Marriage of Stonecypher

Filed 8/14/06 Marriage of Stonecypher CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEALS from an order and judgment of the Superior Court of San Diego County, David B. Oberholtzer, Judge. Affirmed.

David Stonecypher (David) appeals from an order modifying the spousal support awarded to his first former wife, Anita Stonecypher (Anita), and from a judgment awarding spousal support to his second former wife, Audrey Stonecypher (Audrey). David challenges: (1) the methodology used by the trial court to calculate the spousal support; (2) the failure to terminate spousal support for Anita and the specific amounts awarded to Anita and Audrey; and (3) the requirement that he name Anita and Audrey as beneficiaries of his Individual Retirement Account (IRA) for a 10-year period. Anita cross-appeals, contending the trial court erred in reducing her spousal support without a previous Gavron^[1] warning that she must become self-sufficient. We affirm the court's order and judgment.

FACTUAL AND PROCEDURAL BACKGROUND

David, a retired ophthalmologist, was married to Anita for 23 years (from June 1955 to September 1978), and to Audrey for 25 years (from October 1978 to January 2004). David has been paying spousal support to Anita since their separation in 1974. The case before us is a consolidated matter, addressing the issue of spousal support for both former spouses, based on the David/Audrey dissolution and David's motion for modification of Anita's spousal support.

At the time of the current spousal support proceedings in 2004, David was 77 years old, Anita was 74, and Audrey was 73. The parties were all of retirement age and not expected to work.

David's assets as of May 2004 included an IRA worth $820,000 and a condominium with an equity value of about $200,000. He received $1,136 monthly Social Security income. He claimed monthly expenses of $5,135.

In addition to $1,950 monthly spousal support, Anita received $573 monthly Social Security income. She owned a home with an equity value of about $435,000 to $480,000, which home was in need of repair. She had monetary assets totaling $165,501 and debts totaling $55,899. She claimed monthly expenses of $4,571.

Audrey received $543 monthly Social Security income. She had approximately $304,194 in monetary assets. She claimed monthly expenses of $4,001.

David was originally awarded his IRA as part of the distribution of community assets in the dissolution of his marriage to Anita. During the dissolution of his marriage to Audrey, the IRA was deemed his separate property. As of December 31, 2003, David's IRA balance was $1,021,551.

For purposes of the current spousal support proceedings, all parties retained experts to recommend the income available for support from David's IRA. The experts generally agreed about the manner and amounts in which the IRA was disbursed to David, but presented differing views about how to compute the IRA income for spousal support purposes. David's expert maintained the principal of the IRA should be used only to the extent required by the IRS, an approach which would allow the IRA to remain funded for over 30 years. In contrast, Audrey's expert (with the concurrence of Anita's expert) proposed an approach which would result in the principal being depleted in about 20 years.

The parties' experts explained that when IRA holders reach the age of 70½ years, the Internal Revenue Service (IRS) requires that they withdraw a minimum annual distribution from the IRA (known as the Required Minimum Distribution, or RMD). There is no maximum on the amount that may be withdrawn. Withdrawals are treated as taxable income.

David's expert (Karen Kaseno) explained that the RMD is calculated by taking the IRA balance as of December 31 of the preceding year and dividing it by the applicable distribution period. For David, the distribution period is calculated based on his age during the current year and a "uniform lifetime table" (applicable to unmarried IRA account owners) provided by the IRS. Kaseno stated that for the year 2003, the distribution period for David was 20.3 years. Based on the $1,021,550.77 balance on December 31, 2003, David's RMD for 2004 was $50,322.70 ($1,021,550.77 divided by 20.3 years). Part of the RMD represents earnings, and the balance "represents a gradual depletion of [the] asset base in [the] account over time." From 1998 to 2004, David withdrew an annual average of $50,538 from his IRA, which was about equal to the RMD.

