Alimony / Spousal Support Law
Sometimes when a marriage ends, one spouse will continue providing money to the other spouse, even after the divorce. This has traditionally been called alimony, but some states refer to it as spousal support. There are a number of different kinds of spousal support, and spousal support is completely different from child support. However, the custody of children may be taken into account in establishing spousal support amounts.
Calculating Alimony
Many states provide alimony worksheets or formulas as a starting point for determining spousal support. Alimony is generally calculated by using each ex-spouse’s earning capacity and their needs. A party's earning capacity may be higher than their actual income if a court determines that they have voluntarily taken a job that pays significantly less than what they could reasonably earn with their skills and experience. This is especially true if the court suspects that the party took the job to avoid paying alimony or to receive higher alimony payments.
After determining each ex-spouse’s earning capacity, courts usually consider an array of other factors that may adjust a spousal support obligation up or down. For example, in California, a court will consider child custody and the marital standard of living, but will only consider fault if an ex-spouse committed domestic violence. California also considers things such as an ex-spouse’s contribution to the other’s career, the length of the marriage, the age and health of the parties, the distribution of other assets and obligations, and the ability of the paying party to continue meeting their own needs.
Short-Term Alimony
Short-term alimony is the most common form of alimony. It is often preferred over long-term alimony when the parties were married for a relatively short time (usually less than 10 years) or an ex-spouse needs help with becoming self-sufficient after divorce. For example, a court may award rehabilitative alimony during the time that an ex-spouse needs to become employable by going back to school or taking an employment training program. Rehabilitative alimony in particular is more common when one spouse stayed home to take care of children during the marriage to the detriment of their career.
Short-term alimony varies in length. It may be ordered for a definite period of time, such as for two years from the date of divorce, or it may be ordered for however long it takes to achieve its purpose. For example, a judge may order rehabilitative alimony until the recipient spouse completes their reeducation course. In these instances, a judge may periodically review the situation to ensure that the recipient spouse is genuinely working toward gainful employment.
Long-Term Alimony
Generally, courts have tended to move away from long-term alimony and toward shorter-term alimony with a specific purpose. However, there are some circumstances in which long-term alimony may be appropriate. For example, an ex-spouse whose disability prevents them from ever working again may reasonably receive long-term alimony. An ex-spouse out of the workforce for so long that they would not be able to find gainful employment even after pursuing education or licensure may also be eligible for long-term support. Long-term alimony is not always based on financial need. For example, a court may award reimbursement alimony because one spouse sacrificed education, training, or other career advancement for the betterment of the marriage, regardless of their present ability to support themselves.
In some cases, long-term alimony will be paid until one party dies or the recipient of the alimony remarries, but long-term alimony that is effectively permanent is rare. Many states have introduced laws that limit alimony, such as laws that prevent an ex-spouse from receiving alimony when they reach retirement age.
Lump Sum Alimony
Lump sum alimony is often more similar to asset division than alimony. Divorcing spouses may prefer a lump sum payment to the idea of being connected to their ex-spouse past their divorce date. Often, spouses will agree to a discounted lump sum payment in exchange for the benefit of receiving all the money at once.
Third-Party Support
In many cases, in addition to direct payments, an ex-spouse will be ordered to make payments to third parties as support. This may be in the form of health care coverage, mortgage payments, school tuition, life insurance, or another third-party payment. Life insurance or disability insurance may be especially valuable third-party support to protect the beneficiary ex-spouse if the paying spouse dies or suffers a disability affecting their income.
Alimony and Taxes
Before 2018, an ex-spouse paying alimony could deduct it from their income for tax purposes, and the recipient ex-spouse was obligated to declare the payments, including payments to third parties, as income. However, alimony payments made under divorce or separation agreements executed after December 31, 2018 are neither deductible by the paying ex-spouse nor taxable to the recipient ex-spouse. Parties should confer with a lawyer or tax specialist, since tax laws sometimes change.
Terminating Alimony Payments
Circumstances for termination or modification of alimony vary depending on state law and the parties’ alimony agreement. A support agreement may explicitly state the circumstances under which alimony may be terminated or modified (if at all). However, state laws sometimes impose additional rules. For example, many states call for reevaluation or termination of alimony when a recipient ex-spouse remarries. A court may be willing to review alimony arrangements when there is a significant change of circumstances, although some states prohibit any modification after a divorce is final. A skilled divorce attorney will be able to guide ex-spouses through the specific laws of their state.
