Catherine M. Coryell* stared at the stack of financial documents spread across her kitchen table, feeling overwhelmed by numbers that represented 28 years of marriage to Mark N. Kampf*. At 52, with only a high school equivalency degree and limited work experience, she faced the daunting reality of rebuilding her life after their separation in early 2004.
Catherine had devoted herself to their family, leaving her modest career as a bank teller, secretary, and receptionist in 1983 to focus on raising their two children and supporting Mark’s successful executive career. While Mark earned an impressive average of $656,207 annually from 2002 to 2004, Catherine had sacrificed her own professional development to create a stable home environment.
When Catherine filed for dissolution in July 2004, the weight of financial uncertainty pressed heavily on her shoulders. How could she maintain the standard of living they had built together when her earning potential was limited to just $14,872 per year, even with additional training? The anxiety of starting over at 52 felt overwhelming.
During the five-day trial, Catherine felt a mix of vulnerability and determination as she presented her case. The court carefully examined her reasonable monthly expenses of $9,005, which included not just basic living costs but also $360 for savings and $333 for retirement—amounts that reflected the financial planning that had been integral to their marriage.
Catherine experienced her first wave of relief when the court awarded her $14,240 in monthly transitional spousal maintenance through June 2008, followed by $13,000 in indefinite monthly maintenance. The court recognized that savings and retirement planning weren’t luxuries but essential components of the lifestyle they had established during their 28-year marriage.
However, Catherine’s sense of security remained incomplete. What would happen to her maintenance if something happened to Mark? At her age, with limited career prospects, she needed assurance that her financial future was protected. When the trial court initially refused to require Mark to maintain life insurance to secure her maintenance payments, Catherine felt that familiar anxiety return.
Catherine’s persistence paid off when she appealed this decision. The Court of Appeals understood her concerns completely, recognizing that her age, education, work experience, and employment prospects made life insurance security not just reasonable, but necessary. The court affirmed her maintenance award and ordered that Mark must carry life insurance to protect her financial future.
Catherine’s journey taught her that advocating for comprehensive financial security isn’t about greed—it’s about ensuring stability and peace of mind during life’s most challenging transitions.
*This story is based on the true facts of the appellate court’s decision, but the personal experiences and emotions described are a fictional representation to bring the case to life.
Answer: Minnesota Statutes section 518.552, subdivision 2 lists eight factors the court considers when determining the amount of spousal maintenance. Within some general parameters, the courts have broad discretion to interpret and apply these factors. The factors are not conclusive or exclusive. Subdivision 2 provides that the amount is to be set considering “all relevant factors,” including the eight enumerated factors. Minnesota law does not contemplate an equal income-sharing approach to spousal maintenance, Lyon v. Lyon, 439 N.W.2d 18 (Minn. 1989), although a “share the pain” theory may be appropriate in some circumstances.
The court cannot consider marital misconduct but if a spouse’s conduct causes a particular need, it may be considered. For example, in Burt v. Burt, 386 N.W.2d 797, 800 (Minn. Ct. App. 1986), the wife was a victim of domestic violence which left her with physical disabilities that impaired her earning capacity. This could be the basis for a spousal maintenance award because it was tied directly to her income and needs.
Minnesota Statutes section 518.552, subdivision 2(a) sets the first factor in determining the amount and duration of spousal maintenance: “the financial resources of the party seeking maintenance, including marital property apportioned to the party, and the party’s ability to meet needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian.”
The “financial resources” of a party typically include the assets and income available to a party before receipt of spousal maintenance. Income from assets is the primary consideration in this factor. The income from assets to be considered is arrived at using the same analysis for determining whether an award of spousal maintenance is warranted. In this instance, however, it is already assumed that there is not sufficient income from assets to meet the spouse’s needs, so the query focuses on how much income is available, and the resulting shortfall.
