Facts: Husband and Wife divorced after 26 years of marriage. Both are graduates of Vanderbilt University and obtained post-graduate degrees. Wife earned a Master of Business Administration from Vanderbilt, and Husband earned a law degree from the University of Tennessee.
For the first 12 years of the marriage, Wife worked as a financial analyst and earned substantially more income than Husband. After the birth of their third child, Wife became a stay-at-home parent.
During the marriage, Wife inherited $1.9 million from her father and was also the beneficiary of a trust containing assets valued at $780,000.
While the case was pending, Husband was ordered to pay Wife $7000 per month as temporary alimony.
After a trial lasting 12 days, the trial court divided the marital estate by awarding Wife $723,000 in marital property compared to Husband’s $687,000. After including separate property, Wife came out of the marriage with marital and separate assets valued at $2.6 million; Husband came out of the marriage with marital and separate assets valued at $860,000. Notably, Wife’s separate assets produce income of $71,000 a year, without diminishing the principal, while Husband’s produce essentially no income.
The trial court also ordered Husband to continue paying Wife monthly support of $7,000 until the marital residence was sold. Additionally, Wife was awarded transitional alimony in the amount of $3,600 per month for 48 months, the term of which would begin following the sale of the marital residence.
On Appeal: The Court of Appeals reversed the trial court.
Transitional alimony is appropriate when a court finds that rehabilitation is not required but that the economically disadvantaged spouse needs financial assistance in adjusting to the economic consequences of the divorce. This type of alimony is designed to aid a spouse who already possesses the capacity for self-sufficiency but needs financial assistance in adjusting to the economic consequences of establishing and maintaining a household without the benefit of the other spouse’s income. As such, transitional alimony is a form of short-term support.
When determining whether to award alimony and the nature, amount, length, and manner of payments, courts are required to consider the factors set forth at Tennessee Code Annotated § 36-5-121(i). However, the two most important factors to consider are the disadvantaged spouse’s need and the obligor spouse’s ability to pay. If a court finds a spouse is not “economically disadvantaged” or in need of additional support, then that spouse is not entitled to support and the inquiry goes no further.
After reviewing the record, the Court concluded:
Husband’s net annual income was found to be $107,181.25 and, yet, he was ordered to pay an indefinite award of $7,000 per month, representing $84,000 a year of post-divorce support, leaving Husband with disposable income of only $23,181 a year, $1,931.75 per month, to support himself…. In addition to the above, Husband was ordered to pay, for a term of 48 months, $3,600 per month as transitional alimony after the sale of the marital residence….
[W]e have concluded that it would constitute an injustice to Husband for him to bear this heavy financial burden, particularly realizing that Wife’s needs do not justify such an award. For the foregoing reasons, we have concluded that Wife’s post-divorce support should be limited to transitional alimony at the rate of $3,600 per month, the amount set by the trial court, for a period of a 24 month….
[W]e reverse and modify the two awards of post-divorce support. We reverse the indefinite award of $7,000 per month until the marital residence is sold, and we modify the duration of the award of transitional alimony from 48 months to 24 months at $3,600 per month as set by the trial court….
The facts that mitigate a need for transitional support include specifically the substantial disparity in the spouse’s post-divorce assets, the liquidity of these assets, the income they produce, and Wife’s opportunities for employment when she chooses to make herself available for employment.
Accordingly, the trial court’s judgment was reversed and modified as noted above.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.