A Spouses’ Ability To Access Retirement Funds Does Not Constitute A Change Of Circumstances For The Purpose Of Reducing Spousal Support Obligations

The court determined that a spousal support order could not be reduced on the basis that the supported spouse had access to her retirement funds and that the investment assets had increased in value.

After a divorce husband and wife entered into a stipulated Judgment, where they divided their community property and husband agreed to pay wife monthly spousal support of $16,500 per month. Additionally, the stipulated order required husband to pay wife $3,500 per month in child support for their sole minor son. Husband was earning $87,721 per month and wife had been unemployed. Wife’s divorce lawyer filed a motion seeking the division of the parties’ retirement accounts. Husband’s divorce lawyer filed an order to show cause seeking the termination of his spousal support obligation. Husband was seeking the court to order a “step-down” schedule that would require wife to begin supporting herself.

At trial wife’s divorce lawyer contended that she was 62 years old, had worked for husband handling administrative matters in his previous business, and had contracted a respiratory condition making it unadvisable that she returns to work. The divorce court found a material change in circumstances based on a marketable increase in her securities investments by $220,000 and her ability to access retirement asset funds since she reached the threshold age for access. The divorce court found that wife had not less than $4 million in assets, although only $1.3 million is liquid. Further, the court explained that the marriage was long-term, and the parties had acquired their wealth during the marriage thus wife was entitled to assets available to maintain her marital standard of living post dissolution. However, the divorce court determined wife would be able to support herself on less than $16,000 per month and ordered husband’s monthly support obligation to be reduced to $3,000 per month.

On appeal, the court reversed the divorce court’s decision to lower the spousal support order because there had been no material change of circumstances since the stipulation. The court explained that to modify a spousal support award, there had to be a material change in circumstances. Further, the divorce court’s discretion to modify spousal support was constrained by the marital settlement agreement. The court determined that the increase in wife’s assets had been contemplated and acknowledge by the stipulated Judgment thus, an increase in security assets was part of the parties’ reasonable expectation and would not constitute a material change in circumstances. Therefore, the court found there were no material change in circumstances as a result of access to the retirement fund and an increase in securities that would allow for a reduction of spousal support obligations.

In re Marriage of Dietz (2009) 176 Cal. App.4th 387