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Colorado Alimony and Divorce: Potential 2014 Changes (Part 2)

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In February 2013, we published the first segment of this posting regarding potential changes coming to Colorado divorce law and the issue of alimony, more properly termed “maintenance.” The rumors still persist among Denver area family law attorneys, that our alimony statutes will be changing, commencing 2014.

Part 1 of this post discussed changes related to the creating of a guideline table, similar to child support statutes, setting forth a framework for judges to look at related to lengths of time that an alimony award should run and percentage amounts to be received by the payee spouse. The posting also dicussed another potential change coming to the Colorado maintenance statute related to termination or suspension of maintenance based on the recipient co-habitating. In this Part 2 posting, the remaining significant, potential statutory changes to be discussed stemming from House Bill 13-1058 include definitions of income, provisions for the protection of persons not represented by an attorney, and a rebuttable presumption that retirement at “full retirment age” is a good faith basis, or reason, to modify a maintenance award.

Under the current alimony statute, C.R.S. 14-10-114, there is no concrete definition of income. In part, the current maintenance statute has deferred to C.R.S. 14-10-115 for such definition. If changed, the alimony statute will now have a definitive list of what is income for maintenance purposes, including language related to reductions for child support obligations, the ability for the court to impute income to someone, and definitions of volutary unemployment or under-employment. Like the child support statute, the list defining income is lengthy, and can include most sources, such as income from employment, self employment, retirement or pension pay, interest, dividends, Social Security payments, workmen’s compensation, monetary gifts, lottery winnings and more. As practicing Colorado divorce lawyers, we have largely, though such has been somewhat unwritten, deferred to the child support statute for guidance as to what a court would, or might, consider income for alimony purposes anyway. That being said, it would now be set forth in black and white, for all to see, with little grey areas to argue over.

The next potential change to the Colorado maintenance statute relates to built in protections for a person not represented by an attorney. Currently, the courts have had the ability to step in and assert their input regarding whether an award of alimony, or the waiver of alimony, is fair. Cases in which a court will actually undo an agreement without one of the parties raising the issue are few and far between. I cannot say that I have ever actually seen a court disturb a maintenance agreement. Furthermore, when parties are waiving the right to receive maintenance, they are generally setting forth, whether in writing or orally in court, that they are freely and voluntarily making the waiver. If the House Bill is passed, courts will not be allowed to approve an agreement waiving maintenance or an agreement regarding maintenance which does not follow the guidelines, unless the unrepresented party has specifically indicated that he or she has been made aware of the guidelines. In practice, this will mean that attorneys will now need to make sure that they provide the other side, if unrepresented, with a copy of the guidelines prior to having them sign an agreement. In theory, if there are two parties to a divorce, both of whom have no attorney, they will need to do the same for the courts to approve any agreement. In essence, this creates a safeguard for people without attorneys. It also creates one more step that must be taken to get your divorce completed.

The final change to be discussed relates to modifications of maintenance, or in theory even establishment of a maintenance award, as relates to retirement. Currently, one of the more common times in which a party seeks to modify an alimony award comes when the payor is retiring. One would presume that at 65 a person should automatically be entitled to lower his or her maintenance payment based on the fact that he or she wishes to retire and that such will reduce his or her income. This is not always the case and can lead to costly litigation. There is case law indicating that retirement at the normal age for retirement in the worker’s industry should be considered “good faith” for purposes of dealing with alimony. If changed, statute will now specifically indicate that a payor spouse whose income goes down due to retirement is entilted to a rebuttable presumption that the retirement is in good faith. The Bill also goes on to define what “full retirement age” means, indicating that it means the age at which “full benefits” could be received from social security. As people sometimes elect to retire early, let’s say at 59, believing they can then lower their alimony payments, the Bill also curtails such by indicating that early retirement will not be a basis to create “good faith” retirement for purposes of lowering alimony. Though the proposed new statute operates to a degree along the same lines of how these issues are dealt with today, it would bring clarity on the subject. In turn, litigation over the issue of whether someone can retire and lower his or her maintenance payments.

In assessing the potential changes set forth in both Part 1 and Part 2 of this article, my sentiments are mixed. The subject of alimony has been, perhaps, the most grey of divorce topics in terms of knowing outcomes, or what each court will do regarding any given facet. The idea of creating a guideline or table related to amounts and duration of maintenance may very well take that grey out of the mix. Conversely, some courts, though not outright bound by the guidelines, may feel compelled to follow them or find such to be the easy way out of resolving a maintenance dispute. The problem that may arise is that each family and their financial circumstances do not always fall into a neat, tidy box or formula. As such, the concern becomes that payors and payees with unique circumstances may not get fair results based on such. Aspects of the Bill clarifying income, procedures, and modifications are long over due. Perhaps the second most radical change related to co-habitation is a novel approach. My guess is that this will lead to a new level or layer of litigation related to proving someone is co-habitating. In sum, this may be a good start. Nothing is perfect, but it seems work still needs to be done. For now, we wait to see if 2014 brings these radical, and not so radical, changes to the world of Denver divorce attorneys.