Is Spousal Maintenance Modifiable, and if so, How is that Accomplished
On March 8, 2015, we wrote a blog titled, “A Look at Spousal Maintenance in Indiana,” whereby we explained the different circumstances in which a party to a divorce can be ordered to pay spousal maintenance. In Indiana, the circumstances for such an award are very limited. As a quick refresher, the following are the only circumstances under Indiana law where spousal maintenance can be awarded:
- Physical or Mental Incapacitation. If a spouse is physically or mentally incapacitated, a court may order maintenance is necessary during the period of incapacitation if that incapacitation materially affects that spouse’s ability to support him or herself. The key word here is “may,” which leaves maintenance entirely up to the discretion of the court. The courts can take in to account the disabled spouse’s ability to earn income as well as the other spouse’s ability to provide for maintenance.
- Child’s Physical or Mental Incapacitation. If the parties are the parents of a child who is physically or mentally incapacitated, the court mayfind an award of maintenance appropriate if:
- The incapacitation requires the spouse needing maintenance to forego employment, and
- The spouse lacks sufficient property, including marital property, to provide for the spouse’s needs.
- Rehabilitative Maintenance. Courts can award what is known as rehabilitative maintenance for a period of up to 3 years maximum if the spouse requesting it lacks an ability to support himself or herself due to lack of education or training. The court will consider 4 factors:
- The education level of each spouse at the time of marriage and at the time of divorce/legal separation,
- Whether there was an interruption in the education, training, or employment of the spouse seeking maintenance as a result of homemaking and/or child care responsibilities,
- The earning capacity of each spouse. The courts will consider educational background, training, employment skills, work experience, and length of presence in or absence from the job market, and
- The time and expense necessary to acquire sufficient education or training to enable the spouse seeking maintenance to find appropriate employment.
If a court has awarded an order for spousal maintenance, many people want to know if that order is modifiable. In many cases, such a maintenance award is modifiable. The Indiana Court of Appeals has referenced that, once a spousal maintenance order has been issued, modification could only occur upon the showing of changed circumstances so substantial and continuing as to make the terms of the order unreasonable. In cases involving the incapacity of the former spouse or incapacity of a child to the parties, it is likely that a spousal maintenance award can be terminated when the former spouse’s or the child’s incapacity no longer exists. For example, if there was some sort of disease, syndrome, or other similar mental or physical diagnosis leaving a spouse unable to be gainfully employed, when that spouse’s condition ceases and he/she is able to re-enter the work force, then spousal maintenance would no longer be reasonable. Further, even if the incapacity continues, but that party begins working and is able to support him or herself, then the maintenance award could also be modified or terminated. However, the Indiana Court of Appeals recently had to decide whether there are circumstances outside of a party losing his/her incapacity or becoming able to support him or herself that would warrant a modification or termination of a spousal maintenance award.
In In Re Marriage of Gertiser, the trial court ordered husband to pay wife, who was blind, incapacity-based maintenance in the amount of $1,182.50 per month. Wife subsequently remarried to another person and so husband filed a petition to terminate his spousal maintenance obligation claiming that wife had the means to support herself. At the time husband filed the petition, he was earning approximately $12,000 more per year than when the spousal maintenance award was originally issued. Further, wife was still disabled, was still receiving Social Security Disability Income, and she occasionally worked a part-time position, but never earned more than $1,200.00 per year. The trial court declined to modify husband’s spousal maintenance obligation under the rationale that wife’s personal earning ability and incapacity had not improved since the time of the divorce. After husband appealed, the Indiana Court of Appeals reversed the trial court’s denial of the modification. The court stated that since the focus of the statute for incapacity-based maintenance was on the spouse’s ability to support him or herself, modification of a spousal maintenance obligation is based on a change in the receiving spouse’s income. A change would need to be permanent and definite to warrant the modification. The court did note the trial court’s findings that wife’s ability to earn income had not changed; however, it found that the trial court abused its discretion by denying husband’s petition to modify because it did not consider the substantial income and assets now available to wife through her new husband. Wife’s new husband earned around $163,800.00 per year and she and the husband shared bank accounts and financial assets in excess of $600,000.00. As such, the court found wife’s marriage to be a substantial and continuous change in circumstances warranting husband’s spousal maintenance obligation to be terminated.