David has historically earned about 4.54 to 6.47 percent on his IRA.^[2] Based on a 4.54 to 6.47 percent annual rate of return, Kaseno estimated that David's RMD for 2005 through 2010 will be about $48,300 to $57,600 per year, or $4,025 to $4,800 per month. For purposes of calculating spousal support, Kaseno opined that David should not be required to withdraw more than the RMD from his IRA, reasoning that otherwise he would be "depleting his IRA asset base much more quickly than required by the IRS . . . ." A table prepared by Kaseno showed that if David earned a 4.538 percent rate of return on his IRA and withdrew only the RMD, his IRA would not be depleted until he was well over 100 years old.

Disagreeing with Kaseno, the financial analysts retained by Anita and Audrey opined that it was reasonable to calculate the IRA income available for spousal support in excess of the RMD. Anita's expert, Ginita Wall, opined that spousal support could properly be calculated by considering the income David could obtain by purchasing an annuity with the IRA monies. She explained that an annuity provides a guaranteed lifetime payment from an insurance company, allowing a retiree to receive a monthly payment until death, no matter how long he or she lives. Based on a quote from First Colony Life Insurance Company, Wall stated that if David purchased an annuity for $950,000, he would receive monthly payments of $7,695 to $9,284.^[3]

Alternatively, Mark Hill, retained by Audrey, opined that David's income from the IRA could properly be calculated based on a 20-year amortization schedule. According to Hill, based on an average annual rate of return of 5.388 to 6.47 percent, David could withdraw $6,225 to $7,598 per month for 20 years (until age 97) before depleting the account. Wall and Hill agreed that their two alternative methods of calculating income from the IRA were equally reasonable.

Trial Court's Rulings

The court found that the dissolution of the David/Audrey marriage, which required the support of an additional household, constituted a changed circumstance warranting modification of Anita's spousal support. The court concluded both former spouses should receive support from David. The court found the parties had similar needs; they had an upper middle class standard of living; they were all in retirement status; and neither Audrey nor Anita had priority over the other for spousal support. The court considered the individual assets and debts of each party in calculating the amount of spousal support, including their Social Security income. Given the parties' ages and the fact that there was insufficient income to support them at the marital standard of living, the court stated it expected each of them to fully use their respective assets, including invasion of principal, to support themselves.

In determining the amount of spousal support due from David, the court concluded that it was not required to restrict its calculation of income from David's IRA based on the minimum withdrawal requirements nor based on the annual interest earnings on the IRA. The court noted that an IRA is intended to cover all of a retiree's expenses including spousal support obligations, and thus it is expected that the retiree will draw on the principal of the IRA. The court observed that under normal circumstances retirees might calculate their IRA withdrawals with the goal of leaving funds at their death for their heirs. However, the court viewed the circumstances of this case as unusual because there were two long-term marriages, the parties were all of retirement age, and there were two ex-spouses in need of support.

The court concluded that David's obligation to his former spouses took precedence over the interests of his heirs, and thus it was not appropriate to calculate his IRA income in a manner that left money for his heirs at the expense of his current spousal support obligations. The court concluded David should use the principal on his IRA as well as the interest earnings for spousal support. The court also considered that if David used his IRA to purchase an annuity, he could receive guaranteed monthly income for his lifetime ($7,695 to $9,284 per month).

The court ordered that Anita's monthly spousal support be reduced from $1,950 to $1,100 and that Audrey receive $2,500 monthly support, with the former wives paying the income taxes on their support. The court found that the assets owned by the parties were approximately $1 million for David (including his residence and his IRA); $550,000 for Anita; and $300,000 for Audrey. In making its spousal support calculations, the court assumed the parties would be able to make a 3 percent rate of return on their assets. The court explained that its calculations based on a 3 percent rate of return "departed from the annuity model somewhat," but that the court's final figures were "almost exactly the same" as the annuity figures.

