Part VI: Using "Principal" Awards
Suppose in another divorce* that a wife was awarded permanent spousal maintenance and retirement assets at the time of the dissolution from her husband. Both parties are now 68 and the husband is seeking termination of his spousal obligation based on his retirement. It is undisputed that the wife can meet her current monthly living expenses if she invades the “principal of the retirement account” she was awarded in the divorce.
What is the result?
In the Winer case, the Appeals Court affirmed the termination of a husband’s spousal maintenance obligation and reserved jurisdiction over a future spousal maintenance award. The wife in Winer could currently meet her monthly living expenses using the investment return on her retirement assets awarded to her from the divorce. However, it was uncertain whether that would always be the case, or if eventually, the wife would need to invade the principal to support herself. Therefore the Court decided that because the wife could currently meet her living expenses, spousal maintenance could be terminated. But the “speculative” nature of the invasion of principal was reserved for some point in the future.
It is also important to note that, under the Dougherty case, to require a spouse to invade the principal of their property settlement . . . would have required the parties to include a provision in their judgment an decree stating their intention.
Spouses are not expected to invade the principal of their property settlement to meet their monthly living expenses
Absent a specific provision in the parties’ judgment and decree, an oblige is not required to use the principal in his/her retirement account during retirement years