August 01, 2020 Feature

A Brief Primer on Alimony

Brittany Ranson Stonestreet and Andrea Cozza

Alimony (also referred to as “spousal support” or “maintenance”) is the payment of financial support for a dependent spouse’s benefit during or after a divorce. The support could be paid by direct payment of funds to the dependent spouse or to a third party for the dependent spouse’s benefit (e.g., mortgage payment, car payment, or health insurance payment). Alimony could be paid as a result of a written agreement between the parties or by court order. State laws vary as to what information courts will rely on when awarding alimony. Most states give judges considerable flexibility (referred to as “judicial discretion”) in determining the amount and duration of alimony given the particular facts of each case. However, in limited states or counties, your judge may use a formula to calculate the alimony award. Due to the differences among states, you should always consult with an attorney in your area to find out what rules will apply in your case. The information below is intended as a general overview.

Types of Alimony Payments

There are several possible types of alimony:

  • A temporary/pendente lite alimony payment may be ordered during the divorce proceeding in states where judges have the authority to order it. Temporary alimony may be awarded to a dependent spouse to ensure his or her financial expenses are met during the divorce proceeding. On a temporary basis, the judge will often try to preserve the parties’ financial “status quo” while also considering each party’s temporary living expenses and current income. How the court divides the temporary payment of marital expenses during the divorce process (i.e., who is ordered to pay for the mortgage, car payments, insurance, credit cards) could either increase the dependent spouse’s need or decrease the income-earning spouse’s ability to pay temporary alimony depending on who is ordered to pay. Temporary alimony typically terminates upon entry of a final divorce order (or order modifying it) and may or may not be replaced with one of the other forms of alimony below.
  • Lump-sum alimony or alimony in gross is a fixed dollar amount that is paid in a lump sum or over installments for a set duration. For example, a judge may order a one-time payment of $36,000 or order payments of $1,000 per month for 36 months. Alimony in gross is typically not modifiable and may be ordered to be paid from the parties’ estate. A lump-sum alimony award (also known as an “alimony buyout”) may be beneficial to avoid the uncertainty of future events. For instance, a lump-sum alimony award would not be affected if the income-earning spouse loses his/her employment several years after the divorce.
  • Periodic alimony is awarded for a set amount over a set duration ($1,000 for 36 months). Unlike alimony in gross, which could also be paid over a set number of months, periodic alimony is often modifiable and intended to support the dependent spouse over a set period of time. Some states set forth durational parameters for a periodic award based on the length of the parties’ marriage (i.e., 50 percent of the length of the parties’ marriage), while other states give the judge discretion to set a duration consistent with the facts of the case.
  • Rehabilitative alimony is paid to the dependent spouse to enable him or her to obtain education or training within a reasonable time. The goal is that the education or training will ultimately increase the dependent spouse’s income so that he or she can become self-supporting on his or her own.
  • Reimbursement alimony is awarded to reimburse one spouse for the unrealized contributions he or she made toward the other spouse’s education or income during the marriage. For example, a working spouse supports the household while the student spouse attends pharmacy school. Upon graduating, the student spouse obtains employment earning $150,000 per year. Shortly after, the student spouse files for divorce. The working spouse’s financial support was made with the expectation of a higher marital standard of living that did not come to fruition because of the divorce. Therefore, it may be appropriate to reimburse the working spouse.
  • Permanent alimony, in states that permit it, is awarded for the dependent spouse’s life. Permanent alimony is more likely to be awarded where the parties had a long-term marriage (over 20 years) and/or where there is little chance that the dependent spouse will become self-supporting (e.g., for significant health reasons). The dependent spouse’s inability to be self-supporting is often a result of forgoing employment during the marriage in order to maintain the household or raise the parties’ children or can be a result of the dependent spouse’s age or health. This alimony often can be modified after entry of the original order if there are material changes in circumstances (e.g., retirement, loss of income, health issues).

