Opinion
20-P-425
07-01-2021
Anne M. BOOTH v. Raymond A. BOOTH.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The parties here divorced after thirty-five years of marriage. A judge of the Family and Probate Court opted to treat the husband's pension as an income stream, rather than an asset, and then granted the wife alimony of twenty percent of the differential between the parties’ incomes. On appeal, the wife challenges both the treatment of the pension as an income stream and the size of the alimony award. We remand for reconsideration.
Background. The parties were married in June 1982. They have two children, both of whom are over the age of 30 and emancipated. Throughout their marriage, the parties maintained a "middle class" lifestyle.
We draw our facts from the trial judge's findings of fact as well as the parties Joint Stipulation of Facts, which the trial judge's findings incorporated by reference.
Until his retirement, the husband was the couple's main earner. Born in 1949, the husband worked for the city of Leominster from 1969 until 2008. In 2008, he and the wife agreed that he would retire early and begin taking payouts from his State Retirement Board pension. The husband elected "Option C." This reduced the pension's annual payout somewhat, but meant that the wife would be entitled to a survivor benefit of approximately two-thirds of the current annual benefit amount. The pension pays out roughly $50,000 annually.
Around the time of his retirement, the husband typically earned roughly $70,000 in income, with a low of roughly $65,000 and a high of roughly $80,000. The judge found that since retiring, he has continued to earn approximately $13,000 per year in nonpension income annually from roadwork police details or from employment at an auto body shop. According to the judge's findings, the husband would likely soon be barred from working police details, but it was possible he would be able to continue. The husband had no health conditions that would interfere with his taking on other employment.
The parties stipulated that the husband was earning roughly $25,000 annually from this employment. The record before us, which does not include the trial transcript, does not clarify the source of this seeming discrepancy between the stipulation and the findings.
The wife, born in 1957, was the primary caretaker of the couple's children. Nonetheless, she worked regularly throughout the marriage. From 2000 to June of 2017, she worked at a church in Leominster. At the time that she left that job, she was earning roughly $34,000 annually. She left to become a caretaker to her mother, who suffers from Alzheimer's and other conditions. The Commonwealth pays her for this work at a rate comparable to what the church paid her. The parties stipulated that the husband did not oppose her resignation. At the time of trial, it was not clear how long the wife would continue to work as a caretaker to her mother. The wife has no health conditions that would interfere with her taking on other employment.
Each spouse also had modest additional sources of income. The husband received thirty-four dollars weekly in Social Security benefits. The wife received just over forty-eight dollars weekly in income from working as a bookkeeper for the church, where she previously had worked full-time, and "contributions" from her mother of $175 weekly.
The parties had approximately $70,000 of equity in their marital home. Other than that, they had limited savings and other assets.
The trial judge found that neither party was underemployed at the time of trial and neither had lost economic opportunity as a result of the marriage. Neither party committed any waste nor dissipated the marital estate.
It appears that the parties separated in June of 2017, after which the wife filed her complaint for divorce the following month. Before trial, the parties reached an agreement that resolved most financial issues. The treatment of the pension was the major issue that remained for the July 2019 trial. Following trial, the judge decided to treat the pension as income available for support rather than as an asset. She also found that the parties’ combined income and assets were insufficient for both parties to maintain the marital lifestyle after divorce.
After assessing the parties’ income, including the pension, and their respective needs, the judge awarded the wife alimony of twenty percent of the gross disparity in the parties’ incomes, to continue in effect until the death of one of the parties or the remarriage or cohabitation of the wife. Counting the alimony award, the wife was left with a weekly income of $826.22 plus the $175 contribution from her mother, and expenses of $930.90. The husband was left with a weekly income of $1191.23 and expenses of $764.08.
