In this case, the parties raised the matter to appeals for two issues: 1) whether the trial court erred in awarding Wife alimony in futuro of $7,500 per month, and 2) whether Wife is entitled to attorney’s fees.
The parties divorced after a 13 year marriage in which the family was initially solely supported by Wife’s $40,000 annual income. However, at the time of divorce, Husband was earning approximately $850,000 per year and Wife was not employedbut was a full-time student (due to frequent moves but also a mutual decision). The trial court found that long-term alimony was appropriate given Wife’s contribution to Husband’s earning capacity, her inability to achieve his earning capacity despite her efforts at education, and the parties’ relatively high standard of living during the marriage.
At the beginning of the marriage, the husband was a full-time medical student earning no income.Across the husband’s education and career, the parties moved from Georgia to Kentucky to Florida to Ohio, and finally to Jackson, Tennessee. During separation, Wife enrolled in a college to obtain a Bachelor’s Degree in Accounting and hoped to eventually enroll in a Master’s Degree program. Wife was a full-time student at the time of trial.
Husband testified that he planned to move to Florida and his base pay upon moving to Florida after the divorce would be approximately $450,000. Husband admitted, however, that this figure did not account for the bonuses that Husband had historically received and had caused his income to increase substantially.Wife’s sole income at the time of the divorce amounted to approximately $2,000 per year in dividends.
Each of the parties created a budget of estimated forward expenses. During proceedings, each party claimed that the other was controlling the parties’ finances, refusing to permit the other to fund basic expenses. With regard to expenses, Husband claimed as an expense $10,000 per month for savings in the event that he is sued for malpractice and his insurance does not cover the entire award, costs for his parents’ health insurance, considerable maintenance on his car, and large charitable contributions. With regard to Wife’s expenses, Husband contended that they were inflated over historical actual expenses. Husband testified that expenses incurred by Wife following the separation were for extravagant gifts to family that were not representative of the parties’ lifestyle throughout the marriage.
Demonstrating the marital estate and standard of living, the parties had accumulated a level of wealth during the marriage, including two cars, several retirement accounts, and savings accounts. Husband paid off the mortgage of their Jackson, Tennessee home during the pendency of the divorce. As such, the parties had no debt at the time of the divorce and considerable assets. During the marriage, the parties also took several vacations, both in the United States and outside the country.
The trial court made the following statement on the earnings capacity of each party:
Husband’s gross earning capacity is currently about $850,000 per year. His net income based on his effective tax rate for 2016 would be in the range of about $550,000. Husband owes no debt, and will have significant assets from the property division. Wife’s current income is zero essentially, but when she finishes school, if she is able to obtain employment in her field, and achieve a CPA designation, her gross income should be in the range of $55,000 according to testimony. If she pursues a Master’s Degree and achieves it, her earning capacity could increase to $85,000 per year. Thus, there is a significant difference between the Husband’s and Wife’s earning capacity. Their obligations are about the same.
The appellate court made the following conclusion on earnings capacity:
..the evidence does not clearly and convincingly show that Wife did not significantly contribute to Husband’s career and resulting earning capacity. Rather, the evidence supports the trial court’s finding that Wife made tangible and intangible contributions to the Husband’s increased earning capacity.
Considering the factors for spousal support unique to this matter, the trial court found that the alimony in futuro of $7,500 per month alimony was appropriate given: 1)Wife’s contribution to husband’s earning capacity, 2) Wife’s inability to achieve Husband’s earning capacity despite her efforts at education, and 3) the parties’ relatively high standard of living during the marriage. Discerning no reversible error, the appellate court affirmed the trial court in all respects. Also, given the considerable property awarded to Wife in the divorce, the appellate court declined to award attorney’s fees incurred on appeal in this case.
A financial expert witness can significantly assist in the court’s determination of divorcing parties’ ability and need to pay in its determinations for spousal support. The analysis is a complex matter and calls for the expertise and analysis of a financial expert. Refer to our piece, “What Is a Lifestyle Analysis and Why Is it Important?” for more information about the process, analysis, and support that can be provided by a financial expert.
