Posted by Nydia Streets of Streets Law in Florida Alimony
Can withdrawals from a retirement account be considered income when calculating a party’s ability to pay alimony? The answer depends on what type of withdrawals are being made, such as discretionary or mandatory. This was an issue in the case Rodolph v. Rodolph, 4D18-3167 (Fla. 4th DCA May 4, 2022).
The former husband filed a petition to modify or terminate alimony after he stopped working due to health issues that arose. At the time the parties originally divorced, the former husband was ordered to pay the former wife permanent alimony of $1,700 per month. The former husband also alleged the former wife no longer had a need for alimony because she was living with her daughter, she had received a substantial payment as her share of the former husband’s retirement account, and she was receiving disability payments. At a trial on the petition, the former wife testified that many of the expenses she listed in her financial affidavit were incorrect and that she gave donations of over $200 per month to religious organizations. The trial court summarily denied the former husband’s petition without making any factual findings regarding the former wife’s expenses. The former husband appealed.
The appellate court reversed the denial of the former husband’s petition, holding “The findings in the Final Judgment, however, are sparse and conclusory at best, especially regarding Former Wife’s needs and sources of income. Aside from referencing Former Wife’s monthly income and generally concluding that her ‘needs were not being met,’ the trial court made no specific factual findings regarding the expenses listed in Former Wife’s amended financial affidavit, many of which were disputed by Former Husband at trial. Furthermore, although the trial court noted Former Wife’s investment account reflected a balance of $237,905.99, it failed to consider whether there was income available to Former Wife from that asset without depleting it, such as income from interest.”
The court further held “In addition to not making the required findings, the trial court further erred in treating Former Husband’s discretionary withdrawals from his retirement account as income for purpose of determining ability to pay. It is well established that discretionary withdrawals from a retirement account cannot be treated as income for purposes of a party’s ability to pay alimony. [. . .] Here, Former Wife presented no evidence that Former Husband’s retirement account was subject to a mandatory or minimum IRA withdrawal. Therefore, the trial court erred in treating Former Husband’s discretionary withdrawals as income. At most, the trial court could have imputed income to Former Husband from interest earned on the retirement account.”
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