In a recent case out of the Florida’s Fourth District Court of Appeal , the appellate court affirmed the trial court’s decision to deny the husband permanent, periodic alimony. The parties had been married 17 years and the husband was unemployed receiving Social Security Disability benefits but had a total net worth of over $1.3 million consisting of real estate, financial holdings, and retirement plans. The wife was grossing over $10,000 per month in income and had a net worth of over $600,000. The trial court imputed income to the husband based on a 3% investment rate of return on his real estate and financial assets, including his non-liquid assets, and based on the imputation of income, found the husband did not have the need for alimony.
In upholding the trial court’s ruling, the appellate court acknowledged that while the law was not clear on the issue of whether a trial court should impute income based on a reasonable return on a former spouse’s non-liquid assets, it was not an abuse of discretion to do so. The appellate court went on to state that a contrary rule would simply encourage spouses with substantial non-liquid assets to engage in strategic gamesmanship, such as delaying the liquidation of their assets, for purposes of advancing or defending alimony claims.
The implications of this case is great. It could mean that a spouse is not entitled to alimony despite his lack of income where he owns substantial non-liquid assets, such as a retirement account. However, the appellate court seems to suggest that the imputation of income from non-liquid assets is only reasonable when it applies to assets that are typically investment assets and does not require the spouse to invade the principal of his assets.
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By Carol Yoon- Associate Attorney