In the category of financial resources, a party’s current or future entitlement to an inheritance, trust, or other funds may be relevant. Weikle v. Weikle, 403 N.W.2d 682 (Minn. Ct. App. 1987); Ziemer v. Ziemer, 386 N.W.2d 348 (Minn. Ct. App. 1986). Entitlements that are only to be received in the future and have no present value are typically not considered. Trust income presently being paid out can be considered. Gifts that are received regularly may be considered if there is a likelihood they will continue. A trust that can make discretionary payments is more difficult. The trust may have made payments in the past to support a high lifestyle, but the trustee may indicate there will not be future payments. The credibility of this position and how it is handled in awarding spousal maintenance presents special challenges. Honke v. Honke, 960 N.W.2d 261 (Minn. 2021) directs that the principal and income of post-divorce gifts, inheritances, and other payments can be considered although, the opinion does not give specific direction as to how these assets and income should be considered. The proof problems are evident. See, e.g., Feierabend v. Feierabend & St. Louis Cty., No. A20-1440, 2021 WL5767852 (Minn. Ct. App. Dec. 6, 2021).
Minnesota Statutes section 518.552, subdivision 2(b) requires the court to consider: “the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, and the probability, given the party’s age and skills, of completing education or training and becoming fully or partially self-supporting.”
In light of Passolt v. Passolt, 804 N.W.2d 18 (Minn. Ct. App. 2011), rev. denied (Minn. Nov. 15, 2011), the appropriate employment factor took prominence in determining whether spousal maintenance is warranted and in setting the amount and duration.
Another challenge arises when, during the marriage, a spouse has been employed in a lucrative job, but has quit the job before the divorce to pursue another career that may not be as lucrative. Then a divorce starts. Does the spouse have an obligation to go back to the job they left during the marriage? This is a difficult scenario in which to predict an outcome and one where the court has wide discretion. Important factors will include: (1) the market available for the spouse to resume the prior job or a comparable position; (2) the reasons for the job change (such as burnout or depression); and (3) the time and cost to reenter the prior job versus continuing with the new career. Again, the court cannot force a spouse to work in any given job, but the court can assume income based on the spouse’s proven ability to be employed and earn income at a prior level. See Rauenhorst v. Rauenhorst, 724 N.W.2d 541 (Minn. Ct. App. 2006).
Even though a spouse may retrain and generate income, it should not be assumed that this will terminate spousal maintenance. In many instances, even with full education and reentry into the workforce, a spouse will only be partially self-supporting. Chamberlain v. Chamberlain, 615 N.W.2d 405 (Minn. Ct. App. 2000); Passolt v. Passolt, 804 N.W.2d 18 (Minn. Ct. App. 2011). In these instances, demonstrating the spouse’s budget based on the marital standard of living becomes critical to sustaining spousal maintenance. While the spouse may be able to earn some income, the question of whether they are fully or partially self-supporting will depend on the spouse’s demonstrated needs.
Minnesota Statutes section 518.552, subdivision 2(c) directs the court to consider “the standard of living established during the marriage.” The standard of living may be a major factor in determining the spouse’s need, but it is tempered by the realities of the family finances. To the extent possible, both parties should be able to meet the marital standard of living after the dissolution. But, this goal is limited by the economic reality of two households. In many instances neither party can meet the marital standard of living after the divorce. Further, this factor does not change the overriding statutory mandate that spousal maintenance is based on need. Minnesota Statutes section 518.552 is not an income-sharing model.
To prove the marital standard of living, a spouse typically demonstrates spending patterns during the marriage. This may include an analysis of the parties’ credit cards and check records showing the parties’ spending. The marital standard of “spending” includes obvious expenses, such as housing, clothing, travel, entertainment, and so on. Standard of living may also be shown through employment benefits, such as corporate travel and the use of company cars. The marital standard of living may include savings and retirement plans. The marital standard of living may also come from the benefits provided by one spouse’s family, such as family trips and vacation homes. See Roth v. Roth, 406 N.W.2d 77 (Minn. Ct. App. 1987). The issue of whether a spouse is entitled to sustain these additional benefits after the marriage ends is often complex.
