Can the court consider my spouse’s earning potential instead of their actual income for spousal maintenance if they voluntarily reduce their income?

When a high-earning spouse suddenly announces plans to leave their lucrative career just as divorce proceedings begin, the timing raises obvious questions about whether this career change is genuine or strategic.

The Aaker* Foundation: When Income Changes Are Transitional

In 1989, the Minnesota Court of Appeals established a foundational principle in Aaker v. Aaker that would shape how courts evaluate sudden income changes during divorce proceedings. The Aaker case involved a spouse whose income was projected to decline, raising the critical question of whether courts should base spousal maintenance on current earnings or future projections.

For the receiving spouse in Aaker, the prospect of their ex-partner’s reduced income likely felt like a financial betrayal—especially if the timing seemed suspiciously aligned with the divorce filing. They had built a life and standard of living based on their spouse’s established earning power, and now faced the possibility that support calculations would be based on artificially reduced income.

From the paying spouse’s perspective, they may have genuinely faced career transitions, industry changes, or personal circumstances that made their historical income unsustainable. The challenge was convincing the court that their reduced earning projections were legitimate rather than manipulative.

The court in Aaker recognized this tension and established that “if the court finds that the projected decline is transitional or situational, the court can use the paying spouse’s earning capacity rather than the projected lower income.” Aaker v. Aaker, 447 N.W.2d 607 (Minn. Ct. App. 1989).

This holding created a crucial distinction between permanent career changes and temporary setbacks. When income declines are transitional—meaning they’re likely to improve with time—or situational—meaning they’re caused by specific circumstances that may pass—courts can look beyond current earnings to assess what the spouse is actually capable of earning. This prevents paying spouses from artificially deflating their income during divorce proceedings while protecting those facing genuine, temporary hardships.

The Melius* Standard: Bad Faith as the Gateway

Twenty years later, the Minnesota Court of Appeals refined and clarified the Aaker principle in Melius v. Melius, a case that involved dramatic income circumstances and established the procedural requirements for challenging a spouse’s reduced earnings.

David Melius* had earned between $2,000,000 and $3,000,000 annually in the two years before his divorce—income that had supported a lifestyle of considerable luxury for both spouses. Just as the marriage was dissolving, he resigned from his high-paying position and formed a consulting company, testifying that he didn’t expect to earn any income for two to five years.

For his wife, this timing must have felt like a calculated financial maneuver. Here was a spouse who had demonstrated the ability to earn millions annually, now claiming he would earn nothing during the precise period when spousal maintenance would be calculated and awarded. The consulting company venture, while potentially legitimate, offered the convenient benefit of dramatically reducing his apparent ability to pay support.

From David’s perspective, he may have genuinely sought to transition from employment to entrepreneurship—a common career evolution for successful professionals. Starting a consulting business often requires an initial investment period with reduced income, and his timeline of two to five years might have reflected realistic business development expectations.

However, the court established a crucial procedural requirement that would determine the outcome. The court held that “the obligor’s earning capacity versus actual income is a factor, but only if the court first finds bad faith or unjustifiable self-limitation of the payor’s income.” Melius v. Melius, 765 N.W.2d 411, 413 (Minn. Ct. App. 2009).

This holding created a two-step analysis that courts must follow. First, there must be a specific finding of bad faith or unjustifiable self-limitation. Only after making that threshold finding can a court then proceed to consider earning capacity rather than actual income for maintenance calculations.

The Melius* Outcome: When Process Matters More Than Potential

The procedural requirement established in Melius proved decisive in that case. Even though David acknowledged he could earn $300,000 from other employment—a substantial sum that could support meaningful maintenance payments—the trial court had awarded spousal maintenance based on this earning capacity without first making the required finding of bad faith.

The Court of Appeals reversed, holding that “an award of spousal maintenance based on income of $300,000 was an error without a finding of bad faith on husband’s part.” Melius v. Melius, 765 N.W.2d at 413.

For David’s wife, this reversal likely felt like a procedural technicality that allowed her ex-husband to escape fair support obligations despite his obvious ability to earn substantial income. The court wasn’t saying David couldn’t afford to pay more—it was saying the proper legal steps hadn’t been followed to justify using his earning capacity rather than his projected consulting income.