To illustrate its methodology, the court stated that a 3 percent rate of return on David's $1 million would yield about $2,500 per month, and when added to his $1,136 monthly Social Security income, gave him a total monthly income of $3,636. His total spousal support obligation was $3,600; thus, David was expected to invade his principal to pay his support obligation and to support himself. The court noted that if David's IRA did not earn the expected returns, he could request modification of the spousal support order.

The court also ordered David to name both Audrey and Anita as 25 percent beneficiaries of his IRA (total 50 percent) for a 10-year period to provide them security for spousal support in the event he died during the next 10 years.

DISCUSSION

I. David's Appeal

A. Methodology Used to Calculate Spousal Support

David challenges the methodology underlying the spousal support award, arguing (1) the trial court used an arbitrary, speculative life expectancy table to make its spousal support calculations, and (2) the trial court erred in requiring him to exhaust the principal of his assets in order to pay spousal support.

1. Life Expectancy Tables

In its written ruling, the trial court stated: "It is anticipated that David will draw down on the principal of his IRA and, in making the award calculations, the Court has taken into account median life expectancies." In its oral findings, the trial court observed that the median life expectancy of a 77-year-old White male was 9.5 years, and the median life expectancy of a 73-year-old White female was 14.1 year. The court explained that it knew that "median" meant half the people would live less and half would live longer than the expectancy, and it was not assuming the parties would die within the expectancy timeframe but was just considering the expectancies as a statistical tool. To support his argument that the court engaged in improper speculation by relying on expectancy tables, David points to a letter he submitted from a medical doctor opining that based on David's family history and lifestyle it would not be unreasonable to expect him to live until he was 100 years old.

Although the record shows the trial court considered life expectancy tables when making its determinations, the actual numerical amount of the awards are not calculated based on an assumption that David will die by the 9.5 year expectancy date. David's expert calculated that under the IRS regulations he will be required to withdraw a minimum of about $4,025 to $4,800 per month from his IRA from 2005 through 2010. Using the more conservative $4,025 figure, after paying his $3,600 monthly spousal support obligation, he will have $425 per month remaining from his mandatory IRA withdrawal, plus $1,136 monthly Social Security income. Thus, he will have $1,561 income after paying spousal support ($1,136 plus $425). To meet his claimed $5,135 monthly expenses, he will need to use $3,574 of the principal from his IRA each month ($5,135 minus $1,561). His total monthly draw from his IRA will be about $7,600 ($4,025 RMD plus $3,575 extra to meet his own expenses).

According to Audrey's expert, if David withdrew about $6,225 to $7,598 per month from his IRA, the IRA would be depleted in approximately 20 years when he was 97 years old. Assuming the rates of return are within the ranges calculated by the experts, if David withdraws about $7,600 from his IRA he will have funds well beyond the 9.7 years set forth in the life expectancy table. Thus, the record reflects that although the court generally considered the parties' respective life expectancies in making its spousal support determinations, it did not calculate figures that would deplete David's IRA within the life expectancy timeframe. David has not shown error arising from the court's reference to the life expectancy table.

2. Exhaustion of Principal

David cites In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373 (Reynolds) to support his argument that a spousal support award cannot be calculated to exhaust investment principal. In Reynolds, the appellate court held that the trial court erred in calculating spousal support based on a retired, 69-year-old husband's ability to earn rather than his actual retirement income. (Id. at pp. 1377-1379.) Relevant to our analysis here, the Reynolds court also observed that the spousal support order exceeded the husband's retirement investment income and would require him to invade his investment principal, and held this invasion was improper. (Id. at pp. 1379-1380.)

In reaching the conclusion that investment principal should not be invaded, the Reynolds court cited In re Marriage of Olson (1993) 14 Cal.App.4th 1 (Olson), which provides the following guidance on the issue of calculating spousal support from retirement investment income:

"We conclude that trial courts possess broad discretion when setting or modifying permanent spousal support about whether to consider as income contributions to individual retirement plans by a participant and accruals therein not withdrawn. The Legislature has wisely left this within the court's discretion. It is easy to foresee circumstances where contributions and accruals are best not considered as income available to pay permanent spousal support. In other cases, it may be appropriate to consider all or part of either or both as being available for permanent spousal support. The trial court is in the best position to determine under the facts and circumstances of each case how its discretion should be exercised, given the dual, but possibly conflicting, public policies of awarding spousal support where appropriate and of encouraging citizens to save for their retirement.