Another inquiry regarding standard of living is whether the marital standard of living has been artificially high because of debt incurred. If there is substantial debt at the time of the dissolution, and the debt is directly traceable to spending on daily living, recreational vehicles, and more, it may be that the marital standard of living is artificially inflated from what can realistically be sustained on the parties’ combined incomes alone. Maeder v. Maeder, 480 N.W.2d 677 (Minn. Ct. App. 1992). Debt incurred above what is affordable should not be confused with affordable installment debt such as car payments.
In determining a reasonable standard of living budget, consider how a spouse may anticipate spending funds that were spent one way during the marriage but differently after the marriage ends. For example, during the marriage, the parties may have been spending money on college for their children, who have now graduated. Adult children are not a recognized reasonable need. Musielewicz v. Musielewicz, 400 N.W.2d 100 (Minn. Ct. App. 1987). However, the parties may have gone without clothing or new cars to divert their money to their children’s college education. Does this mean that portion of the marital spending is ignored? In these instances, the court may look at the general overall level of spending rather than the specific areas.
If savings have been part of the marital standard of living, a savings component in the budget may be reasonable. Schmidt v. Schmidt, 964 N.W.2d 221 (Minn. Ct. App. 2021). This is often constrained by the economic shortfalls that occur with two households. Further, savings can take many forms, some of which will be rejected while others are commonly accepted by the court. For example, debt repayment, such as that of a margin loan, may not be considered a reasonable expense because it is in the nature of savings. Kemp v. Kemp, 608 N.W.2d 916 (Minn. Ct. App. 2000). However, monthly mortgage payments increase the equity in the home, a form of savings, and are typically considered a reasonable expense. Retirement contributions may also be part of the marital standard of living. Schmidt, 964 N.W.2d at 224.
To establish a budget based upon both the marital standard of living and a spouse’s needs post-divorce, the spouse frequently has to project certain expenses. This may be due to the expected sale of the family home, the expected need for continuation of health insurance, or other factors. In order to include these expenses, there must be a certainty that the expense will be incurred and evidence of what the expense will be. See id. A mere expectation that a spouse may need to spend more on clothing or buy a home can be rejected as a speculative expense. Rask v. Rask, 445 N.W.2d 849 (Minn. Ct. App. 1989). The degree of certainty to which a court will require proof of future expenses varies. The fact that an expense is not currently being incurred is not fatal, where there is a reasonable degree of certainty that an expense will be incurred in the future. The credibility of a future expense will be heightened if a similar expense is included in the other spouse’s budget.
An analysis of the marital standard of living must also define the marital period that set the standard. The classic example is the family that has consistently experienced increased income over the years. In these instances, if the level of income is likely to remain the same or increase after the divorce, the court will often look at the last few years of spending. More challenging are instances involving previously high income that has decreased in recent years due to a job change, market forces, or other factors. In cases such as these, the court may decide that the current lower standard is dispositive if the prior (higher) standard cannot be recovered. One way to avoid unfairness is to leave the door open for future modification of spousal maintenance, should the higher income level be restored. There are numerous unpublished cases on this issue which highlight the need for a case-by-case analysis.
The reverse situation—where the marital standard of living has been low, but shortly before the divorce, a spouse’s income increases dramatically—is also problematic. Here, the marital standard of living may be extraordinarily low compared to the spouse’s future ability to pay. The spousal maintenance award may depend on sacrifices made during the marriage to achieve the higher income (such as loss of savings), the length of the marriage, the contributions of the spouses, the extent of the assets, and other factors described in Minnesota Statutes section 518.552, subdivision 2.
Another challenge arises where one spouse has controlled the money during the marriage and has inordinately restrained the family spending while perhaps spending more freely on themselves. In this situation, the court may look at the entire family’s spending rather than just the spending of the spouse seeking maintenance.
