In calculating alimony, income will be imputed to the owner of non-income producing assets. In a case captioned Sherlock v. Sherlock, the husband appealed the final judgment dissolving the parties’ marriage. The parties were married for seventeen years. A seventeen year marriage is rebuttably presumed to be a long-term marriage. The husband was awarded non-income producing assets. These assets were comprised of financial accounts and real estate.
The trial court denied husband’s request for permanent alimony. The trial court ruled that the husband could earn income from his real estate. The court also ruled that the husband would earn income from his investments. The trial court imputed income to the husband based upon his investments and his real estate. The trial court found that a conservative return on investments of three percent per year would produce income for husband without requiring him to invade principle. The trial court did not require the husband to deplete the principle or sell his personal property.
The Florida Court of Appeal affirmed the trial court’s ruling. It held that it was appropriate to impute income to the husband from his non-liquid, income producing assets. The Court found that it was appropriate to require the husband to earn a three percent return on his non-income producing assets.
The primary factors that courts consider in awarding alimony are the payor’s ability to pay and the recipient’s need for alimony. It is rebuttably presumed that permanent periodic alimony is appropriate for a long-term marriage. Ordinarily a payee is not required to deplete assets in order to maintain that party’s standard of living. However, in determining a need for alimony and the ability to pay, the court must consider all sources of income available to the parties, including income that is available from investments. A court should take into account the fact that one party has a source of income available and refuses to use it. A court should impute income that may be reasonably earned on these assets. When a party can earn income without risk of loss or depletion of principal and does not do so, a court may impute a reasonable rate of return to that property based on its prudent use.
Income should be imputed to a party’s non-liquid assets, including, without limitation, financial holdings and real estate. A court may consider income that is available to a spouse through investments of any assets, not only liquid assets. It is proper for a court to impute a reasonable rate of return of three percent.
To speak with an alimony attorney in Wellington, Florida, contact Matthew Lane & Associates, P.A. at (561) 651-7273.