Since 2022, many legislative changes have impacted Maryland family law with much of the focus being on no-fault grounds for divorce, residency requirements, and changes to the child support guidelines. However, the legislature, for the first time, defined “voluntary impoverishment,” and that was a big deal. As we approach the third anniversary of a somewhat unheralded change, how has this impacted family law in Maryland?
First – What is “voluntary impoverishment?”
Voluntary impoverishment is the concept whereby a payor of support deliberately reduces their income to avoid or minimize their support obligation. This can manifest in a number of different ways, including quitting a job, reducing work hours or underreporting income – it can even include retirement in some cases. Until 2022, the Maryland Courts always viewed such tactics critically as voluntary impoverishment. In 1992, the Court in John O. v. Jane O., 90 Md. App. 406 (1992) defined voluntary impoverishment as the act “…to reduce oneself to poverty or deprive oneself of resources with the intention of avoiding child support or spousal obligations.” Id at 421. Just a year later, the Court seized on an opportunity to clarify its John O. v. Jane O. opinion and clarified that while a support obligor’s intent behind voluntary impoverishment may be relevant context, ultimately, the contextual reason for the impoverishment “…doesn’t affect that parent’s obligation to the child.” Goldberger v. Goldberger, 96 Md. App. 313 (1993).
With a clearer understanding of voluntary impoverishment, Maryland Courts evaluated voluntary impoverishment by assessing whether a parent’s unemployment or underemployment was ‘voluntary’ and ‘without justification’ whilst considering a number of factors, including job history, job qualifications, efforts to seek employment, the market, health circumstance, or other employment-limiting factors. Due to the somewhat broad standards and inherent discretion, decisions proved inconsistent over the years.
Post-2022
The Legislature added two relevant definitions to Section 12-201 of the Family Law Article, first, “voluntary impoverishment,” which now means “that a parent has made the free and conscious choice, not compelled by factors beyond the parent’s control, to render the parent without adequate resources.” Second, the legislature defined “potential income” to mean “income attributed to a parent determined by:
- the parent’s employment potential and probable earnings level based on, but not limited to:
- the parent’s:
- age;
- physical and behavioral condition;
- educational attainment;
- special training or skills;
- literacy;
- residence;
- occupational qualifications and job skills;
- employment and earnings history;
- record of efforts to obtain and retain employment; and
- criminal record and other employment barriers and
- the parent’s:
- employment opportunities in the community where the parent lives, including:
- the status of the job market;
- prevailing earnings levels; and
- the availability of employers willing to hire the parent;
- the parent’s assets;
- the parent’s actual income from all sources; and
- any other factor bearing on the parent’s ability to obtain funds for child support.
The legislature also revised Section 12-204 of the Family Law Article which now states that “[i]f there is a dispute as to whether a parent is voluntarily impoverished, the court shall: (i) make a finding as to whether, based on the totality of the circumstances, the parent is voluntarily impoverished; and (ii) if the court finds that a parent is voluntarily impoverished, consider the factors specified in Section 12-201(m) of this subtitle in determining the amount of potential income that should be imputed to the parent.”
So What Do These Changes Mean?
The intent was to ensure that the variability and discretion that was apparent in pre-2022 cases was sidelined in favor of consistency. From a practical perspective, many of the pre-2022 recommendations remain if you are a payor of support facing an allegation of “voluntary impoverishment.” But now, all litigants will benefit from the same parameters relative to the question of voluntary impoverishment.
Recommendations
Clearly defining how a court will consider if a support payor has voluntarily impoverished themselves unquestionably offers the accused an understanding of how to counter-act the averment on a factor-by-factor basis. When preparing, you should do the following:
- Gather your documents. Whether you lost your job or were demoted and now you are being accused of voluntarily impoverishing, always maintain clear records. This includes job searches, applications, interviews, etc. If you have had a medical condition that inhibited your working opportunities, gather and maintain as much documentation on your condition as you can.
- Consult with a professional. Anytime an allegation such as “voluntary impoverishment” is raised, your case is that much more complicated. Retaining an experienced family law attorney can help you prepare an appropriate strategy to counter-act the allegations.
- Hire an expert. You and your family law attorney can determine an appropriate vocational expert who can help you respond to the allegations of voluntary impoverishment.
Conclusion
The changes brought to Maryland family law by the legislature of 2022 are significant and defining voluntary impoverishment has often flown under the radar. But such a clarification is a benefit to litigants in Maryland as variability is limited. If you are facing allegations of voluntary impoverishment or if you believe you are involved with someone who you believe is voluntarily impoverishing themselves, call me to discuss your circumstances.