"[W]ithdrawals made prior to the time the participant reaches age 59½, in most cases, are not only taxed as ordinary income, but are subject to a 10 percent penalty because of withdrawal prior to normal retirement age. For this reason, it would appear to be an abuse of discretion to order an amount of spousal support based on funds in a retirement plan which if withdrawn, would be subject to this penalty. . . . Additionally, during the timeframe within which a participant has the option to withdraw funds from the retirement plan without penalty, that is between ages 59½ and 70½, but is choosing not to do so, the court should have discretion as to whether or not to impute reasonable withdrawals as additional income for purposes of fixing spousal support, but should do so weighing the public policy favoring provision for one's retirement by allowing funds in the plan to accrue tax free, against all other circumstances in the case. . . .

"Additionally, once the participant reaches age 70½, the court possesses discretion to consider as income available for spousal support an amount greater than the statutorily mandated minimum withdrawals. However, the court must be cautious in doing so, recognizing that the statutory scheme is intended to provide retirement income for the life expectancy of the participant and, perhaps, an alternate payee. The trial court is obviously in the best position to make these decisions and appellate courts should be reluctant to interfere with its decisions.

"Thus, we hold that the trial court possesses broad discretion to determine whether to consider as income available for spousal support contributions made by a participant to his or her retirement plan, as well as accruals or accrued earnings of that plan which are not withdrawn. No bright line can be drawn, although it would take extreme circumstances to justify ordering a payor of spousal support to withdraw funds from his or her retirement plan prior to age 59½ and incur not only the income tax liability thereon, but also the additional 10 percent penalty."

(Id. at pp. 12-13, fns. omitted, italics added.)

Thus, Olson recognizes there may be circumstances when it is appropriate to compute spousal support based on accrued retirement assets that are not currently being withdrawn by the supporting spouse, and that this decision is a matter peculiarly within a trial court's exercise of its sound discretion under all the circumstances. When read in light of Olson, we do not view Reynolds as establishing a rigid rule precluding use of investment principal in all situations.

Turning to the particular circumstances of this case, David asserts the court's order was improper because if he "outlive[s] the median life expectancy he will have nowhere to live and nothing to pay his reasonable living expenses." This argument misconstrues the record. As noted, based on expert information provided at the hearing, the amounts awarded by the trial court are not designed to deplete David's IRA within 9.5 years, but rather to deplete it over a 20-year period. Assuming David uses his IRA to meet his support obligations, the court's award does not require him to access the equity in his home for some 20 years. Further, if there is a sharp decline in the value of David's IRA due to market changes, David may move for modification of the awards.

A trial court possesses broad discretion on the issue of spousal support based on a weighing of all the relevant circumstances and with the goal of accomplishing substantial justice for the parties. (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 479-481.) Here, the court was presented with three persons of retirement age who had been in marriages of long duration. Neither Anita nor Audrey were of an age that they could now be instructed to become self-supporting through employment. Because he had reached age 70½, David's IRA was fully available to him without penalty. Particularly given the age of the parties, the trial court reasonably concluded that David's spousal support obligations were superior to any desire he may have to preserve his IRA funds as an inheritance for his heirs. The court was careful not to render an order that would deplete David's IRA in an unduly short timeframe, but rather fashioned an order that allowed for depletion over a 20-year period as the funds were used to assist in the support of all three parties. David has not shown that the trial court's award constituted an unreasonable invasion or exhaustion of his principal.

