Alimony in Gross Must Not Exceed Present Estate

A pair of recent Alabama cases stand for the same principle, so we’ll combine them in the same note.

It takes nerve to appeal an award of $5,000 on the grounds that you don’t have it. And yes, this husband must have nerve. In Pylant v Pylant, Case No. 2150787 (Ala. Civ. App. February 10, 2017), he reported that his assets included only two automobiles in which he had a total equity of less than $2,000. He admitted that he owned some clothing, tools, and furnishings, but he argued they weren’t worth anything to speak of. The trial court ordered alimony in gross of $5,000 and periodic alimony of $250 per month, stating in its opinion that the husband “was not completely candid at trial about his finances” and that “he is fully financially able to pay the small sum awarded to the [wife].” The husband appealed.

The appeals court said that whether the husband could pay the amount of alimony in gross was not the issue. Instead, alimony in gross is paid out of the estate of the spouse at the time of the divorce. This means it cannot exceed the value of the estate at the time of the divorce. So the appeals court reversed, saying “[The] alimony-in-gross award in the present case exceeds the value of the husband’s estate at the time of the divorce, and it is therefore due to be reversed.” Because property settlement and alimony awards are interrelated, the appeals court reversed both decisions for the trial court to reconsider upon remand.

Is this a victory for the husband? Certainly in the short term, but the trial court easily could re-balance the current support and property division to accomplish a similar wealth effect, and the appeals court has certainly left the door open for that strategy.

And in the case of Johnson v Johnson, Case No. 2150936 (Ala. Civ. App. March 3, 2017), the appeals court considered the same principle in the case of an elderly divorcing couple. The husband in Johnson argued on appeal that his estate did not equal the award of $20,000 in alimony in gross from the trial court. The appeals court agreed and reversed. “The record does not contain sufficient evidence from which the circuit court could have inferred that the husband’s present estate was valued at $20, 000, much less a greater amount from which $20, 000 could be equitably deducted.”

On dissent, Judge Thompson argued that the trial court’s award was not alimony in gross but was property settlement, intended to compensate the wife for investments she had made in the marriage. “Given the nature of the wife’s request, i.e., that it was for recoupment of a portion of her claimed financial contribution to the marriage and not a form of future support, as well as the trial court’s specific determination that it had fashioned a ‘property settlement, ‘ I believe the main opinion errs in characterizing the property settlement as an award of alimony in gross.”

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