Proposals would streamline divorce procedures and cap payments

Common sense dictates that the more contested issues that there are in a divorce, the higher will be the costs for legal fees and other professionals. One study by  a state commission recently found that divorces cost more, in particular, when the contestants are fighting about spousal support and alimony. In Utah, if there was more consistency in segments of the divorce process, people would be less engaged in litigating. This would bring the costs and time investment in a divorce down, or so the argument goes.

One problem revealed by the study is that judges are inconsistent from one case to another, which frustrates divorce litigants into not wanting to settle, which in turn further drives up the costs of divorce. One proposal applies a consistent formula to spousal support and alimony. This idea was implemented back in the 1980’s when all 50 states cooperated to reduce litigation by creating a basic formulaic template for child-support payments.

A bill now in front of the New York legislature would make it the first state to apply a formula to post-divorce alimony. It’s granted that such approaches won’t work for the Rupert and Wendi Murdoch divorces. However, for those more ordinary earning situations, calculations can be made that establish consistent ranges of alimony payments that are reasonably fair and justifiable.

Additionally, other rules can be applied to regulate the duration and to define the need for alimony. For example, the New York bill provides for alimony only if one of the spouses is a much higher earner. It also caps the amount so that the recipient does not end up earning more than the paying ex-spouse. Moreover, in any formulaic approach there must be an escape valve that takes into account exceptions and unusual fact situations.

One proposal for greater feasibility is to cap the maximum amounts to prevent unusually distorted or grossly unfair situations. Extremely top-heavy amounts at the high end of the scale encourage intensive litigation and are likely to be unfair in any analysis. Proposals like this for Utah and other states may in the future streamline the divorce process so that the costs can be kept within an affordable range.

Source: Bloomberg, “Can We All Divorce Like Rupert and Wendi Murdoch?” June 18, 2013