B. Specific Awards to Anita and Audrey

1. Anita

David argues that given the 30-year period that he has been paying support to Anita and Anita's failure to become self-supporting, the trial court should have granted his request to terminate Anita's spousal support. He asserts "no reasonable court would have ordered [him] to continue making payments in any amount to Anita at a cost of leaving him destitute should he outlive his median life expectancy." As discussed, the court's order is not designed to deplete David's IRA within his median life expectancy, but allows for use of the IRA funds until he is about 97 years old, at which time David still has the option of using his home equity (or moving for modification) should he, Anita, and/or Audrey still be living. Thus, the court did not render an order that will leave David destitute even if lives to be 100.

Further, the record shows that Anita was awarded spousal support prior to California's explicit adoption of a policy generally requiring spouses to make reasonable efforts to become self-supporting. David began paying voluntary spousal support to Anita when they separated in 1974, and in 1978 Anita received her permanent spousal support award. The Gavron case, which requires advance notice before imposing self-sufficiency on a supported spouse, was decided in 1988. (Gavron, supra, 203 Cal.App.3d at p. 712; see Fam. Code,^[4] § 4330, subd. (b)^[5].) The statute establishing California's self-support policy (current § 4320, subd. (l)) was enacted in 1996.^[6] (Historical and Statutory Notes, 29F West's Ann. Fam. Code (2004 ed.) foll. § 4320, p. 223.) In 1984 and 1987 David unsuccessfully moved for modification of Anita's spousal support; both of these motions were filed before the existence of Gavron and section 4320, subdivision (l). Although declining to reduce Anita's award, in its 1987 ruling the trial court ordered that Anita should submit to a vocational examination at David's expense if David so requested. David never requested the vocational examination. Although Anita may have surmised from the court's ordering of a vocational examination that she was expected to seek employment, the issue was never fully developed because David elected not to pursue this option.^[7]

An appellate court will not disturb a trial court's spousal support ruling unless no reasonable judge could make the order. (In re Marriage of Smith, supra, 225 Cal.App.3d at p. 480.) By the time the current spousal support proceedings came before the trial court, Anita was 74 years old. Under the circumstances of this case, involving a lengthy marriage, a long history of Anita's reliance on support during a time when self-support had not been established as a firm state policy, David's failure to pursue the issue of her self-sufficiency through a vocational examination, and Anita's advanced age at the time of the current proceedings, the trial court did not act unreasonably in declining David's request to terminate support.^[8]

David also argues that spousal support to Anita should not have been calculated based on his IRA because he received the IRA as part of the division of community assets in the dissolution of his marriage to Anita in exchange for Anita's receipt of the community residence and other community property. This precise argument was rejected in In re Marriage of White (1987) 192 Cal.App.3d 1022 (White). The White court held that a pension awarded to one spouse in the division of community property should be considered as an asset available for spousal support to the other spouse. (Id. at pp. 1026-1027.) The court explained that consideration of the pension for purposes of spousal support may constitute "double-dipping" in cases where jurisdiction was reserved over a pension for division "in kind" as payment became due. (Id. at p. 1027.) In contrast, when the pension is awarded to one spouse as part of the division of community assets, it is proper to consider the pension when evaluating each party's total financial picture for purposes of determining a discretionary award of spousal support. (Id. at pp. 1026-1029.) That is, the pension awarded to one spouse has become part of the separate property of that spouse available for spousal support, even though the pension was formerly community property. (Id. at p. 1028.) We agree with the analysis in White, and accordingly reject David's challenge to the court's award of support to Anita on this basis.

Finally, David argues that when evaluating Anita's assets for purposes of calculating her spousal support award, the trial court only considered the investment return on her $550,000 assets, and failed to consider the other monthly income reflected in her income and expense declaration. The record does not support this contention. Anita's income and expense declaration shows she received $573 monthly Social Security income and $58 monthly dividend/interest income. In its oral findings, the trial court expressly stated it included all parties' Social Security income in its calculations. Further, the dividend/interest income set forth in Anita's income and expense declaration was subsumed in the trial court's consideration of the return on her investment assets.

