Florida Divorce: Am I Responsible for My Spouse’s Student Loan Debt?

For many people, student loan debt is one of the largest liabilities they incur in life.  If you pursue graduate education, this debt can potentially exceed the mortgage on your home.  Most people justify taking out student loans because they expect to receive a lifetime of enhanced earnings and opportunities.

As a general rule, Florida law provides that student loans incurred during the marriage are marital liabilities.  See Rogers v. Rogers, 12 So. 3d 288 (Fla. 2d DCA 2009)see also Smith v. Smith, 934 So. 2d 636 (Fla. 2d DCA 2006)Adams v. Cook, 969 So. 2d 1185 (Fla. 5th DCA 2007) (trial court erred by finding that wife’s law school loans were non-marital); Banton v. Parker-Banton, 756 So. 2d 155 (Fla. 4th DCA 2000) (reversing equitable distribution scheme where court’s treatment of student loans as marital or non-marital appeared arbitrary).

In other words, if you get a divorce, the court will presumptively find that any student loans incurred during the marriage are marital, and each party will likely be responsible for one-half of any such loans (or, the loans will offset other assets and liabilities).

This allocation of debt strikes many people as inherently unfair.  The allocation would be justified if both parties were going to share in the enhanced earnings.  But, it is inequitable to impose such an enormous financial burden on a party that will receive no associated long-term benefit with the debt.

Imagine this scenario: two recent college graduates decide to get married.  The wife takes a job working full-time as a nurse and earning $60,000 annually, while the husband decides to attend medical school. After four years, they divorce. The wife now finds herself straddled with as much as $150,000 in student loan debt, which could consume a third of her income for the next decade.

Florida courts have held that, in the absence of specific findings supporting the unequal distribution of a student loan debt, the debt must be equitably distributed between the parties.  See, e.g., Rogers, 12 So. 3d at 291.  The fact that one party will not receive any benefit from the other party’s education because of the dissolution is not a factor to be considered when allocating a marital debt for student loans.  Id.; see also Smith, 934 So. 2d at 641 (that one party will not receive any benefit of the other party’s enhanced income after the dissolution is not a factor for allocating student loan debt).  Thus, absent some other justification for an unequal distribution, controlling case law forbids a trial court from awarding student loan debt incurred during the marriage solely to one party or the other.

The holding in Rogers essentially takes the single most compelling reason for an unequal distribution of the student loan debt (i.e., that the party who incurred the debt is going to take all the benefit and only half of the burden) and flushes it down the toilet.  My personal view is that Rogers was wrongly decided.  The Legislature should consider amending section 61.075, Florida Statutes, to account for the inequity presented by Rogers.

A majority of other states reject the notion that student loan debt should be divided equally.  The Connecticut Supreme Court dealt with a similar scenario in Simmons v. Simmons, 244 Conn. 158 (Conn. 1998).  In Simmons, the wife worked as a nurse and supported the family while the husband attended medical school.  In the third year of husband’s surgical residency, he filed for divorce.  The wife asked for the value of his medical degree (valued at $3.1 million) to be allocated as a marital asset.  The Connecticut Supreme Court concurred with the vast majority of states and held that the medical degree was not subject to equitable distribution because, among other reasons, the income from the medical degree was merely an expectancy, not a presently existing property right.  Id. at 168-69.  After considering the equities of the “working spouse/student spouse syndrome,” however, the court allocated the medical student loan debt solely to the husband and awarded nominal alimony to the wife.  Id.

Similarly, in Tasker v. Tasker, 395 N.W.2d 100, 105 (Minn. App. 1986), the Minnesota Court of Appeals allocated student loan debt solely to the parent that incurred the debt, even though that spouse was unemployed.  But see Roberts v. Roberts, 670 N.E.2d 72 (Ind. Ct. App. 1996) (although husband’s degree was not marital property, his student loan debt was still a marital obligation).