Discussion. "[I]n our ever complex times, various assets, e.g., pensions, stock options, bonuses, and contingencies, are difficult to categorize and value. Each case, each asset, is different and a ‘one size fits all’ rule is both impractical and potentially unfair." Casey v. Casey, 79 Mass. App. Ct. 623, 629 (2011), quoting Brower v. Brower, 61 Mass. App. Ct. 216, 221 (2004). "Therefore, judicial discretion to assess these assets ... is crucial." Casey, supra. However, "the trial judge's discretion ... is not unbounded.... It is the duty of the reviewing court to consider whether the apportionment of assets flows rationally from the judge's findings." Id., quoting Denninger v. Denninger, 34 Mass. App. Ct. 429, 430-431 (1993). "We do not substitute our judgment for that of the judge below but, rather, ‘scrutinize without deference the propriety of the legal criteria employed by the trial judge and the manner in which those criteria were applied to the facts.’ " Hassey v. Hassey, 85 Mass. App. Ct. 518, 524 (2014), quoting Iamele v. Asselin, 444 Mass. 734, 741 (2005).
"The mandatory factors for property division are now ‘the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties, the opportunity of each for future acquisition of capital assets and income, and the amount and duration of alimony, if any, awarded under [G. L. c. 208, §§ 48 -55 ]. In fixing the nature and value of the property to be so assigned, the court shall also consider the present and future needs of the dependent children of the marriage.’ ... The discretionary factors are ‘the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit’ " (emphasis omitted). Hassey v. Hassey, 85 Mass. App. Ct. 518, 522 n.10 (2014), quoting G. L. c. 208, § 34.
The judge here was faced with the choice of whether to treat the pension "as a stream of income or as a marital asset subject to equitable distribution. The stream of income would provide the wife with an interest subject to modification; the distribution of a marital asset would provide her with a fixed interest." Casey, 79 Mass. App. Ct. at 627.
The judge chose to treat the pension as an income stream, and rested that decision on the uncertainties she perceived in the parties’ futures. In her written rationale, the judge emphasized the husband's possible loss of police detail income, as well as the uncertainties in how long the wife would continue caring for her mother and whether the wife could attain gainful employment after ceasing such care. With those uncertainties in mind, the judge concluded that "[e]quitably dividing the pension[, which] would be a final and unmodifiable result ... would involve an undesirable amount of speculation by the Court as to how the circumstances of the parties will change in the future."
On appeal, the wife argues that the pension should have been treated as an asset. Without holding that the decision was an abuse of discretion, we conclude that the judge did not adequately justify her decision.
She also challenges the amount of alimony she received. Because the pension was factored into the alimony award, and we remand for reconsideration of the treatment of the pension, we need not address the alimony award directly. We do touch on the effects of the alimony award, and ultimately vacate that award, because "[a]limony and equitable division are interrelated remedies; the combination must make sense." Casey, 79 Mass. App. Ct. at 630, quoting Andrews v. Andrews, 27 Mass. App. Ct. 759, 761 (1989).
"The majority of our cases have treated retirement benefits and pensions as marital assets subject to equitable distribution." Casey, 79 Mass. App. Ct. at 629-630 (citing cases). Although of course a majority approach does not bind a judge's exercise of discretion, it does suggest that a greater degree of appellate scrutiny may be appropriate in cases where the judge treats a pension as an income stream.
In this case, the husband and wife had a thirty-five-year marriage. Throughout, both contributed, economically and domestically, so that the couple could maintain a middle class lifestyle while raising two children. Both spouses are now at or approaching reasonable retirement age, and neither party's opportunity for the future acquisition of capital assets and income appears to be meaningfully different from the other's. See G. L. c. 208, § 34.
The accumulated pension benefits are easily the greatest remaining source of wealth in the relationship. In one year, the pension pays out approximately $50,000. For comparison, in her highest-earning year, the wife earned roughly $36,000, and there was only roughly $70,000 of equity in the marital home at the time of trial.
The treatment of the pension does not flow rationally from the judge's findings. The uncertainties cited by the judge -- the husband's possible loss of detail work; the indefinite period for which the wife would be caretaker for an ailing parent -- are not insignificant, but they are hardly atypical for divorces, especially for those following long-term marriages. We appreciate that the trial court wished to avoid "undesirable ... speculation ... as to how the circumstances of the parties will change in the future," but these facts do not seem to require much speculation.
