How does a judge’s income affect your client’s settlement?
Talk about an unwritten rule. I’ve had more than one attorney tell me that spousal maintenance awards in Arizona effectively top out at about $120k a year, or $10k a month. Regardless of the woman’s financial status, pre-divorce.
Where on earth did that number come from?
As a CPA, a CERTIFIED FINANCIAL PLANNER® professional, and a Certified Divorce Financial Analyst® professional, I’ve worked on a lot of divorce cases, and I can attest that the ceiling exists. And in case you didn’t already know this lore—or hadn’t deduced it from the title of this article—then know that it’s based on what judges earn in Arizona.
Broadly, a judge in Arizona makes about $120k a year. And he (they’re more male than female, based on my quick Googling) is able to live off of that just fine.
And therein lies the bias. The preconceived notion of what that divorcing woman—your client—can live off of. Anything above that seems extravagant.
But as you know, it might not be. You want to help your affluent clients. You want them to surmount that wall of bias against them.
This is one argument, among many, which you already know, to choose mediation over a trial whenever possible. But hold that thought: I’ll circle back to it in a minute.
Two observations:
- I’ve actually worked with an affluent client whose attorney told her that the expenses on her AFI couldn’t exceed her projected income! In a word: What the heck? It’s a mental block that’s similar to what the judges possess.
- I believe—this is just my opinion—that judges are so used to seeing horribly-completed AFIs, that they don’t give any AFIs much credibility in the first place.
Both of these observations support why you, and your client, need a financial pro like me on your side.
I can help you get past these biases, with actual hard numbers that support the argument. When I do a lifestyle analysis for spousal-support lifestyle exemption cases like these, I don’t just “write in numbers.” I footnote each one, showing exactly where it came from and how it was calculated. Such as “Based on an analysis of the last 36 months of bank, securities, and credit-card statements.”
I’ll also scrutinize the income information supplied by the husband, since receivables like distributions and business profits are more fungible. It’s unfortunately common for a self-employed husband to not take a distribution to make it look like his income is less. But when that happens pre-divorce, and the business’ bank account goes up, it reveals the scheme. Most divorcing women can’t spot red flags like these (could you?), but I can, quickly.
Last point. Remember my comment about mediators? As you undoubtedly know, tons of mediators are—shocker!—former judges. You think they left their professional biases behind when they changed hats? Nope. They need the same hard-numbers convincing as their robed brethren.
Bottom line: For any client of yours who’s lived a lifestyle above and beyond what a judge earns in Arizona, contact me. You’d both be leaving way too much on the table if you don’t.