Minnesota Statutes section 518.552, subdivision 2(d) requires the court to consider: “the duration of the marriage and, in the case of a homemaker, the length of absence from employment and the extent to which any education, skills, or experience, have become outmoded and earning capacity has become permanently diminished….”
The length of the marriage has long been important for determining the duration of spousal maintenance. It may also be important in setting the amount. A high standard of living that was enjoyed for a short marriage is less persuasive to the court than a high standard of living enjoyed over a long marriage. Dobrin v. Dobrin, 569 N.W.2d 199 (Minn. 1997).
This duration of marriage factor has been relied on in the past to support the assumption that a spouse should not have to reenter the workforce due to the length of time invested in the marriage. In light of Passolt v. Passolt, 804 N.W.2d 18 (Minn. Ct. App. 2011), rev. denied (Minn. Nov. 15, 2011), this assumption should be reconsidered. Even in long-term marriages, there must be consideration of a spouse’s appropriate employability. Another complexity may be the case where a spouse has achieved a high level of education during the marriage but has low earning capacity because of the nature of the work or the lack of experience.
Minnesota Statutes section 518.552, subdivision 2(e) establishes “the loss of earnings, seniority, retirement benefits, and other employment opportunities forgone by the spouse seeking spousal maintenance” as another relevant factor in setting maintenance. This is a difficult issue to address and one that is frequently ignored. An argument is often made that if the spouse receives half of the existing retirement benefits, there has been no loss. But this ignores the prospect that the spouse may be reentering the workforce at a lower level of income—and consequently lower retirement benefits—than what would have been available if the spouse had stayed in the workforce. If there is not an allotment in the spouse’s budget to bring their retirement benefits to where they would have been had the spouse stayed in the workforce, the issue may not be adequately addressed in the spousal maintenance award.
To some extent, this issue may be addressed by a finding that the spouse can only be partially self-supporting and has a claim to maintenance after the other spouse’s retirement. But, this may not be sufficient. The paying spouse may not acquire additional retirement, the market performance may reduce the existing retirement assets or other unforeseen catastrophes may occur. While there is a statutory requirement to consider these factors, in reality, there may be little that can be done to address the loss of earnings, benefits, and seniority, except in high-income cases.
“[T]he age, and the physical and emotional condition of the spouse seeking maintenance” are considered in Minnesota Statutes section 518.552, subdivision 2(f). Age is a significant spousal maintenance factor, but one that has changed over time. Perlstein v. Perlstein, 356 N.W.2d 383 (Minn. Ct. App. 1984). What was once considered “advanced years,” is now viewed as middle age. The spouse’s age becomes even more important if retraining is required. Again, these perspectives on age must be considered in light of Passolt and its progeny. Another consideration may be how close the obligee is to Social Security age versus the time to retrain and obtain employment.
Physical and emotional health may be compelling factors in a spouse’s ability to work in the future. The clear cases are those involving a spouse with a debilitating, chronic physical or mental illness. How to handle illnesses like alcoholism and depression is less clear. In Gales v. Gales, 553 N.W.2d 416 (Minn. 1996), the Minnesota Supreme Court found that the wife’s depression was situational, resulting from the divorce. Because the depression had not apparently existed for long, the court found it was not the basis for an award of indefinite spousal maintenance.
Minnesota Statutes section 518.552, subdivision 2(g) directs that “the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance” is another relevant factor in setting spousal maintenance. In fact, this is the dispositive factor in most awards: the reasonable needs of one spouse balanced against the ability of the other spouse to pay. Crosby v. Crosby, 587 N.W.2d 292 (Minn. Ct. App. 1998); Krick v. Krick, 349 N.W.2d 350 (Minn. Ct. App. 1984). It is the essential inquiry in most spousal maintenance cases, and there are unique considerations in determining the spouse’s ability to pay maintenance.
Equalization of income is not an accepted basis for need or ability to pay spousal maintenance but in some circumstances, it is considered. These circumstances are typically in instances where other factors warrant an award of spousal maintenance, but the parties’ joint cash flow leaves a shortfall for both. See Aaker v. Aaker, 447 N.W.2d 607 (Minn. Ct. App. 1989).
