What You Should Know About Alimony Payments
Many non-lawyers entertain quite a few misconceptions about alimony and how it works. For example, many people are under the false impression that the wife is automatically entitled to receive alimony in every divorce, that there are set formulas that must be followed, or that a husband will be required to pay his ex-wife alimony for the rest of her life.
It is important for both spouses to know what alimony entails, because it helps them attempt to negotiate a settlement agreement and tells them what to request in a divorce trial, if it is not possible to reach a resolution.
First, alimony is not the same as child support. Child support is ordered in every case involving minority children, because all children have a right to be supported by both parents. There are usually very specific guidelines that must be followed. On the other hand, alimony is based on the need of the lower earning spouse.
Where both spouses are working, and each makes a sufficient income to meet his monthly needs, the judge may deny alimony. If the spouses make approximately the same income, again, alimony may be denied. If one of the spouses is voluntarily unemployed or under-employed, the judge may impute income to that spouse and consider that assumed figure when making a decision.
Each state has different laws, so it’s important to check the law in your state. The judge has quite a bit of discretion in arriving at a final number.
When deciding whether to award alimony, there are a number of factors that a judge may consider. First, alimony is typically only awarded in long-term marriages, which is often defined as marriages of ten years or longer. In addition, the judge may consider the following factors:
- The total duration of the marriage
- The age and health of each spouse
- Each spouse’s education, training, and experience
- Each spouse’s ability to earn income in the future
- The marital assets awarded to the spouse, including whether the spouse can acquire income from those assets
- Any expected inheritance that a spouse may soon acquire
- The spouse’s separate property, including whether the spouse can acquire income from those assets
- Any other factor that the judge deems relevant.
In most cases, alimony is awarded for approximately half the duration of the marriage. It does not continue indefinitely. Where the divorce decree does not establish a set time period for alimony to be paid, the spouse paying alimony may seek to modify the payment if the circumstances change materially.
Usually, that means that the income of the spouse receiving income has increased, but it can also mean that the income of the spouse paying alimony decreased. In addition, in most cases, alimony will automatically terminate in the event that the spouse receiving it remarries or cohabitates with a new partner.
If the divorce decree does not specify that alimony terminates automatically in these situations, the spouse paying alimony may file a request for termination.
Because alimony is considered income to the spouse receiving it, it is taxable income that must be reported on her tax returns. The spouse paying alimony is able to take a deduction for the amounts paid. This is also important to consider when negotiating a separation agreement that includes alimony. In contrast, child support is not income and is not tax-deductible.