To be clear, we are not ruling that the judge's decision was necessarily incorrect. Treating a pension as an income stream to retain flexibility in the face of uncertainty is permissible. For example, we approved of such treatment in Andrews v. Andrews, 27 Mass. App. Ct. 759 (1989). However, in Andrews, one party had "been hospitalized several times for acute suicidal depression," and in fact was receiving unsuccessful inpatient psychiatric treatment in the midst of the divorce proceedings. Id. at 760. Cf. Wooters v. Wooters, 42 Mass. App. Ct. 929, 929-931 (1997) (affirming formulaic alimony award where primary earner would be undergoing serious operation that could affect earning capacity). The uncertainties observed by the judge here are not comparable.
Four other considerations suggest that the question of how to treat the pension requires further analysis.
First, treating the pension as an income stream meant that the wife was by default entitled to a significantly smaller share of the pension than she would have been were the pension treated as an asset. Under the 2011 alimony reform act, "the amount of alimony should generally not exceed the recipient's need or 30 to 35 per cent of the difference between the parties’ gross incomes." G. L. c. 208, § 53 (b ). A judge must explain an upwards deviation. Id. § 53 (e ). No comparable presumption applies in the division of assets in the marital estate, especially here, where the pension was the main asset that the couple had acquired together over the course of a long-term marriage where both spouses made economic and noneconomic contributions. Cf. Moriarty v. Stone, 41 Mass. App. Ct. 151, 157 (1996) ("The parties’ respective contributions to the marital partnership remain the touchstone of an equitable division of the marital estate"). Thus, treating the pension as an income stream appears to create a risk of inequitable results -- an issue which the judge did not address. See Dewan v. Dewan, 399 Mass. 754, 759 (1987) (rejecting 70-30 division of pension treated as asset in part because "the judge provided no additional findings to indicate why the husband should receive a substantially greater share of the pension benefits ... when the property previously had been divided in apparently equal proportions"). Cf. Sampson v. Sampson, 62 Mass. App. Ct. 366, 373 (2004) (remanding property division where "highly disproportional and apparently inequitable split in the marriage's only significant liquid assets ha[d] occurred").
Second, treating the pension as an income stream constrains the wife's personal life, but not the husband's. The award of alimony will terminate if the wife remarries or cohabitates. See G. L. c. 208, § 49 (a ), (d ). The husband is subject to no such restrictions. It is not obvious why the allocation of a pension built up over the course of a thirty-five-year marriage where both spouses contributed should be so conditioned.
Third, treating the pension as a stream of income appears to make the wife's long-run position somewhat more precarious than the husband's. At the moment, both spouses are at or near reasonable retirement age, and each of their respective prospects for future employment are dubious. Only the husband, however, has the security of a significant asset that provides consistent income past his retirement. Cf. Denninger, 34 Mass. App. Ct. at 433 ("Absent some good reason, the financial orders in a divorce judgment should not cause the standard of living of one spouse to drop perceptibly down while that of the other spouse remains high"). To be sure, the parties’ incomes can always be balanced somewhat by an award of alimony (assuming the recipient does not remarry or cohabitate). But alimony, which has a presumptive ceiling and can be terminated for a number of reasons, seems to be a relatively poor source of economic security in circumstances like these.
The record does not reflect what the wife's future entitlement to Social Security, if any, might be.
Indeed, we recognize that if the pension is divided as an asset on remand, the result may be that the husband is entitled to an award of alimony from the wife.
Fourth (and finally), the Supreme Judicial Court has often encouraged structuring divorces so as to avoid continued strife and uncertainty between the parties. See, e.g., Young v. Young, 478 Mass. 1, 9 (2017) ; Dewan, 399 Mass. at 757. See also Canisius v. Morgenstern, 87 Mass. App. Ct. 759, 765 (2015), quoting Adams v. Adams, 459 Mass. 361, 379 n.14 (2011). Treating the pension, the relationship's major source of wealth, as an asset arguably serves that end.
Conclusion. We vacate so much of the judgment of divorce as treated the pension as an income stream and determined an award of alimony. In all other respects the judgment of divorce is affirmed. The case is remanded for further proceedings consistent with this memorandum and order, which proceedings may at the judge's discretion include such further hearings as are necessary and desirable.
To be clear, nothing in our memorandum and order is meant to prevent the trial judge from factoring in the wife's Option C survivorship benefits when assessing how the pension is best treated or how much each party should receive from the pension if treated as an asset subject to equitable division.
So ordered.
affirmed in part; vacated in part and remanded