In some cases, student loans are used to provide support for the family while the student spouse is attending classes.  To the extent that the loans were used to pay marital living expenses, it is proper to treat the debt as marital and allocate it accordingly.  Seee.g., Forristall v. Forristall, 831 P.2d 1017 (Okla. Ct. App. 1992) (husband’s student loans were marital because his medical education was a joint goal of the marriage and loan proceeds were used in part to support the family); McConathy v. McConathy, 632 So. 2d 1200, 1206-07 (La. Ct. App. 1994) (student loan debt was marital because it was incurred with the expectation that it would benefit the marriage, and part of loan proceeds were used to support the family); Hicks v. Hicks, 969 S.W.2d 840 (Mo. Ct. App. 1998) (husband ordered to pay one-half of wife’s student loans, which were used to buy groceries, pay bills, and provide daycare while the wife was in school).

Perhaps Florida courts (or lawmakers) should look to how Colorado courts have allocated student loan debt.  See, e.g., In re Marriage of Speirs, 956 P.2d 622 (Colo. Ct. App. 1997).  In Speirs, the Colorado Supreme Court recognized that:

a spouse’s pursuit of higher education during marriage represents a common goal of both parties to increase their economic standing. Both marital partners may expect to share in the rewards of such education, and it is not unusual for one spouse to assist the other in the accomplishment of that goal by providing a level of financial support as well as assuming responsibility for the tasks of everyday life. It is also a common reality that student loans are obtained not only to finance tuition costs, but also to provide for the general support of the family while the spouse attends school.

See 956 P.2d at 624.  Based on the foregoing, the Speirs court held that student loans should be treated as marital liabilities, but explained that:

treating student loans contracted during marriage as marital debts in no way forecloses the trial court’s ability to award such debts to the spouse actually incurring them. Rather, removing such debts from the class of separate liabilities enhances the trial court’s ability to enter the most equitable distribution of the marital estate based upon all of the circumstances affecting the parties’ situation at the time of dissolution.

Id.  In Speirs, the trial court found that the student loans were marital.  Id. at 625.  The trial court allocated solely to the wife the portion of her student loans that were used to pay wife’s law school tuition.  Id.  And, the trial court allocated equally to both parties the portion of wife’s student loans that were used to pay marital expenses.  Id.  Both parties appealed, with the wife arguing that the entire loan obligation should have been marital and the husband arguing that none of the liability for her student loans should have been allocated to him.  Id.  The Colorado Supreme Court rejected the contentions of both parties and affirmed the trial court’s equitable distribution of the wife’s student loans.  Id.

In Florida trial courts, parties and family law attorneys must recognize that Rogers and Smith continue to govern equitable distribution of student loan debt incurred during the marriage.

In Florida, as in almost all other states, professional degrees and licenses are not assets that are subject to equitable distribution.  See, e.g., Joachim v. Joachim, 942 So. 2d 3 (Fla. 5th DCA 2006) (holding that a professional educations and licenses are not assets subject to equitable distribution). But, ironically, the debt used to acquire these non-marital assets is marital.

Rogers and Smith both reject any notion that trial courts can or should effectuate an unequal distribution of student loan debt based on the fact that one spouse will gain substantially all of the benefit of a non-marital asset, namely that spouse’s enhanced education and income potential.  This creates a somewhat unique problem because debt usually follows the asset for which it was incurred.

When distributing assets and liabilities, court are supposed to be able to consider any “factors necessary to do equity and justice between the parties.” See Fla. Stat. § 61.075(j).  Rogers and Smith thus appear to conflict with section 61.075(j), Florida Statutes.  If trial courts cannot allocate debt based on which party stands to benefit from the debt, perhaps an unequal distribution might be justified under one of the following bases:

(b) The economic circumstances of the parties.

(c) The duration of the marriage.

(e) The contribution of one spouse to the personal career or educational opportunity of the other spouse.

(g) The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.

See Fla. Stat. § 61.075.

Alternatively, parties may look to an alimony award to fight this inequity.  In some instances, courts are authorized to use lump sum alimony to “balance inequities resulting from property disposition in the final judgment.” See Banton, 756 So. 2d at 156.  For a lump sum alimony award, however, the spouse’s ability to pay cannot not be based on earnings to be accumulated in the future. Seee.g., Hughes v. Hughes, 438 So. 2d 146 (Fla. 3d DCA 1983).  One potential alternative solution for working spouse/student spouse dilemma might be to award nominal alimony until the “student” obtains his or her professional degree or license.

