California Divorce Law...

Here are the factors the court considers in granting spousal support:

• The extent to which the earning capacity of each party is sufficient to maintain the marital standard of living.
• The contribution the recipient made to the payer's education and career.
• The time the recipient spent in "domestic duties" as it hurt the recipient's earning capacity.
• The payer's ability to pay.
• The needs of both parties, based on the marital standard of living.
• The debts and assets of both parties.
• The impact on the children of having the care-giving spouse working.
• The age and health of the parties, including any effect of emotional distress resulting from domestic violence.
• Any immediate and specific tax consequences.
• Anything else the court thinks relates to the justice and fairness of the support amount.

But the court may deny spousal support if the recipient has enough income from a job or from property.

One goal of spousal support is to make the supported party self-sufficient in a number of years equal to half the duration of the marriage.

However, for marriages of 10 years or longer, this is not necessarily the case.

Sections 4320 - 4323.

Cases:

Kerr (No. D027224, Court of Appeal, Fourth District, Division 1, California, decided Dec. 23, 1999).

The husband in this case was Vice President for Engineering at Qualcomm. The divorce occurred in 1993. It had been a 20 year marriage, and there were two children.

In 1996, the lower court had awarded 40% of value in the husband's stock options which he would exercise before April 1, 2003, and 25% of value in the husband's options he would exercise after that.

April 1, 2003 was just after the youngest child turned 18. So, essentially, 15% of the options went toward child support and 25% went toward spousal support.

Although the ruling does not explicitly mention this, it is the case that between 1996, when the award was granted, and December, 1999, when the appeals decision was issued, Qualcomm stock value rocketed from approximately $5 dollars per share to approximately $175 per share, an increase of approximately 3,500%.

This appeal was decided on December 23, 1999, by which time the enormous gains in Qualcomm stock were apparent to the judges.

By the time the appeal was heard, it was clear that the 40% option award generated an amount to the wife and children that was wildly larger than the lower court had expected.

So the underlying question is: who benefits from that windfall?

The court concluded that the wife was entitled maintain her standard of living from during the marriage, but not more.

The children, however, were entitled to share the father's increase -- up to a point.

The court sent the case back to the lower court to translate that vague sentiment into a specific reduced percentage of option value, below the 40%/25% the lower court had originally set.

The appeals court also ordered the lower court to put a maximum on the cash value of the options that the wife and children could receive.

Note: By putting a maximum, but not a minimum, on the stock options' future cash value, the court was perhaps making the wife and children assume more risk than was intended.

Another Note: This was an appeal from the original decision, not a request for modification. But the appeals court apparently used its knowledge of what actually happened to the stock after the decision in making its award.

Another Note: The lower court had used the 40% and 25% figures to avoid repeated hearings on the options. But, as we see here, that may not have worked.

Yet Another Note: The husband has a lot of power in the original order. If he simply holds off exercising his options until 2003, the wife gets a smaller share of the proceeds. There is no requirement in the order that the wife be able to compel the husband to exercise "her" share of the options at her request.

Stephenson (1995) 46 Cal Rptr 2d 8, 39 CA 4th 71 (If a spouse is not currently working, for the purposes of setting spousal support, the court would determine "earning capacity." That is, the court would determine the amount of money the spouse is reasonably capable of earning, based on a reasonable work regimen, the health, age, education, marketable skills, and work history of the spouse, and the job market.)

Olson (1993) 17 Cal Rptr 2d 480 (court may consider retirement funds as available for spousal support even if not withdrawn; though it would be very unlikely that a court would do so for a person under age 59 1/2 when a penalty would apply for withdrawal).

Smith (1990) 274 Cal Rptr 911 (court must consider standard of living, but need not order payments necessary to reach it; husband was working 60 hours a week and wife was overspending that income during marriage to produce marital "standard of living," and court was entitled in its discretion to set alimony at a level that did not reach that standard of living).

Email this page on to a friend.

Disclaimer: We are not giving legal advice. No warranties. We disclaim all legal liability. More...

Click here to go to top California divorce law page.

Click here for the California divorce legal table of contents.