Colorado Maintenance Law to Change in 2014

Colorado MaintenanceColorado maintenance law is about to undergo a significant change.  After lengthy and involved debate, the Colorado legislature passed a new law that will go into effect on January 1, 2014. One of its primary goals is to promote consistent maintenance awards across judicial districts by implementing “advisory” maintenance guidelines.  These advisory guidelines utilize a formula for both temporary and permanent maintenance awards and also suggest how long maintenance should be paid.  While lawyers in the area are uncertain how these advisory guidelines will be utilized from district to district, there is a lot of potential to have Colorado maintenance determined by simple mathematical equations.

Per the new advisory guidelines, the Court first determines how much each party earns, the marital property each party is awarded, the financial resources available to each party, and reasonable financial need.  After making this determination, the Court then goes on to consider the amount and duration of the award (this is where the formula comes in). After doing so, the Court then considers if, and shall only award maintenance if,  the spouse seeking maintenance lacks sufficient property to provide for himself or herself, is unable to support himself or herself through appropriate employment, or is the custodian of a child whose condition or circumstances makes it inappropriate to seek employment outside of the home.

The formula used to determine the amount and duration of the award is as follows: the amount of maintenance is equal to forty percent of the higher income (gross monthly adjusted income) less fifty percent of the lower income. The result is the maintenance amount. However, when that amount of maintenance is added to the gross monthly income of the recipient, it shall not result in the recipient taking in excess of forty percent of the parties’ combined monthly adjusted gross income.

As for the duration of maintenance, the advisory guidelines include a chart to follow which increases the time to pay maintenance for longer marriages, with the shortest term being 11 months for marriages of 36 months or longer, with the chart topping out at a term equal to half the length of the marriage for marriages between 150 and 240 months.   Per the chart, maintenance would not be awarded in marriages less than 36 months unless the Court finds it can not make an equitable distribution of the marital property, and for marriages longer than 20 years, the Court would make an independent determination as to an appropriate term, but that term must not be shorter than 10 years without making specific findings as to why a shorter term is appropriate.   The advisory guidelines read that they shall not apply to cases where the combined monthly income between the parties exceeds the uppermost limit identified in the child support guidelines (currently $240,000.00 but set to increase in 2014 to $300,000.00).

The guidelines also have an interesting provision for people who are not represented by counsel but who reach an agreement on maintenance. If the parties’ situation is one that falls within the parameters of the guidelines, and their agreement is to either waive maintenance altogether or to accept an amount that is outside of the advisory guidelines, the Court is prohibited from sanctioning the agreement unless it is certain that the parties are aware of the guidelines.

There are many nuances to the law, as the guidelines set out additional factors the Court should consider, such as potential income of recipient spouse, the financial resources of the payer spouse, the lifestyle during the marriage, the distribution of marital property, historical earnings, the award of temporary maintenance, how one spouse may have contributed to the educational or occupational advancement of the other, and several others.  And the Court still has the ability to award more property to a lower earning spouse and then reduce the amount or term of maintenance, or eliminate the need altogether. However, the general reading of the guidelines suggests that these considerations are secondary to the initial findings and calculations.

As to temporary orders (temporary orders are orders entered near the beginning of your case, and they are in place until final orders are entered,)  the same formula is utilized to determine amount but the term is not necessarily determined as typically, temporary maintenance is in place until final orders are entered. For temporary orders, the guidelines specifically call on the Court to consider the payment of family expenses and debt in allocating maintenance. This provides a greater ability to tie the award of Colorado maintenance at temporary orders to expenses that have to be paid.

Again, we are uncertain as to how these advisory guidelines will be utilized by the Courts moving forward, and the law is clear that these advisory guidelines do not create presumptions.  We do have some experience in that currently, there is a formula to be utilized for temporary maintenance. That formula does create a presumption, and it is heavily relied upon by Courts at the temporary orders stage.  Further, as relying on formulas that have the potential to significantly reduce litigation, it seems likely that these formulas will be applied routinely to future cases.

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