The more fact-sensitive cases regarding whether a spousal maintenance award is modifiable is when such an award is made by agreement of the parties. Although the above instances of spousal maintenance are statutorily based, it’s always a possibility for one spouse to agree to pay the other spouse maintenance even if an incapacity doesn’t exist and even if the court couldn’t have awarded maintenance pursuant to Indiana law during a final hearing in a divorce case. Typically, in such a case where a maintenance award is issued pursuant to an agreement and the award is not one that a court could have issued under Indiana law, then the award is not modifiable unless the agreement specifically allows for it to be modified. The court expanded upon such a circumstance in Pohl v. Pohl.
In Pohl v. Pohl, the wife was the main breadwinner during most of the parties’ marriage. In 1996, husband suffered a back injury resulting in him receiving Social Security Disability income as his sole individual income. In March 2009, the parties divorced pursuant to a settlement agreement; however, said agreement did not have a provision for spousal maintenance. In May 2009, the parties entered an addendum to their settlement agreement whereby wife would pay husband spousal maintenance in the amount of $4,000.00 per month beginning June 2013, and continuing thereafter until further order of the trial court or agreement of the parties. The parties then entered into another addendum because the first one had the beginning date being June 2013, which was a mistake because it was tied to the parties’ high school child’s graduation date rather than the date on which he would be emancipated. Wife was earning at least six digits when entering into this addendum. Then in October 2012, just months before the first spousal maintenance payment was to be made, wife filed a petition to modify the spousal maintenance award from $4,000.00 to $1,000.00 per month, citing the changes to be that husband’s annual Social Security Disability income increased from $5,000.00 in 2009 to at least $22,000.00 in 2012, because the husband, the parties’ child and husband’s fiancé moved into wife’s home, and because husband’s fiancé earned a substantial income. The trial court denied wife’s request to modify her spousal maintenance obligation, concluding that the agreement was not intended to be modified and could only be modified upon a showing of fraud, duress, or mistake. The appellate court affirmed the trial court’s decision.
The Indiana Supreme Court vacated the order and granted transfer of the case to answer the question that was left unanswered in its previous opinion in Voigt v. Voigt: whether a trial court may modify a spousal maintenance obligation that originates in a settlement agreement but rests on grounds such as incapacity that would have been permitted an identical award even in the absence of an agreement. The Supreme Court concluded that even when a maintenance award could have been made in the absence of a settlement agreement, principles of contract finality preclude a modification unless the agreement is modifiable by its own terms. In the case at hand, the Court found the agreement to be modifiable because the parties expressly made it subject to further order of the court, which echoed similar language in the incapacity maintenance statute. As such, the proper standard for a modification analysis should have been whether a substantial and continuing change in circumstances occurred making the award unreasonable, instead of the fraud, duress or mistake standard. The court did state that the settlement agreement was ambiguous as to what type of spousal maintenance was awarded and that extrinsic evidence supported modification. There was no dispute between the parties that husband was disabled and minimal dispute that his disability was the motivation for the agreed upon maintenance. Further, the fact that husband receives Social Security Disability income benefits also strongly suggested that he was incapacitated for spousal maintenance purposes. So although the initial settlement agreement included a mutual release of all claims, the addendum filed with the court regarding the maintenance award included that it was subject to further order of the court.
So in sum, the Supreme Court held that, even when a trial court could have unilaterally ordered an identical spousal maintenance award, it is presumed the parties intended their agreement to be final and non-modifiable unless the terms specifically provide otherwise in the agreement. Thus, in the case at hand, the award would not have been modifiable except for the fact that the agreement’s own terms allowed for it to be modified.
Spousal maintenance awards and determining whether they are modifiable are very fact specific for each case and so it is important to consult with an experienced family law attorney who can better advise you of your rights. If you are thinking about a divorce, child custody, or support case, the attorneys at Banks & Brower, LLC can help you. Give us a call at (317) 870-0019, or email us at firstname.lastname@example.org. We are available to take your call 24/7/365.