Regardless of how it is accomplished, our lawmakers or courts should find some solution to the problem of saddling one spouse with the other’s student loan debt, especially in connection with a short-term marriage.

If you have questions about your rights in a divorce or family law matter, please contact an experienced Tampa family law attorney.

By Richard J. Mockler


Florida Alimony Reform

In 2013, the Florida Legislature passed significant alimony reform laws. To the shock of many,  including those for and against alimony reform, Governor Rick Scott vetoed the legislation.  A letter from Governor Scott made clear that he believed the alimony reform legislation was anti-family, especially certain provisions that would allow courts to modify prior alimony awards.

With 2014 being an election year, the Governor has also made clear that he does not want to reconsider the controversial bill, which could potentially alienate roughly half of Florida voters.  But, we have not seen the last of Florida’s alimony reform movement.  Look for proponents of alimony reform to return next year, especially if Governor Scott wins re-election.

The 2013 alimony reform legislation would have changed how the courts classify short-term, moderate-term, and long-term marriages.  The current alimony statute defines a marriage of less than 7 years as short-term, a marriage of 7 to 17 years as moderate-term, and a marriage lasting 17 years or more as long-term. There is currently a presumption in favor of awarding permanent alimony after long-term marriages, and there is a presumption against permanent alimony after short-term marriages.

The 2013 alimony reform bill also would have changed the marriage classifications as follows:  (a) any marriage lasting less than 11 years would be a short-term marriage, (b) any marriage lasting between 11 and 20 years would be a moderate-term marriage, and (c) only those marriage lasting more than 21 years would be considered long-term.  Significantly, the proposed 2013 legislation would have created a presumption against awarding alimony in short-term marriages.  And, while the bill maintained a presumption in favor of alimony in long-term marriages, it would have eliminated the concept of  permanent periodic alimony.

The 2013 proposed alimony reform also placed significant limits on awards of durational alimony.   Specifically, under current law, durational alimony may be awarded for as many years as the parties were married.  The 2013 alimony reform bill would have presumptively capped durational alimony at half the duration of the marriage.  In other words, a party that was married 14 years could receive alimony for no more than 7 years.  Courts only would have had discretion to exceed this cap in cases where the need is justified by exceptional circumstances.

Under existing alimony law, there are no statutory limits on the amount of alimony that may be awarded, except that the alimony award cannot exceed 50% of the payor’s gross income and cannot result in the recipient have significantly more income than the payor.  The 2013 alimony reform would have imposed lower caps on the amount of alimony that could be awarded.  Alimony would have been capped at the following percentages: (a) 25% of the payor’s gross income for short-term marriages; (b) 35% of the payor’s gross income for moderate-term marriages; and (c) 38% of the payor’s gross income in long-term marriages.

There is no guarantee that the same framework will be included in future attempts at alimony reform.  The 2013 alimony reform bill was strongly supported in the legislature.  But, the bill was most likely vetoed due to the controversial provisions that allowed courts to modify past alimony awards.

If you have questions about alimony, cohabitation, termination of alimony, or alimony modifications, please contact an experienced Florida family law attorney.

Do Florida Courts Still Award Alimony?

Yes, the concept of alimony is alive and well in Florida’s family courts.  In fact, the most controversial part of many divorces is the issue of alimony.  Parties seeking alimony feel that they are entitled to maintain the standard of living achieved during the marriage.  Ironically, in many cases, the standard of living led to the downfall of the marriage in the first place. And, unfortunately, for most couples, it is impossible to maintain two households at the same standard previously achieved in one.  Further, many people have financed their lifestyle by accumulating debt or failing to save.  As couples age, their need for savings becomes more important.  Alimony typically destroys both parties’ ability to save for retirement.

