In a previous blog, we discussed the results of a sociological study that found that a late-in-life divorce – or “grey divorce” – can have an adverse effect on the standard of living of both spouses. That study also concluded that women who were going through a divorce at age 50 or older suffered a 45 percent decline in their standard of living (“SOL”) while men experienced only a 21 percent reduction.   Scary statistics- particularly if you are one of the multitude of “grey divorcees” trying to regain some semblance of normalcy after the breakup of your marriage.

In this blog, we will discuss the importance of presenting a solid case on SOL to the court.

How is the SOL determined?

In simple terms, it is a reflection of the economic wellbeing of a person and is based on, among other factors, the disposable income of the parties as well as their reasonable needs and expenses during the marriage.

Why is SOL important?

In order to award post-separation support or alimony in North Carolina, the dependent spouse must provide evidence as to what the “accustomed standard of living” was during the marriage, among other elements. Quoting from a recent North Carolina Court of Appeals case, SOL “contemplates  the economic standard established by the marital partnership for the family unit during the years the marital contract was intact. It anticipates that alimony, to the extent that it can possibly do so, shall sustain that standard of living for the dependent spouse to which the parties together became accustomed.” Williams v. Williams, 299 N.C. 174,261 S.E.2d 949 (1980)

With grey divorcees facing an expected downturn in their SOL, it is critical that the court is presented with a full and detailed analysis of the SOL. Often, not enough time and effort is invested in building a solid case of SOL for post-separation support and alimony trials. As a result, the judge is left with little to go on. The more details that you can provide regarding the living expenses incurred during the marriage, the more likely the court will understand the SOL and be able to award appropriate support. There is a difference between you testifying that “the family went on one vacation per year that cost an average of $10,000.00” and the family took one vacation per year that cost $10,000.00 on the average to such locations as Abu Dhabi in 2020, Iceland in 2019, and the south of France in 2021. The cost included airfare, hotel accommodations and meals. “We stayed at five-star resorts. The costs were paid with our American Express. Here are the statements. Here are photos taken of those trips.”

Your SOL is reflected in the residence you own and occupy, the types of motor vehicles you drive, where you go on vacations,  and your overall consumption of foods and services – in short, how you spend your disposable income.

What can you do?

1. Start gathering your financial records for your attorney, including income tax returns, bank records, investment records, credit card statements, recent paycheck stubs, employment benefits statements or pamphlets (from present and prior employers), retirement account statements, Social Security benefits statements and other important financial records. You should provide documents for at least twelve months prior to the date of separation. Documents evidencing significant expenditures for goods or services may be relevant.

Discuss with your attorney exactly what they will need in the way of documentation.

2. Be prepared to discuss with your attorney details of the SOL achieved during your marriage. Focus on types of expenses, such as family vacations (destination, date, costs, who paid), family automobiles (how often were family automobiles replaced, make and model of automobiles); educational expenses (private or boarding schools), activities (PSLs, club memberships, season tickets); housekeeping and maintenance (housekeeper, landscaping and pool services) and other goods and services.
3. Decide with your attorney whether to retain the services of a divorce financial expert.

A  certified divorce financial analyst (CDFA)  can analyze both spouses’ income and income sources, calculate projections of disposable income (including income from pensions and other retirement plans from prior employers), can critically analyze the living expenses claimed by the parties, and can render opinions as to the actual SOL achieved during the marriage.    A CDFA is a valuable resource for analyzing settlement proposals with the goal of determining whether the offer is realistic and doable.   Also, a CDFA can work with you to come up with a realistic budget for future use.

Retaining a divorce financial expert to join your “team” is not for all divorces. Because the financial analyst will charge for their services, you will want to make sure that the benefit of having a CDFA on your team is not outweighed by the costs. If you can afford to retain a qualified, experienced divorce financial expert, your evidence as to SOL may improve your chances of receiving a better alimony award.

Offit Kurman handles simple and complex financial issues in family law, including alimony, child support and equitable distribution. If you have questions or if you are or will be in need of legal assistance in connection with your family law matter, our family law practitioners at Offit Kurman are available.