Consider this scenario: ten years ago, when the parties were still employed and working, the court awarded to each of the parties one-half of the husband’s retirement account. The court also awarded permanent alimony to the wife. Now, ten years later, the former husband has retired and is taking distributions from his retirement account. In addition to social security, his sole current source of income is the distributions he takes from his 401(k). The former husband files a petition with the court to reduce his alimony based upon a change of circumstances, to wit, his retirement and consequent reduction of income. The former wife’s needs have not changed from ten years prior, but she cashed in her half of his retirement five years ago, and so now she has no retirement income available to her, and she is not yet eligible for social security.
The issue: Can the court consider the amount of money he receives in distributions to be income to him for alimony purposes, even though she has already received one half of that income as part of the asset distribution ten years ago? In other words, is it right that the retirement account be considered an asset ten years ago and distributed as such, but then ten years later be considered an income source to him but not to her for alimony purposes?
This is a very perplexing issue that has plagued Florida’s courts for years. The apparent answer to the question, based on Florida case law, is YES, but the equities involved in this situation appear somewhat lost in the case law. It seems that Florida law “punishes” him by requiring him to part with half his retirement account when he’s divorced, then requiring him to part with a portion of the remainder when he retires. In essence, she is receiving more than half of that marital asset despite the general rule in Florida that the marital estate be divided equally, absent compelling reasons for an unequal distribution. What’s more, the “unequal distribution” does not actually occur until years after the divorce when it is too late to legally revisit the distribution.
Family law practitioners for years have been pushing for legislation that will address this inequitable issue. This year, an alimony bill is expected to be introduced in the legislature, but whether or not this issue is adequately (or at all) dealt with in that legislation remains to be seen.