So long as Wife convinces the court that (a) her current income generating capacity is $48,750 per year or less ($48,750 is 75% of Husband’s income generating capacity of $65,000), (b) that she incurred a loss of income generating capacity during the marriage as the result of the disproportionate share of the care of the children, and (c) that her loss of income generating capacity has not been restored by the time of the divorce, she establishes the presumption that the court is going to award compensatory spousal support to her. If the court follows the guidelines of the proposed statutes, the spousal support award will be of definite duration (between 7.2 years and 10.8 years) and in an amount ranging from $7,500 per year ($625 per month) to $10,000 per year ($833 per month). The court still has the right to make no award of compensatory spousal support, or to make the award for less than 7.2 years, more than 10.8 years, less than $625 per month or more than $833 per month if the court makes findings of fact that support its determination that following the guidelines would be unreasonable or inappropriate.

11.) Loss of income generating capacity from care of spouse’s mother. Husband and Wife have been married for 9 years, this being both parties’ second marriage. At the time of the marriage Wife had an MBA and was making $50,000 per year. However, at the outset of the marriage she agrees to quit that job in order to stay home and take care of Husband’s invalid mother. Nine years into the marriage, Husband’s mother passes away, which death causes him to examine his life and leads to his decision to end the marriage. At the time of the divorce, Husband is making $100,000 per year.

The case drags on in court for over a year, during which time Wife miraculously secures a position with an up and coming entrepreneur who starts her at a salary of $65,000. At trial, Wife abandons her claim for a compensatory spousal support award based on loss of standard of living but instead asserts a claim based on loss of income generating capacity from an extended period of care of others (Husband’s mother). She asserts that had she stayed in her original job, she would be making $100,000 or more by now. Husband argues that Wife had reached the pinnacle of her career in her old job at $50,000 per year and that she is better off now than she would have been had she stayed in her previous job.

So long as Wife convinces the court that (a) her current income generating capacity is $75,000 per year or less ($75,000 is 75% of Husband’s income generating capacity of $100,000), (b) that she incurred a loss of income generating capacity during the marriage as the result of the disproportionate share of the care of Husband’s mother, and (c) that her loss of income generating capacity has not been restored by the time of the divorce, she establishes the presumption that the court is going to award compensatory spousal support to her. If the court follows the guidelines of the proposed statutes, the spousal support award will be of definite duration (between 2.7 years and 3.6 years) and in an amount ranging from $7,000 per year ($583 per month) to $10,500 per year ($875 per month).

If the court determines that in fact Wife has not suffered a loss of income generating capacity, the presumption is not met. Furthermore, even if the court finds the presumption of an award to have been met, the court also has the discretion to make no award of compensatory spousal support, or to make the award for less than 2.7 years, more than 3.6 years, less than $583 per month or more than $875 per month if the court makes findings of fact that support its determination that following the guidelines would be unreasonable or inappropriate.

12.) Modification from change of financial circumstances. Husband is 60, wife is 57. They had been divorced 6 years after a 30-year-marriage. At the time of their divorce, husband was earning $190,000 a year as vice-president of the major department in a corporation, and wife was earning $25,000 a year as assistant director of the Food Bank. Following application of the guidelines, he was paying $6,875 a month in spousal support for an indefinite duration. Now, his department has been off-shored. He can take a transfer to India and a decrease in pay to $125,000 a year, or take a job with XYZ Corporation and $150,000 a year. Meanwhile, wife has become a director of the Food Bank and is earning $30,000 a year. Husband takes the job with XYZ Corporation, and, pursuant to new ORC 3105.185, files a motion to have his spousal support modified, since the decree contained a provision for modifiability.

After trial, the court found that there was an involuntary change of circumstances from the time of the initial Decree, and that their income generating capacities are now $150,000 per year and $30,000 per year respectively. The court applied the statutory guidelines and factors from new ORC 3105.184 ($150,000 - $30,000 = $120,000 x .5 = $60,000 ÷ 12 = $5,000); reduced husband’s spousal support to $5,000 per month for an indefinite duration; and found that there was no good cause to deviate from the guidelines figure.

13.) Termination for “sharing a life together” with surprise result. Husband is 46, wife is 48. They have been divorced for 2 years, and at that time they had been married for 14 years. Husband is on the hook for spousal support for a definite term of 3 ½ more years and $400.00 per month. At the office Christmas party his friend’s wife says, “I hear Roxie is now living with her yoga instructor.” Surreptitiously, he gets a little more information, and his attorney files a Motion to Terminate Spousal Support, pursuant to new ORC 3105.185(H) on the ground that Roxie and her instructor have “shared a life together as a couple for more than six months.” There is a clause in their Decree permitting modifiability which, by statutory definition, includes termination.

The trial court found Roxie and her yoga instructor each live in adjoining halves of a duplex. Really adjoining! So adjoining, that the court found Roxie and her yoga instructor operated a “common household.” However, in applying the other statutory factors, the court could find neither economic interdependence, nor economic dependence, and no intermingling of financial obligations. They have separate bank accounts, separate utilities, and the like. Poor husband paid his lawyer and lost. Smart Roxie! She saw a lawyer before she and her yoga instructor moved into the duplex. This is an example of a trial court exercising judicial discretion to deny a motion to terminate because the moving party failed to meet his burden of proof regarding the necessary statutory factors.