by Rachael Soun
In Openshaw v. Openshaw, 493 Mass. 599 (2024), the Supreme Judicial Court (“SJC”) for the first time faced the question of whether a Probate & Family Court judge may consider a divorcing couple’s custom of saving money when determining the amount of alimony to be awarded. In this hotly anticipated decision, the SJC held that a judge may consider savings as a part of an alimony recipient’s need if the record supports an ongoing practice of saving during the marriage and there is sufficient income post-divorce to support both parties.
Background
The parties had been married for nearly thirty years. They had six children and enjoyed an upper middle-class lifestyle. During the two full years preceding their separation, the parties reported over $1.3 million in annual income. The record reflected that the parties were able to regularly contribute portions of their income to investments and savings because of their modest spending compared to their earnings. Each month, the parties transferred any remaining funds after expenses to their investment and retirement accounts. They also consistently donated approximately ten percent of their income to their church in accordance with the tenets of their faith. At the time of their divorce, the parties’ marital estate amounted to at least $4.5 million, a large portion of which was in the form of checking, savings, investments, and retirement accounts.
Following a trial in which custody, alimony, child support and division of assets were all contested, the trial judge entered a judgment of divorce nisi which, in relevant part, required the husband to pay to the wife the sum of $5,020 per week in alimony. That amount represented what the court found to be the wife’s expenses and was inclusive of $1,000 per week in savings and $730.64 per week in charitable giving. The trial judge also divided the marital estate with the wife retaining fifty-five percent of the assets and the husband retaining the remainder, along with $343,280 of liabilities which were mostly comprised of the family’s 2020 and 2021 tax liabilities. The husband appealed those portions of the judgment.
The Openshaw Decision
In determining whether a spouse’s need for alimony purposes can include savings, the SJC reviewed G.L. c. 208, § 53(a) (“the alimony statute”). The alimony statute enumerates certain factors that a judge must consider when fashioning an order for alimony. One of those factors is the parties’ “marital lifestyle.” In reviewing the alimony statute’s construction as well as case law and dictionary definitions of “lifestyle,” the SJC concluded: “the plain meaning of the alimony statute’s directive that the judge must consider the ‘marital lifestyle’ and the ‘ability of each party to maintain the marital lifestyle’ requires consideration of saving where the evidentiary record shows it was a regular practice during the marriage.” Openshaw, 493 Mass. at 605.
The SJC determined that in the same way a divorcing couple’s recent lavish spending on vacations or other luxuries would be considered in determining a recipient spouse’s need for alimony, so too would a couple’s customary allocation of income to savings. Id. at 605-07. “Saving” should, therefore, not be considered any differently than “consumption” if it constituted a part of the parties’ practice while they were still married. Id. The SJC went on to cite cases from Utah and California that likewise considered the practice of saving in an alimony recipient’s need in holding that to do otherwise would be to penalize those who make wise financial decisions during their marriage. Id. at 608-09.
The SJC considered the husband’s position that the parties’ historical practice of saving was recognized in the assets that the wife was to retain after their divorce and that it could also be considered in the award of alimony. The SJC cited to a New Jersey case in concluding that where post-divorce income is sufficient for each party to continue living the marital lifestyle, the alimony awarded should include the parties’ historical savings: “it is not equitable to require the wife to rely solely on the assets she received through equitable distribution to support the standard of living while the husband is not confronted with the same burden.” Id. at 609, quoting, Lombardi v. Lombardi, 477 N.J. Super, 26, 40 (App. Civ. 2016). Interestingly, the SJC noted that it joins “the vast majority of jurisdictions” in that conclusion and cited many of those decisions in footnote 20. Openshaw, 493 Mass. at 609, n.20.
The SJC also considered the husband’s position that the trial court erred by crediting the wife’s expenses as reflected on her trial financial statement rather than the calculations and analyses he presented at trial. The SJC concluded that the trial court did not abuse its discretion in its calculation of the wife’s need and that the judgment, findings, and rationale reflected that the trial court considered all the mandatory factors of the alimony statute.
The husband raised a secondary issue relating to the allocation of liabilities in the divorce judgment. The liabilities were largely comprised of the husband’s tax debts accrued during years in which the parties filed separate tax returns. The assignment of that debt resulted in the husband getting far less of the marital estate than the forty-five percent that the trial court stated it intended him to receive. The SJC found the liabilities to be marital and remanded the matter to the trial court for further proceedings solely with respect to the assignment of liabilities.
Conclusion
The Openshaw decision allows for savings to be considered a part of an alimony recipient’s needs if: (1) there is a clear record and pattern of saving by the parties during their marriage; and (2) there is sufficient income post-divorce to allow both parties to maintain the standard of living enjoyed during the marriage. Although the tension between “need” versus “ability to pay” is nothing new with regards to alimony in Massachusetts, the now clear precedent of including savings in a recipient’s “need” will certainly change the way that courts and litigants will approach alimony cases for high wage earners going forward.
Rachael M. Soun is a partner with Atwood & Cherny, P.C. in Boston and focuses her practice on divorce and family law.