Court's View

  • Factors vs. formula. A few states or counties within states use a formula, as with child support, as a guide to determine the amount and/or duration of alimony. These formulas are most often used in awarding temporary alimony. The majority of states require the judge to weigh a number of factors in determining the type, duration, and amount of alimony. Although each state may require different factors, the majority consider, at minimum, the length of the marriage, each party’s net income, and each party’s monthly expenses or budget (the income-earning spouse’s ability to pay and the dependent spouse’s need). Other considerations might include, but are not limited to: (1) whether one spouse gave up employment for an extended period of time, often to raise the parties’ children; (2) whether the parties will have health insurance available after the divorce; (3) the parties’ work histories and educational backgrounds; (4) the parties’ standard of living during the marriage; (5) the age and health of the parties; and (6) the dependent spouse’s responsibility to take care of the parties’ minor children or other dependents. As discussed below, the judge may also be permitted to consider one party’s fault in causing the dissolution of the marriage.
  • Impact of property distribution. In some states, alimony is a secondary remedy, meaning that if there are sufficient assets or income awarded in the property distribution, then alimony may not be awarded. In other states, the judge has less flexibility to consider the distribution of marital property, including income-earning property, to one spouse. The theory is that the lesser-earning spouse should not have to live on his or her marital property distribution while the other spouse earns significantly more income and continues to accumulate his or her separate estate.
  • Fault factor. The impact of fault on an award of alimony varies widely by state. In very few states, if the dependent spouse cheated, or committed some other marital misconduct, he or she is completely barred from seeking alimony regardless of how long the marriage is or the difference in the party’s incomes. Other states completely disregard one party’s fault, choosing instead to focus on the parties’ financial circumstances and other factors. Most states can consider a party’s fault or marital misconduct in an award of alimony, but only in conjunction with the many other factors discussed above, such as length of marriage, income, and expenses.

Modification of Alimony

If the type of alimony is subject to modification, then the court may consider a modification of a court-ordered alimony award if there has been a substantial or material change in the circumstances of one of both of the parties. For instance, the retirement or disability of the income-earning spouse resulting in a reduction of income may qualify as such a change. Some courts may require the order to specifically state that the award is modifiable and the court retains jurisdiction over support. If that language isn’t included, in some states it could eliminate the ability of the court to modify upon request of a party.

Termination

Whether you are receiving or paying alimony, most people want to know what circumstances will give rise to termination of the support. In some cases, alimony terminates automatically; in others, it requires one party to file a motion with the court asking that the support be terminated. Depending on the type of alimony awarded, it may terminate upon one of the following occurring:

  • Remarriage. In most states, unless the parties have agreed otherwise, alimony will terminate if the dependent spouse gets remarried. This makes sense because it is presumed that the new spouse will assist with meeting the newly formed household needs.
  • Cohabitation/de facto marriage. In some states, alimony can be terminated when the dependent spouse cohabitates or lives with a significant other. Other states require a more difficult determination that the dependent spouse has entered into a “de facto marriage.” Whether the dependent spouse is in a de facto marriage is determined by a number of factors but can include cohabitation. The judge may also consider things like whether the dependent spouse and his/her significant other are acting like husband and wife, such as sharing household expenses, having joint bank accounts, or referring to themselves as spouses.
  • Death of the dependent spouse. Most alimony awards terminate upon the death of the dependent spouse. However, there are some general exceptions.
  • Death of the payor spouse. Most alimony awards terminate upon the death of the payor spouse. However, some types of alimony, such as rehabilitative support or alimony in gross, may continue as a claim against the payor’s estate.
  • End of the term. If alimony was awarded for a set number of months, then it will automatically terminate at the end of the term.

Tax Implication

Prior to December 31, 2018, the dependent spouse was required to pay taxes on the alimony he or she received and the payor spouse was permitted to deduct from his/her income the alimony paid. After the 2017 Tax Cuts and Jobs Act, any new alimony awarded after December 31, 2018, is no longer treated as income to the dependent or deductible to the payor for federal income tax purposes. Simply put, if you receive an alimony award after December 31, 2018, you are receiving it without any tax obligations for federal purposes. Be aware: You may still have to report the alimony as income for state income tax purposes based on the laws of your state. Likewise, depending on your state regulations, you may be permitted to deduct the alimony from your income for state income tax purposes only.

Helpful Documentation for Your First Attorney Appointment When Alimony Is at Issue

When alimony is at issue, it is helpful to bring the following information, or at least a general understanding of it, to your first appointment with your attorney:

  1. Current income documentation for you and your spouse.
  2. Tax returns from the last three years.
  3. Itemized monthly expenses (or at least a general idea).
  4. Evidence regarding the other party’s fault, if applicable in your state.
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Brittany Ranson Stonestreet is an attorney at Lyne Ranson Law Offices, PLLC in Charleston, West Virginia, and practices exclusively in the area of family law. She is the co-author of Divorce in West Virginia and serves as the Alimony Committee Chair for the ABA Family Law Section.

Andrea L. Cozza is a domestic relations attorney with Treneff Cozza Law, LLC in Westerville, Ohio. She is a Fellow with the American Academy of Matrimonial Lawyers and a certified specialist in Family Relations Law through the Ohio State Bar Association.