From David’s perspective, the reversal vindicated his position that career transitions shouldn’t be automatically viewed with suspicion during divorce proceedings. The court’s emphasis on procedural requirements protected his right to make genuine career changes without having those decisions second-guessed unless there was specific evidence of manipulation.

The Bad Faith Standard: What Courts Actually Look For

The Melius decision makes clear that Minnesota courts won’t simply substitute earning capacity for actual income whenever there’s a convenient income reduction during divorce. Instead, they require evidence of bad faith—meaning deliberate manipulation or deception—or unjustifiable self-limitation—meaning voluntary choices that unreasonably reduce income without legitimate justification.

Bad faith might include situations where a spouse deliberately takes a lower-paying job, reduces their work hours, or makes business decisions primarily motivated by avoiding support obligations. The timing of career changes relative to divorce filings can be important evidence, but timing alone isn’t sufficient without additional indicators of manipulative intent.

Unjustifiable self-limitation might involve scenarios where a spouse chooses not to pursue readily available higher-paying opportunities, or makes career decisions that prioritize personal satisfaction over family financial obligations in ways that seem unreasonable given the circumstances.

The “Share the Pain” Alternative

The legal framework also recognizes that not every income reduction during divorce is manipulative, and some couples face genuine financial hardships that affect both parties. The Aaker court noted that “where there is a credible shortfall, the court may consider a ‘share the pain’ approach to apportioning the available income to mitigate the effects of suddenly declining income.”

This approach acknowledges that when income genuinely declines—due to job loss, industry downturns, health issues, or other legitimate factors—both spouses may need to adjust their expectations and standard of living accordingly. Rather than maintaining the receiving spouse’s historical lifestyle while the paying spouse bears all the financial hardship, courts can structure maintenance arrangements that distribute the economic impact more equitably.

Minnesota’s Statutory Framework and Judicial Discretion

These case law principles operate within Minnesota Statutes § 518.552, which governs spousal maintenance determinations. The statute requires courts to consider multiple factors, including each party’s earning capacity, but doesn’t specifically address situations where earning capacity differs significantly from actual income.

The Aaker and Melius decisions fill this statutory gap by establishing when courts can look beyond current income to assess true financial capacity. This judicial framework balances the legitimate interests of both parties: protecting receiving spouses from manipulative income reductions while preserving paying spouses’ rights to make genuine career transitions.

Practical Implications for Divorcing Couples

For couples navigating divorce where income changes are involved, these cases establish several key principles:

Timing matters but isn’t determinative. While career changes that coincide with divorce filings will face scrutiny, courts won’t automatically assume bad faith based on timing alone.

Evidence of capacity isn’t enough. Even clear evidence that a spouse could earn more than they currently do won’t justify using earning capacity for maintenance calculations without first establishing bad faith or unjustifiable self-limitation.

Genuine transitions receive protection. Courts recognize that divorce often coincides with major life changes, including career transitions, and won’t penalize legitimate professional decisions.

Burden of proof matters. The spouse arguing for earning capacity rather than actual income bears the burden of proving bad faith or unjustifiable self-limitation—a significant evidentiary standard.

The Minnesota approach reflects a sophisticated understanding that divorce involves complex personal and financial transitions that can’t be reduced to simple formulas. By requiring specific findings of bad faith before substituting earning capacity for actual income, courts protect both parties’ legitimate interests while maintaining the integrity of the spousal maintenance system.

For couples facing these issues, the key insight is that transparency and documentation of career decisions can be crucial. Whether defending a career change or challenging a spouse’s reduced income, the evidence and procedural requirements established in Aaker and Melius will ultimately determine the outcome.

📚 Citations

• Aaker v. Aaker, 447 N.W.2d 607 (Minn. Ct. App. 1989) (establishing that courts may use earning capacity rather than projected income when income declines are transitional or situational)
• Melius v. Melius, 765 N.W.2d 411 (Minn. Ct. App. 2009) (holding that courts must first find bad faith or unjustifiable self-limitation before considering earning capacity rather than actual income for spousal maintenance calculations)
• Minnesota Statutes § 518.552 (2025) (governing spousal maintenance determinations and establishing factors courts must consider, including earning capacity)

*The identities of these parties and facts of their matter were publicly published and thus not confidential. While the case holding and statutory references are accurate, creative liberty has been imposed for the emotional portrayal of the parties.