If you are paying alimony in Minnesota and are thinking about retiring, there are several things you need to know. First, “alimony” and “spousal maintenance” mean the same thing. In Minnesota, the divorce statute uses the term “spousal maintenance.” However, I usually use the word “alimony,” because everyone seems to know what that term means.
Many people retire at age 65. Many people who pay spousal maintenance or alimony are planning on retiring at age 65. Of course, they expect their spousal maintenance or alimony to end when they retire. They should not necessarily count on this.
There have been two recent cases at the Minnesota Court of Appeals that pertain directly to retirement and spousal maintenance. Both cases were on their way to the Minnesota Supreme Court for review, but for various reasons the appeal was terminated.
Essentially, under the current law as established by the MN Court of Appeals, termination of a spousal maintenance obligation when someone retires at age 65 is not automatic. The courts should consider a variety of factors, including whether the retirement is being done in good faith.
If the spouse receiving the alimony objects and and make a “colorable” claim of bad faith, the burden shifts to the person paying alimony to show that the decision to retire was made in good faith. If someone retires at age 65, this weighs in favor of a finding of good faith, but it is not conclusive.
The court also looks at the income from retirement asssets of the person paying alimony, to see whether there is enough income from that to support a continued alimony payment. Court will not consider income from retirement assets accrued during the marriage. These are considered to be marital property and to have already been divided as part of the divorce. However, courts will look at retirement income from assets accrued either before or after the marriage.
For some odd reason, the courts do not look at income from retirement assets that is received by the person receiving the alimony.
If you have questions about this, feel free to call me at (952) 270-7700.