It is scheduled to come into force on January 1st and provides a new framework for setting payments
In June, Governor Sununu signed a bill that significantly changes the New Hampshire Maintenance Act. The law comes into effect for cases filed on or after January 1, 2019.
The state maintenance law currently does not contain any formulas for determining the amount and duration of maintenance. As a result, maintenance decisions often vary from court to court. The new law tries to create a framework for better predictability. Standards for changing and ending maintenance are also defined.
Interestingly, the federal law on alimony will also change on January 1, when any new alimony orders entered thereafter will no longer be tax deductible for the person paying alimony or will be taxable for the person receiving it.
These are the highlights of the new law:
1. The purpose of maintenance should enable both parties to maintain an adequate standard of living. Either party can request maintenance while the divorce is pending or no later than five years after it becomes effective.
2. The “payee” who applies for maintenance must prove a need for support, followed by proof that the “debtor” is able to pay. Formulas determine the amount and duration of maintenance, unless an agreement has been made between the parties. The maintenance amount is the lesser of the payee’s reasonable needs or 30 percent of the difference between the parties’ gross incomes.
Using the formula, gross income is reduced by the amount of child benefit or maintenance paid for a previous family, child benefit paid for children of the current family, and health insurance costs in favor of the other party.
The maximum maintenance period is 50 percent of the duration of the marriage, unless the parties agree otherwise or the court determines that the judiciary requires an adjustment taking into account the following factors:
• Degree and duration of financial dependence of one party on the other. Professional skills, occupation, achievements from employment as well as the current and future employability of both parties.
• Voluntary unemployment or underemployment of a party
• The special needs of the parties’ minor or adult children
• Property assigned to the payee
• The conduct of either party during the marriage, including abuse or fault
• Differences in the benefits of the parties under the social insurance program for federal age, survivors and disability insurance
• Reduction of material assets by a party
3. The duration of the marriage is defined as the number of months from the date of marriage to the date on which the application for divorce, separation or annulment is served. It is at the discretion of the court to use a different start or end date.
4. The law ends maintenance at full retirement age, unless the parties agree otherwise or the court determines that the judiciary requires a different termination date due to special circumstances.
5. The law requires the payee to demonstrate a need or an inability to support himself with a standard of living that meets reasonable needs through decent employment and that the payer is able to meet his own decent needs. In both tests, the court must consider the lifestyle of the marriage and the need for both to adjust their standard of living due to the separation. Income from overtime or a second job is excluded from the payer if it began after the parties separated or the application was submitted.
6. The court can order an increase or decrease in child support, which means that it can reduce or increase the child support generated by the formula in certain steps.
• Maintenance ends when the recipient remarries or dies. If the debtor dies, the maintenance allowance becomes a burden on the debtor’s estate unless that obligation is covered by life insurance or other security.
• Change requests can be made during the maintenance payment or within five years after the end of the first maintenance order. The moving party must pass a three-part test of clear and convincing evidence, a higher standard of evidence than the current law. The test requires a material and unpredictable change in circumstances since the maintenance order came into effect. no undue hardship for both parties; and justice requires a change in quantity or duration.
Income from a second job or overtime is excluded when considering a change request that began after the date of the first maintenance order. If child benefit is a factor in determining the amount of child support, child support may be recalculated if child benefit is changed or terminated without passing this test.
• A payer can request a change in maintenance due to cohabitation. The court may consider the following factors:
• Continuous living together in one main residence
• Distribution of expenses
• The couple’s economic interdependence, or the couple’s economic dependence on each other
• Co-ownership or use of real estate or personal property, including financial accounts
• The existence of a close relationship between people
• Pretending to be a couple through statements or representations to third parties or are generally regarded as a couple
• Any other factors that the court deems material and relevant.
While the new law is likely to change the way maintenance cases are handled by the court, it does provide guidelines that will help parties negotiate a solution to their maintenance issue and avoid a hearing. Anyone getting divorced will be encouraged to speak to an attorney to discuss the application of the law to their particular case, including the timing factors that will result from changes to federal and state law.
James V. Ferro Jr., head of the Ferro Law & Mediation Group, Manchester, can be reached at 603-836-5400 or email@example.com.