Jan 31, 2023

High-Net-Worth Divorces in DC and Maryland: What is the Standard of Living?

Jan 31, 2023 - Family Law by |

Alimony is a periodic payment made by one former spouse to the other after a divorce. The purpose of alimony is generally considered to be rehabilitative – that is, to give an opportunity for the receiving spouse to become self-supporting.

In most cases, alimony can only be awarded before the end of the marriage. If you fail to make a claim for alimony as part of a divorce, you cannot come back later after the marriage has been legally dissolved and start an alimony claim. The Supreme Court of Maryland has noted “[t]he longstanding rule in Maryland…is that the right to claim alimony is extinguished at the time of the severance of the marital relationship.”

If you’re looking for the best possible alimony determination from the judge during your divorce proceedings, a Bethesda alimony lawyer can help you.

Factors Considered When Determining Alimony

In the state of Maryland, by statute, there are many factors considered by the court when determining the amount and duration of alimony and/or spousal support payments. These include:

Marital Fault – Maryland has “no-fault” and “at fault” divorces. A “no-fault” divorce is when, prior to filing for divorce, the parties have lived apart and separate (without cohabitation or sexual relations) for 12 months without interruption. Additionally, “mutual consent” is a relatively newer “no-fault” ground for divorce in Maryland. A judge can grant an absolute divorce on the ground of “mutual consent” without a waiting period. In a “no-fault” divorce, there are no alimony ramifications. However, in an “at fault” divorce, which may be caused by abuse, adultery, infidelity, etc., Maryland will often factor this into alimony by requiring the offending party to pay more – in essence, a punitive payment. 

Custodial Status – A Maryland judge will definitely consider custodial status when making a decision about alimony payments. This means that the amount of alimony being ordered will be partially contingent on whether the spouse receiving alimony has child custody. Custodial spouses typically receive higher alimony payments.

Standard of Living – Standard of living is considered by the judge when determining alimony payments. This requires an evaluation of the lifestyle of the alimony-receiving spouse during the marriage. More details on evaluating “Standard of Living” are discussed below.

Evaluating the Standard of Living for Purposes of Alimony

Evaluating the standard of living of the couple applies prominently in high net-worth divorces. The legal principle here is that, after a divorce, the spouses should be able to continue to have a living standard to which they were accustomed during the marriage. In high net worth divorces, the receiving spouse may get a higher alimony award because he or she may have no earnings, or substantially less earnings, than the other spouse. Through an award of higher alimony, the court will try to allow both spouses to live up to the lifestyle they have been used to. 

How do you show “standard of living” for the court? In most cases, each spouse will provide evidence of the lifestyle they enjoyed as a married couple. This can be done through live witnesses, income statements, financial documents, and other evidence that attests to the standard of living. 

As a matter of strategy, the spouse that will be required to pay alimony will typically try to downplay the standard of living, while the recipient spouse will attempt to embellish the standard of living. It’s the responsibility of the judge to make a realistic estimation of the standard of living of the couple. 

There are many different facts that show evidence of a high standard of living. Examples include: 

  • The size and value of the marital home
  • The existence and values of second homes and vacation homes
  • The value of home furnishing
  • The frequency and costs of vacations
  • The types and purchase price/market value of automobiles, boats, yachts, shares in airplanes, etc. 
  • The existence of luxury items such as jewelry, furs, artwork, clothing, etc. 
  • Memberships in country clubs, exclusive fitness centers, sports clubs, polo clubs and the like
  • The frequency and cost of fine-dining experiences
  • The quality and cost of food and beverage consumables such as gourmet foods, fine wines, fine liquor and more
  • The existence of household staff such as house cleaners, chefs, drivers 
  • The quality and quantity of luxuries provided for children including private schooling
  • The quality and quantity of luxuries provided for household and family pets, including the existence of unusual pets like horses
  • Shopping habits and expenses related thereto
  • Expenses related to expensive hobbies such as golf, art collecting, wine collecting and the like
  • Entertainment and gifts provided to friends, family, business associates and others 

Of course, this is not an exhaustive list, and the particular and unique lifestyle of the spouses before their separation and divorce will be highly individual.

How Exactly Is Alimony Calculated in Maryland?

Calculation of alimony is generally conducted by the Maryland family court judge on a case-by-case basis. While some states have a fixed alimony calculation formula, in most cases the final amount and duration of alimony awarded, if any, is based on the discretion of the judge. If you are a high net-worth couple, the judge will take a hard look at your income, expenses and lifestyle in making an alimony determination. 

Schedule a Free Initial Consultation with Bethesda Alimony Lawyer Brandon Bernstein

If you are planning to start the process of divorce in Maryland and are part of a high-wealth couple, it’s important that you understand how your lifestyle impacts the alimony to which you are entitled or which you must pay to your spouse. Please contact us for a free consultation. Call 240-395-1418, or  REQUEST AN APPOINTMENT ONLINE today.