2. Audrey

David argues the trial court failed to consider the monthly income Audrey reported on her income and expense declaration and her IRA accounts, but only considered the rate of return on her $300,000 assets. Again, this assertion is contradicted by the record. Audrey's income and expense declaration shows $543 monthly Social Security income, $737 average monthly dividend/interest income, and a total of $304,194 in account deposits, investments, and IRA assets. As noted, the trial court considered the parties' Social Security income. Further, the court's consideration of a return on Audrey's $300,000 assets subsumed her declared monthly investment income and her IRA's.

C. Security for Spousal Support

David challenges the trial court's order that Audrey and Anita be designated as beneficiaries of his IRA for a 10-year period.

Audrey and Anita asked the court to provide security for the spousal support in the event of David's death. Audrey noted the court could order David to purchase a life insurance policy with the supported spouses as beneficiaries, but suggested that in this case the cost of such a policy to David could be avoided by making Audrey and Anita beneficiaries of the IRA. Thus, the cost of the security would be borne by David's heirs (who would receive less of the IRA) rather than by David during his lifetime.

The trial court stated it was concerned that Audrey and Anita would be left without support if David died within a few years, and agreed that it would be less expensive for David to provide security via his IRA than to purchase a life insurance policy. Accordingly, the court ordered that to provide security for spousal support, David should name both Anita and Audrey as 25 percent beneficiaries of his IRA (total 50 percent) for 10 years, and after 10 years they could be deleted as beneficiaries. The court explained that it viewed 10 years as a reasonable amount of time to provide security, and that Audrey and Anita should make arrangements to support themselves in the event of David's death after this time period. The court reserved jurisdiction over the security issue, and noted that if there was a future request for modification of spousal support, the security could be modified as well.

Section 4360 authorizes a trial court to order the supporting spouse to purchase an annuity for the supported spouse or to name the supported spouse as a beneficiary of a life insurance policy. This section reflects a legislative recognition that although the spousal support obligation typically ends at the death of the supporting spouse (§ 4337), in some circumstances it is appropriate to protect the supported spouse in the event of the supporting spouse's death. Here, the security provision was appropriate given David's age and the fact that Anita and Audrey are no longer of an age that they can readily enter the job market to become self-supporting. Indeed, David does not dispute the trial court's right to provide for security to his former wives in the event of his death, nor does he assert that the trial court erred by devising a security mechanism not expressly authorized by statute to avoid requiring him to purchase an expensive life insurance policy.

Instead, David argues that the court was required to specify the exact dollar amount to be secured, and that the amount should be reduced as each support payment is made. David derives his argument from a suggestion made by Audrey's counsel at the spousal support hearing. Audrey's counsel suggested that the trial court set a fixed amount of spousal support owed based on the women's life expectancies, and then order that in the event of David's death the women receive from the IRA the balance of the monies that had not yet been paid to them. David posits that without a fixed amount, his former wives may receive a windfall if he dies within a few months or if his IRA does particularly well in the market.

We are satisfied that the trial court's decision to award a 25 percent interest was reasonable and that it was not required to adopt the approach now urged by David on appeal. Given the nature of spousal support, which normally terminates upon the death of either party, it is not possible to calculate in advance how much support the supporting spouse "owes" the supported spouse. Thus, none of the approaches to providing security discussed above, including the purchase of life insurance as authorized in section 4360, can create a true correlation between the amount of spousal support "owed" and the amount that will be received by collecting on a security after the supporting spouse's death.

Under the terms of the court's security ruling, if David should die before the expiration of the 10-year period, his heirs will still receive one-half of the value of the IRA, and Anita and Audrey will be assured support from the other one-half of the value of the IRA. David has presented no persuasive argument defeating the reasonableness of the court's decision to adopt a security formula premised on a percentage of the IRA.

II. Anita's Cross-Appeal

In her cross-appeal, Anita asserts the trial court erred in reducing her monthly spousal support from $1,950 to $1,100 without a previous Gavron warning.

