Theory Supporting the Kaufman Alimony Guidelines
This is a summary of the theory that supports the Kaufman Alimony Guidelines based on the writings of the developer, Craig Ross. It is not intended to provide a full explanation of the theory but it does provide the basics. For a comprehensive explanation of the theory behind the Kaufman Alimony Guidelines and Mr. Ross’ complete writings, see the MarginSoft website at www.marginsoft.net.
The Kaufman Alimony Guidelines were developed by Craig Ross, an attorney and hearing officer in Ann Arbor, Michigan. In 1977, he was approached by a Michigan judge who asked him to draft child support guidelines for his circuit--before such guidelines were a matter of state law. Mr. Ross was asked to develop similar guidelines for alimony. His first theory and algorithm for alimony guidelines were completed in late 1978. The original idea was structured for a hand calculator. With the subsequent availability of computer technology, Mr. Ross was able to create more comprehensive and reliable formulas. He formed Marginsoft to develop and distribute the software in other states.
Marginsoft’s algorithm that generates the alimony recommendations has undergone hundreds of revisions, corrections and updates since 1978. Adjustments have been made to achieve equitable and consistent results and to accommodate various scenarios, such as significant income disparities. The modifications were based on outcomes in actual cases, consideration of case law and feedback from professionals. This is a continuing process but the changes in recent years have been more nuanced and less significant since it has been refined through experience. To date, the guidelines have been tailored for use in Michigan, Kentucky, Florida, Washington and now Maryland, incorporating local taxes and child support guidelines.
The Kaufman Alimony Guidelines rank alimony cases along a continuum of strength of the case from the case that is least justifiable for alimony to the case that is most justifiable. The continuum is linear.
The factors that rank the alimony cases along the line are value judgments that are commonly held and reflect the law, for instance the length of marriage is an extremely important consideration in the valuation of any claim. The two primary elements are:
Need – the claimant’s present or potential ability to support herself/himself.
Disutility of the marriage – the degree to which the marriage affected the claimant’s ability to support herself/himself.
The Guidelines measure the need and the disutility of the marriage by considering 7 objective factors. Some of the factors may trigger sub-formulas that adjust the outcomes, such as income differential and gross income levels of the parties. The factors are:
length of marriage
actual or potential income of claimant
education of claimant
age of claimant
number of children born to the couple
other party’s income
if children are grown, the role of the claimant as a child caretaker
The Kaufman Alimony Guidelines imposes some weighting of factors and the case score is a combination of weighted sub-scores. Without adjustments, the weighting is:
- duration 30% of the score
- income 35% of the score
- education 15% of the score
- age 10% of the score
- children 10% of the score
Based on consideration and weighting of all the factors, the cases are given a score for 0-100. Depending on where they fall along the continuum, cases are assigned recommendations regarding how justifiable an alimony award is, the amount of alimony and the duration. The assumption is that the strength of the claim should impact the amount and the duration of the alimony.
The program assumes the parties will share incomes, with the sharing becoming less pronounced as the justification for alimony becomes more marginal. Cases on the high end of the continuum have an income differential of $30,000 or more. The deviations are made along a straight line and adjustments are made for FICA taxes.
The formula within the Guidelines program makes adjustments for factors such as income differential and children.
An adjustment is made for income differential by scoring the income component of the line “higher” as the parties’ incomes diverge. This is because the income differential between the parties is relevant to the historical standard of living in the family and influences the “need.” The formula is:
Alimony = (score divided by 100) times half the difference between the parties’ income, where gross income has been adjusted for FICA/SE
The software also recognizes the fact that age and length of marriage are often related but the variables are weighted to minimize any direct correlation since some people marry later in life. However, the age of the claimant does impact success in the labor market, particularly when the claimant has been out of the workforce or has marginal skills. Circumstances that contributed to the estrangement of the parties are not quantifiable and are not considered by the software.
The Kaufman Alimony Guidelines formula makes adjustments for the parties’ direct responsibilities for children. It attempts to balance the standards of living and the financial impact of the household size for each party after separation. Utilizing published data from the Bureau of Labor Statistics and Department of Agriculture and considering the projected economies of scale for a multi-member household, the formula is adjusted to create equilibrium between the households. The equation also adds child support, adjusts child support for the parties’ tax realities and considers day care and other expenses. In addition, there are sliding percentages for joint and split custody cases depending on how much time the child spends in each household.
The algorithm that generates the recommendation for the duration of the award is based on the strength of the case, the length of the marriage and whether the couple had children. It utilizes a percentage of the duration of the marriage but this percentage slides based on other considerations such as the strength of the overall case.