If you are going through a divorce or a legal separation and find yourself negotiating spousal support, be especially careful before you accept the terms of the agreement. Modifying a spousal support obligation is not as easy as you may think. It's not as if you can simply walk into a court and ask the judge to modify the order based on the fact that your ex-spouse recently acquired access to funds. Unfortunately, the process is a little more complicated than that.

The test for modifying a spousal support obligation in California has always been whether or not there has been a "material change of circumstances." A material change of circumstances means a reduction or increase in the supporting spouse's ability to pay and /or an increase or decrease in the supported spouse's needs. Thus, it would seem obvious that grounds for a modification of support would exist anytime a party acquires access to retirement funds or if his or her assets significantly appreciate in value. Think again.

In a recently published opinion entitled "In Re Marriage of Dietz," the Appellate Court decided that the trial court erred by concluding that the accessibility and increased value of a retirement account, previously awarded to the wife in a stipulated judgment, constituted a material change of circumstances justifying a decrease in the husband's monthly spousal support obligation.

On the surface, this opinion seems to contradict the holding in In re Marriage of Schmir. In Schmir, the Appellate Court affirmed the trial court ruling that there were material changes of circumstances to justify modification of support after Ms. Schmir became eligible to withdraw funds from her retirement account without penalty. However, the Dietz case was decided after the terms of the parties' marital settlement agreement were scrutinized by the Appellate Court, which held that the trial court was required to give effect to the husband's and wife's intent, as expressed in the agreement.

The stipulated judgment that Mr. and Mrs. Dietz signed expressly acknowledged their expectations that the value of the subject retirement account might increase. The agreement stipulated that each party would receive one-half of the community property interest in the retirement accounts, including "any and all contributions made up to the date of separation, and any increase or decrease in value of such assets related to market conditions."

Based on this decision, it would seem prudent for anyone entering into a marital settlement agreement, containing a spousal support order, to insist that the judgment include a detailed list of future events that will constitute a material change of circumstances. For example, if the parties anticipate a penalty-free withdrawal from retirement funds at a future date, it should be specifically indicated in the agreement that the occurrence of such event will constitute a material change of circumstances.

The Dietz decision also serves to remind us that drafting a spousal support agreement can be a highly technical exercise that requires knowledge of all possible pitfalls. Through the years, the courts have created special rules pertaining to the amount, duration, modification, and tax consequences of spousal support orders. When negotiating spousal support, pay particular attention to the proposed terms of the agreement. As Mr. Dietz learned, the failure to do so can have severe long term consequences.

Written by: Donald P. Schweitzer

Where there is a change in circumstances of the child or of either parent, a modification of the amount of child support may be requested and will be granted where appropriate. Change in Circumstances Some changes in circumstances are sufficient to warrant a modification of custody or visitation but are not substantial enough to require a change in child support. A parent may move or a child may change schools, either of which might cause a change in the visitation schedule, without a change in child support. A child might become entitled to receive some type of benefit, such as a dependent child Social Security benefit from a stepparent. Many courts will not adjust child support merely because the child now has more resources. Other changes in circumstances do require a modification of child support. Change in Circumstances of Parents Where a parent loses a job because the only factory in town has shut down, the parent who lost the job may not be able to get another job at a comparable pay and a reduction in child support may be warranted. Where a parent gets a new job paying substantially more money, the change in circumstances of the parent warrants an increase in child support. If a parent becomes disabled and retires on a disability pension and Social Security disability benefits, the parent is entitled to request a modification. It should be noted that the disabled parent is not entitled to stop paying child support and assume that the child's social security benefit will be sufficient to meet the parent's child support obligation; modification by a court or tribunal is required. The fact that a parent remarries or subsequently has another child is usually not the type of change that requires modification of child support. If, however, the parent takes a job in another state, the end of sharing custody and the cost of visitation may require reconsideration of child support. Change in Circumstances of the Child A change of school or a change of after-school activities are not the type of circumstances that require modification of child support. On the other hand, when day care expenses or after school care is no longer needed, child support for such expenses should end, requiring a modification in child support. When a child has extraordinary medical expenses, those expenses may be added to basic child support, requiring modification. A child may inherit a large trust fund responsible for schooling or other expenses included in the child support obligation. The child support obligation should be adjusted to reflect the trust fund payment of this expense. When there is a change of custody, it is obvious that there must be a modification of child support.