COLUMBIA, SC — Trying to predict how the swings of the financial market will affect an investor’s portfolio is an impossible task, and one that family court judges need not dabble in when deciding whether to award alimony, the South Carolina Supreme Court has ruled.
The justices reiterated that family courts must consider the investment income of both parties when making such awards, but declined to require them to assign a specific number to future investment income given the “uncertainty of market fluctuations.”
Mark Sweeney sought a divorce from his wife, Irene, in Greenville County Family Court in 2012. Irene counterclaimed and sought alimony.
At trial, Mark’s expert testified that Irene didn’t need alimony because she could draw enough income from her investment account to cover her living expenses. The expert made his calculations using the account’s five-year historical rate of return as a predictor of future returns.
Irene’s expert said that using a hypothetical return rate to offset alimony would be a mistake because of the uncertainty in returns. Greenville County Family Court Judge David Phillips granted the divorce and ordered a 55/45 split of the total assets in favor of Mark, leaving Irene with about $1.2 million in liquid assets. Phillips also awarded Irene a monthly alimony payment worth $5,000.
Both parties moved to reconsider, with Mark arguing that Phillips should have specified how much income Irene could expect from the investment account and factored that into the alimony award. After the state’s Court of Appeals affirmed the decision, Mark again appealed.
Justice Kaye Hearn, writing for a unanimous Supreme Court in a March 20 opinion, said that Phillips was correct in considering the “substantial income” that Irene would receive from the investment, but that it was impossible to arrive at a specific number that could be subtracted from the alimony award, as Mark had requested.