BOSTON (Reuters) - The highest court in Massachusetts on Monday said a senior executive at Fidelity Investments will not have to pay a percentage of his future income to his former wife in a closely watched decision that dealt a setback to variable alimony awards in the state.
The Massachusetts Supreme Judicial Court ruled in favor of Derek Young, president of Fidelity’s global asset allocation division, whose annual gross income has topped $7 million in recent years. The court concluded that Young’s former wife, Joy, was not entitled to 33 percent of his future income, according to an opinion released on Monday.
“Although there might be circumstances where it is reasonable and fair to award a percentage of the supporting spouse’s income as general term alimony to the recipient spouse, those circumstances are not present in this case,” the high court said in its ruling.
The court remanded the case to the probate and family court in Norfolk County, Massachusetts, where the Youngs had a four-day divorce trial in 2013. The high court ordered the lower court to enter a new alimony award in light of its opinion.
“I think she’ll do just fine on the remand,” said David Cherny, a Boston attorney representing Joy Young. He said the lower court judge could rule her alimony be 30 percent to 35 of the difference between the parties’ gross incomes, as allowed by state law.
“On the downside, if (Derek Young’s) future lifestyle triples, she will have the same lifestyle,” Cherny said.
David Lee, an attorney for Derek Young, called the high court’s opinion an important clarifying decision because the lower court will have to consider Joy Young’s lifestyle before the couple separated, not what it might have been had there been no divorce.
“The parties were living in a lavish, eight-bedroom home, driving luxury vehicles and regularly dining out three to four times a week at expensive restaurants,” the high court said in its opinion. The couple also had purchased a summer home in Nantucket.
Joy Young’s weekly expenses totaled $8,728, or $453,856 per year, according to an October 2013 financial statement filed in the case. About a year later, those expenses escalated to about $12,576, or nearly $654,000 a year, according to details in the high court’s opinion.
Derek Young’s gross income at Fidelity increased to $7.76 million in 2012 from about $1.53 million in 2008, court records show.
Reporting by Tim McLaughlin; Editing by Dan Grebler