Changes in MN Law: Now Debt is Considered in Setting Standard of Living

MARITAL STANDARD OF LIVING AND DEBT

The laws regarding spousal maintenance in Minnesota were changed effective August 1, 2024. Spousal maintenance (or alimony) is one of the most litigated issues in Minnesota, primarily because there are few guardrails to guide judges and spouses. Spousal maintenance can be a complicated issue and involves many different factors. This article provides a simple explanation for purposes of explaining some changes in the law.

Step One

Step one in calculating spousal maintenance is determining a party’s “need”. Need is determined by analyzing a spouse’s monthly expenses as compared to the spouse’s income. If a spouse doesn’t earn enough income to cover his/her expenses, then the shortfall is that spouse’s "need".

Step Two

Step two involves looking at the higher income-earning spouse's finances to determine whether s/he earns enough income to pay his/her own monthly expenses with a surplus each month large enough to help meet the lower income-earning spouse's needs. The analysis includes looking at expenses and income for both spouses.

What Are Reasonable Expenses?

The basis for maintenance hinges on monthly expenses. How do we decide whether expenses are reasonable? The law states (the old law, and the new version) we rely on the marital standard of living to determine which expenses are reasonable. The new law though adds a new consideration in this analysis and states we must consider “the extent to which the standard of living was funded by debt”.

Historically, judges may have considered debts when determining an appropriate amount of spousal maintenance, but there was no specific mention of debt in the law. If the parties incurred debt to maintain their standard of living, it should not be assumed they will continue to incur debt after the dissolution of marriage. An obligor should not have to incur debt to support a former spouse. If there is not enough joint income to cover each party’s expenses, then both parties will end up with less available income to meet their needs.

If you are considering a divorce and have questions about spousal maintenance, contact Christine Callahan, an experienced family law attorney, for more information.