The paying spouse’s income may, in addition to earned income, include trust income, gifts, income earned on inheritance money, and more. Social Security disability income can also be considered. A spouse’s ability to pay may include bonus income and other executive compensation, such as noncompete agreements and deferred compensation. The statutory definition of income includes any periodic payment. See Minn. Stat. § 518A.29. It is important to discern which benefits are divided as property in the divorce and which have not been divided and can appropriately be considered income. These types of payments cannot be treated as both assets and income.
There are instances where income from a business has been capitalized to value the business. In these cases, reasonable compensation is often excluded from valuation. See O’Brien v. O’Brien, 343 N.W.2d 850 (Minn. 1984). But there are instances where this theory is not followed. An extensive discussion of the so-called “double-dip” issue, as it relates to business valuation, is contained in Chapter 10, Special Business Valuation Topics, infra. Self-employed payors may also present special issues as to what is income available for paying spousal maintenance and what is business capital.
Often, bonus income and other executive compensation cannot be precisely determined before it is paid but may still be considered in the ability to pay. If the bonus income has been relatively consistent, the court may include some average of this income in the ability to pay and require the paying spouse to budget for the frequency of the payments. Lynch v. Lynch, 411 N.W.2d 263 (Minn. Ct. App. 1987). Very sporadic bonus income may not be considered. McCulloch v. McCulloch, 435 N.W.2d 564 (Minn. Ct. App. 1989). When the income is less predictable, the court can order that the parties share in the bonus income on a percentage basis. This carries the benefit of shared risk; it has the distinct disadvantage of requiring the parties to account for the bonus income each year. In addition, sharing in unpredictable income such as stock options and restricted stock means the receiving spouse’s level of spousal maintenance is uncertain.
In rare instances, a spousal maintenance obligation may be stated as a percentage of the paying spouse’s income. This method is typically rejected by the appellate courts, unless there are clear parameters on the payments. Schreck v. Schreck, 445 N.W.2d 861 (Minn. Ct. App. 1989). Otherwise, the percentage approach does not properly consider the spouse’s actual needs. Bourassa v. Bourassa, 481 N.W.2d 113 (Minn. Ct. App. 1992).
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 (Minn. Ct. App. 2009). In Melius, the husband earned $2,000,000 to $3,000,000 per year in the two years prior to the dissolution. The husband resigned from his job and shortly after that the parties separated. The husband then formed a consulting company and testified that he did not expect to earn an income for two to five years. Id. at 413. The wife argued that the husband could earn higher income but did not argue that he was underemployed in bad faith. The husband acknowledged that he could earn $300,000 from other employment. Despite his earning ability, the court of appeals held 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.
Minnesota Statutes section 518.552, subdivision 2(h) requires the court consider: “the contribution of each party in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker or in furtherance of the other party’s employment or business.”
While it would appear that this provision could be used to justify almost any decision made by a trial court, it is not used frequently. Although the language appears to invite consideration of marital conduct, the same section directs that the court cannot consider marital misconduct. Further, Minnesota Statutes section 518.58 establishes a conclusive presumption that each party has contributed substantially to the assets acquired during the marriage.
How, then, can this information be used? Excessive gambling or other debts could be considered not as marital misconduct, but as depreciation of the marital property. If a spouse is left with significantly less assets than there would have been without the debt, it could be a reason for awarding spousal maintenance to fund retirement and savings. Another instance may involve one party’s nonmarital property funding many of the benefits enjoyed by the marriage.
While the duration of spousal maintenance is somewhat easier to predict, there have been enough shifts in the courts’ views to cause doubt. Generally, the same factors enumerated in Minnesota Statutes section 518.552, subdivision 2 which are discussed above, also apply to the duration of spousal maintenance.
