Under some circumstances, there may be income imputed to a party for purposes of calculating alimony and child support. For example, what if a party voluntarily changes careers to a less lucrative one or takes an early retirement? The court may impute income to that party to reflect his or her potential and demonstrated earning capacity. But what if the party left his or her job – though voluntarily – reluctantly and due to unfortunate circumstances? Should the court impute income? The Massachusetts Appeals Court recently addressed this issue.

Background:

In the case, [1] the husband had a high-paying position as head of a private school: including his base salary, bonuses, and other benefits, his compensation package equaled approximately $450,000 annually. However, after engaging in an affair with one of his subordinates, the husband resigned from his position. The parties separated, and the husband engaged in an extensive job search—he applied for dozens of comparable positions, traveled frequently to meetings and interviews, worked with recruiters, and honed his professional skills to increase his marketability. After eleven months, the husband received one job offer, which he accepted. However, his new position paid him considerably less. In fact, he was making about a third of his previous salary.

Meanwhile, the parties divorced. The trial judge ordered the husband to pay child support and alimony; the judge based the respective calculations on the husband’s previous income, with income imputed to the husband. After accepting his new offer of employment, the husband petitioned the court for a modification of his child support and alimony payments. He noted that his income was substantially less than it had been at the time of divorce. The wife, meanwhile, filed several complaints for contempt, alleging that the husband owed her back alimony and child support.

During the trial proceedings, the divorce judge concluded “that no material change in circumstances had occurred because the husband’s ‘actual earnings…are less than his potential and demonstrated earning capacity,’ and the reduction in the husband’s income was caused by ‘his voluntary decision to resign from [his job.]’” [2]

Appeal:

On appeal, the Appeals Court disagreed with the divorce judge’s decision. “The facts of this case are distinguishable from the voluntary career change line of cases. The husband did not take an early retirement, nor did he resign from [his job] to pursue a less lucrative career in a completely unrelated field. Moreover, while the judge found that ‘[t]he [h]usband’s position…remained available to him, but for his resignation.’ there was no evidence demonstrating that the husband’s employment with [his previous employer] would continue indefinitely,” the Appeals Court stated. [3]

The Appeals Court also noted that the trial judge failed to give proper consideration to the efforts of the husband to find higher-paying employment. “not only did the judge fail to make a specific finding that the husband could earn more with reasonable effort, it is apparent that such a finding cannot be made on this record.” [4]

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1 Emery v. Sturtevant, No. 16-P-443 (December 2, 2016 – May 12, 2017).
2 Id., at 6.
3 Id., at 15-16.
4 Id., at 19.