David commenced paying support to Anita when they were separated in 1974, and in 1978 Anita was awarded permanent monthly spousal support of $1,950. In 1984 and 1987 David unsuccessfully moved for reduction of support, and in 1987 he failed to pursue an opportunity offered by the court to require Anita to submit to a vocational examination. Anita was never given a warning that she should try to become self-supporting.

In the current spousal support proceedings, the trial court found there was a change of circumstances warranting modification of Anita's spousal support based on the fact that the David/Audrey dissolution required David to support an additional household. (See In re Marriage of Smith, supra, 225 Cal.App.3d at p. 480 [modification of spousal support requires changed circumstances].) When evaluating the parties' respective assets to calculate the amount of spousal support, the trial court concluded that because Anita had failed to find employment during the 30 years of support by David, it would not reduce the value of her assets by the amount of her debts and the disrepair of her home as she had requested. The court reasoned that although it did not expect Anita to become fully self-supporting, it did expect that at some point during the 30 years of support she would have been able to find a job to generate some income, which could have been used to reduce her debts and repair her home.^[9] Thus, the court in effect imputed some income to Anita when calculating the net value of her assets.

The court explained that although section 4320, subdivision (l) (establishing the state's self-support policy) and the Gavron case did not exist at the time of Anita's original support order, under the law then applicable (former Civ. Code, § 4801) a court could consider a spouse's ability to engage in employment. Based on a consideration of the assets of all three parties, the trial court reduced Anita's monthly spousal support from $1,950 to $1,100.

Anita argues the trial court improperly considered her failure to become self-supporting when reducing her spousal support award. Citing Gavron, supra, 203 Cal.App.3d 705, In re Marriage of Heistermann (1991) 234 Cal.App.3d 1195 (Heistermann), and In re Marriage of Schmir (2005) 134 Cal.App.4th 43 (Schmir), she asserts the court's decision was contrary to the rule that a supported spouse must be warned before requiring self-support.

Although Anita may not have been fully advised that she was expected to seek work during the 30 years of support, the circumstances of this case support the fairness and reasonableness of the trial court's order.^[10] Gavron and Schmir are distinguishable because in those cases there was no showing the supporting spouse had a decreased ability to provide support, and spousal support was completely terminated without sufficient advance warning to the supported spouse that this might occur. (Gavron, supra, 203 Cal.App.3d at pp. 708, 711-713; Schmir, supra, 134 Cal.App.4th at pp. 53-58.) The factor found inequitable in these two cases was the termination of support without "fair notice of the expectation of self-sufficiency" and with no showing that self-support was achievable, or if achievable, with no reasonable time period to achieve it. (Schmir, supra, 134 Cal.App.4th at p. 54; Gavron, supra, 203 Cal.App.3d at pp. 711-713.) Similarly, in Heistermann, although the trial court gave the supported spouse a one-year notice of termination of support, the appellate court found an abuse of discretion because the supporting spouse was still capable of providing support and there was no showing that the supported spouse, who was disabled, could find employment. (Heistermann, supra, 234 Cal.App.3d at pp. 1198-1199, 1203-1204.)

Here, the basis for the reduction was the changed circumstance of the David/Audrey dissolution which significantly increased David's financial obligations. Regardless of whether a supported spouse has been warned that he or she is expected to become self-sufficient, the supported spouse is always subject to a reduction or termination of support in the event the supporting spouse suffers a substantial loss of financial means. Distinct from the focus in Gavron, Schmir, and Heistermann, the trial court here had to decide the amount of Anita's support based on the supporting spouse's diminished ability to provide support.

