In the July 26, 2023, Court of Appeals opinion in Downing v. Downing, 440 S.C. 322, 891 S.E.2d 375 (Ct. App. 2023), the Court of Appeals affirmed the family court’s denial of a retired Husband’s alimony reduction request. It is the first reported decision interpreting S.C. Code § 20-3-170(B), which addresses factors for the family court to consider in modifying alimony when a supporting spouse retires, since its 2012 enactment.
In Downing, the parties divorced in 2011, with Husband agreeing to pay Wife $3,500 per month in permanent periodic alimony. Upon his retirement in 2018 at age 67, he filed an alimony reduction action, alleging that his income had substantially decreased from the $13,050 per month he was making at the time of the 2011 agreement. At both the temporary hearing and at trial, the family court denied his alimony reduction request. The trial court further ordered him to contribute $42,000 towards Wife’s attorney’s fees. Husband appealed.
The Dowling opinion is very math oriented and there is substantial discussion on Husband’s income streams and actual income. It appears some of his ongoing income was based on deferred compensation from his work prior to retirement. Husband argued those funds should not be treated as income for alimony purposes because that compensation would eventually end. The Court of Appeals rejected that argument.
The family court further found, and the Court of Appeals affirmed, that Husband had been incomplete and inaccurate in his financial disclosure. The family court concluded that Husband’s income was $23,666 per month. Husband acknowledged that his net worth had increased by $1.2 million since the alimony agreement.
Meanwhile Wife’s income remained low and her expenses had increased, partially due to her progressive multiple sclerosis. Even Husband acknowledged that his alimony obligation should not terminate—arguing instead for a reduction to $2,050 per month. The family court found Wife had a $400 per month shortfall which would increase soon after trial to $1,000 per month given increased health insurance expenses. Any reduction in alimony would increase that shortfall.
Given all these factors, the Court of Appeals determined the family court did not error in refusing to reduce Husband’s alimony obligation. Given Wife’s substantially worse financial condition, Husband’s substantial income and assets, and Husband pursuing this unsuccessful request for alimony reduction, the Court of Appeals also affirmed the $42,000 attorney fee award. It rejected Husband’s argument that the amount of Wife’s attorney’s fees was unreasonable, “in light of Husband’s unwillingness to be forthcoming about his financial situation.” It noted “Wife’s attorney’s fees were substantially related to services rendered in preparing a motion to compel discovery, issuing subpoenas to financial institutions in an attempt to discern Husband’s financial position, and preparing for the two-day final hearing.”
After South Carolina enacted § 20-3-170(B), I wrote about the difficulties in predicting how retirement would affect alimony. Two of the reasons I predicted alimony might not drop as much upon retirement as the paying spouse might hope were the greater income such spouses typically still have upon retirement and such spouses’ ability to draw upon greater assets, particularly retirement assets, to pay alimony. Both of these considerations ended up being part of the basis Mr. Downing did not obtain an alimony reduction upon his retirement. The cautious approach I have taken for my retiring clients appears to have been the correct one.
I doubt Mr. Downing filed this case expecting the family court would find his income had increased. Yet he is not the only supporting spouse to do so. Last year I successfully overturned an alimony reduction based, in part, by demonstrating Husband’s income had actually increased. Seeking a reduction in alimony when one’s income and net worth have actually increased will never likely be viable.
Thank you Mr. Foreman.