In calculating alimony, income received by the alimony recipient from retirement accounts (such as 401ks) is considered in determining the alimony recipient’s need where principal in these retirement accounts will not be invaded for purposes of support. In a case captioned Stoltzfus v. Stoltzfus, the Florida Court of Appeal recently had before it a case in which the husband challenged the trial court’s award of alimony. The husband’s challenge was based upon the amount of alimony that the trial court awarded to his wife. The wife also cross-appealed based upon the amount of alimony that she was awarded. The husband alleged that the lower court failed to take into account income that the wife received from her retirement accounts in determining the wife’s need for alimony. The husband pointed out that the wife received income from two 40 IK accounts that wife received as part of the equitable distribution of the parties’ assets. The trial court had found that the 40 IKs were generating income , but found that the wife was not be able to receive that income until she was sixty-five.
The Florida alimony statute defines income to include salaries, bonuses, commissions, earnings as independent contractors, disability benefits, annuity and retirement benefits, worker’s compensation benefits, interest, dividends, benefits from annuities, income from trusts, and any other payments received, with the exception of disability benefits paid by United States Department of Veterans Affairs and unemployment compensation and reemployment assistance as set forth in Chapter 443. The Court of Appeal held that retirement accounts distributed to an alimony recipient which yield income to that party should be considered income to the recipient for purposes of determining the recipient’s need for alimony where the principal of the account will not be needed to be invaded for the purpose of the recipient’s support. Furthermore, a court may impute income based on a reasonable rate of return from retirement account. The Court of Appeal found that the trial court erred when it failed to consider interest income from the wife’s 401Ks in determining alimony for the wife. Additionally, the Court of Appeal found that the trial court erred in awarding alimony to the wife based upon her annual expenses without support for these expenses in the record. Accordingly, the Court reversed the trial court’s ruling.
If you have questions or you would like to speak with a divorce attorney in Wellington, Florida, contact Matthew Lane & Associates, P.A. at (561) 651-7273.