Section 4320, subdivision (n) authorizes consideration of "any . . . factors the court determines are just and equitable" in resolving the issue of spousal support. After it found changed circumstances based on the David/Audrey dissolution, the trial court considered all the circumstances in setting the amount of support for the two former wives, including Anita's decision not to pursue employment during 30 years of support. The trial court rejected David's request to terminate Anita's support, but charged some income to Anita when calculating Anita's assets for purposes of determining the amount of support. The trial court reduced Anita's support by $850 per month. She will continue to receive $1,100 monthly support. Arguably, the amount of the reduction could be supported based merely on the fact that David now had to pay support to Audrey as well.

In any event, we do not interpret the cases cited by Anita as suggesting that when there are changed circumstances increasing the financial obligations of a supporting spouse, a trial court may not properly exercise its discretion to impute a moderate amount of income to a supported spouse because of a failure to try to enter the job market during 30 years of support. (See In re Marriage of Morrison (1978) 20 Cal.3d 437, 453 [trial court may consider delay in seeking employment at spousal support modification proceeding].) Although there is broad language in Schmir stating that a Gavron warning is required before spousal support is "terminated or reduced," the facts in Schmir involve a complete termination of support. (Schmir, supra, 134 Cal.App.4th at p. 54, italics added.) Imputation of some income while retaining sizable permanent support is not the same as terminating support. Further, as we explained, an iron-clad prohibition against spousal support reduction without a Gavron warning does not logically apply in a case where the supporting spouse suffers a substantial loss of financial ability. Under the circumstances of this case, the failure to give a Gavron warning did not bar the trial court's exercise of its discretion to reduce Anita's spousal support.

DISPOSITION

The order and judgment are affirmed. Parties shall bear their own costs on the appeal and cross-appeal, except David shall pay Audrey's costs on appeal.

HALLER, J.

WE CONCUR:

McCONNELL, P. J.

BENKE, J.

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^[1] In re Marriage of Gavron (1988) 203 Cal.App.3d 705 (Gavron).

^[2] According to Kaseno, the IRA earned about 4.54 percent considering only interest and dividends, and about 6.47 percent considering the additional factor of growth in unrealized gains.

^[3] The $7,695 figure was for a "ten-year certain option," which guarantees benefits for 10 years even if he dies earlier; the $9,284 figure was for payments that end at his death.

^[4] Subsequent statutory references are to the Family Code unless otherwise specified.

^[5] After Gavron's holding, the Legislature enacted section 4330, subdivision (b), which gives the court discretion to advise the supported spouse "that he or she should make reasonable efforts to assist in providing for his or her support needs," unless "in the case of a marriage of long duration . . . the court decides this warning is inadvisable."

^[6] Section 4320, subdivision (l) provides that one of the circumstances the court should consider in ordering spousal support is "[t]he goal that the supported party shall be self-supporting within a reasonable period of time."

^[7] At the 1987 support modification proceeding, the trial court stated: "This court will order, if Dr. Stonecypher pays, Ms. Stonecypher meet with a vocational guidance counselor. She is certainly not beyond the age at which she could be employed. [¶] I understand that there are health considerations. They may preclude any attempts to obtain income through employment or through a business of her own. But I leave the option to Dr. Stonecypher if he feels it is reasonable to pay that amount to pay it and require Ms. Stonecypher to meet with a vocational guidance counselor."

^[8] However, as we will discuss below when addressing Anita's cross-appeal, the trial court reasonably exercised its discretion to reduce Anita's award based on the changed circumstance of the David/Audrey dissolution which increased David's support obligations.

^[9] The trial court was not persuaded by Anita's contention that her health problems precluded employment during the 30-year period.

^[10] As noted earlier, Anita was given some level of notice that she was expected to work if and when she was able to do so when the trial court stated in 1987 that she was "certainly not beyond the age at which she could be employed" and ordered that she submit to a vocational examination at David's request. (See Gavron, supra, 203 Cal.App.3d at p. 712 [court's ordering of vocational examination may be sufficient to implicitly advise supported spouse of self-sufficiency expectation].) However, David's failure to pursue the vocational examination option could have led her to believe she could still rely on his support. Thus, we will analyze the issue with the assumption that Anita was not given a sufficient Gavron warning.