Put up-Dissolution Reliefs on Upkeep and Severance Agreements – Spousal Help Authorized Blogs Posted by Joseph C. Maya, Esq.

Earlier this year, the Connecticut Superior Court addressed an issue that can often arise in relation to alimony payments if there is a subsequent termination or severance payment. The case, Ayres-Leaders v. Ayres, 2018 Conn. Super. LEXIS 489 was ruled on February 28, 2018 by the Connecticut Superior Court (Litchfield).

The marriage of the parties had been dissolved in a 2010 judgment, according to which the accused (husband) “the [plaintiff] Wife … which is calculated as an amount equal to thirty percent of the husband’s gross income minus twenty percent of the wife’s gross income … “

In previous rulings in the same case, the court had previously ruled once in favor of the plaintiff and the defendant on two further post-judicial questions relating to the definition of “gross income” according to the maintenance provision cited.

In the first ruling, the court ruled that the defendant’s short-term incentive payment was a “performance-based bonus,” which according to the ruling is part of “gross income.” “As part of its remedial powers, the court ordered that past and future STI payments be included in the calculation of the spouse’s maintenance paid by the defendant to the plaintiff.

In the second judgment, the court sided with the defendant’s former husband. It ruled that shares awarded to the defendant “are excluded from the calculation of his gross income for the purposes of the maintenance formula”. On that issue, the court ruled, “only whether the agreement excludes all shares or just sign-on stocks from the definition of gross income, stating that ‘sign-on’ only applies to stock options and that ‘shares that everyone Party can be awarded. , regardless of when it was awarded, is excluded from the definition of gross income. “

The February 2018 ruling in the case then dealt with a third question in connection with maintenance: whether the income received by the defendant from the Long Term Incentive Plan should be treated identically to the income from the Short Term Incentive Plan (STI) (ie, since these are “bonuses based on the” longer employment of the defendant “or the distributions to the plaintiff under the LTIP” are actually shares “).

The Superior Court first discussed the nature of RSUs and PSUs:

The plaintiff is of the opinion that the RSUs and PSUs as part of a long-term incentive program are to be included in the alimony calculation as success-related bonuses. The power supplies are paid out, so they are not in stock. The LTIs are not marked as sign-on stock. However, she conceded that if the PSUs were actually stock units, they would not be included in the alimony calculation.

The court also dealt with the maintenance formula in the dissolution decision:

“The gross income of each party for the purpose of this calculation is the gross income of the party from their base salary and any performance-related bonuses received. Income does not include moving costs, car allowances, stock options or shares that can be given to either party. “

The court found that RSUs and PSUs fall under the definition of “performance-based bonuses” and were therefore part of the alimony calculation. (“They are not the type of shares that are excluded from the alimony calculation … The characterization of LTIs as” golden handcuffs “does not change this construction of the termination agreement.”) The court also concluded that the severance payment of the defendant ” one part “was the inclusion of the maintenance calculation for the base salary and performance-related bonuses.”

Maya Murphy’s attorneys are on hand to help you review termination agreements and maintenance issues. No two situations are alike; there are always differentiating facts and circumstances. Hence, you should seek help from an experienced practitioner to determine where you stand. For more information, call us today at (203) 221-3100 or email JMaya@mayalaw.com.


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