The most important difference between indefinite and transitional spousal maintenance is the burden of proof for future modifications of spousal maintenance. Indefinite spousal maintenance does not literally mean indefinite. Transitional spousal maintenance may become “indefinite” under the appropriate circumstances. So the labels, while compelling to clients, are not dispositive of the true duration of spousal maintenance.
Indefinite spousal maintenance means that the paying spouse has the burden of proof to show a change in circumstances that would justify modifying the spousal maintenance obligation. The changes may include retirement, loss of income or employment, and so on. A transitional award of spousal maintenance means that the spouse receiving maintenance has the burden to prove why the payments should continue beyond the defined term. The reasons may include failure to obtain employment, illness, child care responsibilities, and other circumstances that would prevent the spouse from earning the income anticipated.
In Nardini v. Nardini, 414 N.W.2d 184 (Minn. 1987), the Minnesota Supreme Court analyzed the issue using the future likelihood of self-support as the determining factor in choosing indefinite over transitional maintenance. Because the spouse in that case was not likely to substantially improve her earning capacity, she would remain in need of spousal maintenance—and consequently, putting the burden of proof on her in five years to show why maintenance should continue, was an abuse of discretion. As the court noted, nothing would have changed in five years; she would still need maintenance and yet would be unable to meet her burden of proof to show that there had been a change in her circumstances. The reason for the continuation would have been the lack of change, but this did not fit the statutory basis for continuing the maintenance.
The factors that are most dispositive in determining the duration of spousal maintenance are the length of the marriage and the future ability of the spouse to be self-supporting. In terms of length of the marriage, there is no bright line. Some courts use a rough rule of one-half the length of the marriage, although there is no statute or case law to support this approach. Passolt v. Passolt, 804 N.W.2d 18 (Minn. Ct. App. 2011), rev. denied (Minn. Nov. 15, 2011) does not appear to change the factors for duration.
The legislature added an additional complexity to duration issues when it added Minnesota Statutes section 518.552, subdivision 3, which provides: “Nothing in this section shall be construed to favor a transitional award of maintenance over a indefinite award, where the factors under subdivision 2 justify a indefinite award.” There has been much debate as to whether subdivision 3 dictates a presumption for indefinite spousal maintenance. Subdivision 3 has been interpreted not to create a presumption of indefinite spousal maintenance, but to require a consideration of all the factors in subdivision 2 (the length of the marriage, the age of the spouse, the ability to become self-supporting, and so forth) in setting the duration. This has been affirmed by the Minnesota Supreme Court. See Hecker v. Hecker, 568 N.W.2d 705 (Minn. 1997). While it does not require a presumption of indefinite spousal maintenance, certainly the section highlights the need to carefully consider the possibility of indefinite spousal maintenance in every case. Uncertainty, to the extent that it is realistic uncertainty, warrants a indefinite spousal maintenance award. Reif v. Reif, 426 N.W.2d 227 (Minn. Ct. App. 1988); Reinke v. Reinke, 464 N.W.2d 513 (Minn. Ct. App. 1990). The certainty or uncertainty is often judged by the strength of expert testimony about future earning ability. Griepp v. Griepp, 381 N.W.2d 865 (Minn. Ct. App. 1986). The statutory standard has been simply explained as: transitional spousal maintenance addresses uncertainty as to when, indefinite spousal maintenance addresses uncertainty as to whether someone will be self-supporting. Maiers v. Maiers, 775 N.W.2d 666, 669 (Minn. Ct. App. 2009). Israni v. Sidhwani, No. A20-0707, 2021 WL 1081779 (Minn. Ct. App. Mar. 22, 2021) poses the uncertainty question in an interesting light where the wife was a physician who has suffered a traumatic brain injury. The wife’s ability to regain her future ability to practice medicine was at best uncertain. The district court acknowledged that it did not have sufficient evidence to predict the wife’s future recovery but still awarded only transitional maintenance. The court of appeals found that it was error for the district court to award only transitional spousal maintenance where there was no evidence to show the wife would ever be able to regain her prior level of employment.
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