Many clients argue that the party seeking alimony would not need it (or at least not nearly as much of it) if they would just go back to work.  And, where a non-working mother is seeking alimony, it seems that judges are quick to assume that the parties agreed for the wife to stay home with the children.  Even if the husband agreed for her to stop working, the agreement was rarely meant to be “permanent.” Some women choose – against their husband’s wishes – to stay home much longer than their partner ever anticipated.  These women feel it is “necessary” for them to stay home, even after the child has started school.

When the parties cannot agree on how much alimony is appropriate or how the requesting party should receive alimony, the court will have to award alimony pursuant to the standards set forth in section 61.08, Florida Statutes.

Types of Florida Alimony

In a divorce case, the court may grant bridge-the-gap alimony, rehabilitative alimony, durational alimony, permanent alimony, or any combination of these forms of alimony.  In any award of alimony, the court may order periodic payments or payments in lump sum or both.  See Fla. Stat. § 61.08.

Bridge-the-Gap Alimony

Bridge-the-gap alimony is an award of alimony for a set duration of time to assist the party in need with the transition from married life to single life.  This alimony is not subject to modification and may be awarded for up to 2 years.

Rehabilitative Alimony

Rehabilitative alimony is intended to assist a party in achieving the means necessary to support herself after the marriage.  The party seeking rehabilitative alimony must propose a “plan” to the court outlining what she intends to do to increase her earning capability, how the training will help her financially, how long the training will take, and how much the training will cost.  Rehabilitative alimony may be modified or terminated if the wife does not attend the courses as proposed in the rehabilitative plan.

Durational Alimony

Durational alimony was created by the Florida legislature in 2010.  The purpose of durational alimony is to provide periodic support to a spouse for a number of years, not to exceed the duration of the marriage, which is measure from the date or marriage to the date of filing for divorce.  The amount of alimony awarded each month is subject to modification if one of the parties experiences a substantial change of circumstances, including an unanticipated change in need or ability to pay, death of either party, or remarriage of the payee. The duration of the alimony award is not subject to modification, except in exceptional circumstances.

Permanent Periodic Alimony

Permanent period alimony is an award of alimony, typically on a monthly basis, that continues indefinitely. Permanent alimony terminates on the death of either party or upon the remarriage of the recipient. Permanent alimony is also subject to modification if the recipient spouse is in a supportive relationship.  Some parties may be eligible to terminate their alimony obligation upon retirement if there are not sufficient income-producing assets for the retiree to continue paying the alimony.

Lump Sum Alimony

Lump sum alimony is awarded where it is appropriate for the court to award a fixed sum of alimony to one spouse.  This may be appropriate where one party divests himself of the ability to earn income and pay alimony.  It may also be appropriate where one party is ordered to pay off certain marital debts.  Lump sum alimony may be payed in installments but it may not be terminated, even upon death or remarriage.

Florida Alimony Factors

In determining whether to award alimony, section 61.08, Florida Statutes, requires that the court must first make a specific factual determination as to whether either party has an actual need for alimony and whether the other party has the ability to pay alimony.

If the court finds that one party has a need for alimony and that the other party has the ability to pay alimony, then in determining the proper type and amount of alimony, the court must consider all relevant factors, including but not limited to the following:

  1. The standard of living established during the marriage.
  2. The duration of the marriage.
  3. The age and the physical and emotional condition of each party.
  4. The financial resources of each party, including the non-marital and the marital assets and liabilities distributed to each.
  5. The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate employment.
  6. The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child care, education, and career building of the other party.
  7. The responsibilities each party will have with regard to any minor children they have in common.
  8. The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a nontaxable, nondeductible payment.
  9. All sources of income available to either party, including income available to either party through investments of any asset held by that party.
  10. Any other factor necessary to do equity and justice between the parties.

 Courts are anything but uniform in their application of these factors.  Results vary widely from judge to judge, and from case to case.  Many times, two husbands with very similar incomes and circumstances can be saddled with very disparate alimony obligations.  This is true even after taking into account their former spouse’s income and education level.  The fact of the matter is that courts have great discretion when establishing an alimony award.  And, individual judges are inevitably guided by their own life experience and world views.

If you have questions about alimony, cohabitation, termination of alimony, or alimony modifications, please contact an experienced Florida family law attorney.