In a word, or actually in two words, alimony is spousal support. Specific laws and guidelines vary in different states. In general, a judge may award alimony if the obligee (person receiving payments) has an economic need, and the obligor (person making payments) has the ability to pay.
Spousal support (a/k/a maintenance) is a hot-button issue in family law. Several states, most recently Florida in 2023, have revamped their spousal support laws. To some people (mostly obligors), alimony is basically a divorce penalty. To others (mostly obligees), alimony is a key component of an equitable marital property division.
What’s the Difference Between Alimony and Spousal Support?
Alimony is based on the Latin word “alimonia,” which basically means “nourishment.” So, in many states, alimony often refers to temporary or short-term spousal support.
Temporary alimony payments help obligees pay attorneys’ fees and other divorce related expenses, such as rental property deposits and daycare costs. Short-term alimony gives additional financial help if needed. For example, Michelle might need to take a low-paying job after her divorce so she can re-integrate into the workforce, or Tim might need to finish the last bit of his college degree.
Durational and permanent spousal support are far more controversial. These payments equalize the standard of living between the two ex-spouses. Durational payments are usually available for a fixed period of time based on the length of the marriage, such as ten years of payments following a ten-year marriage. Obligees with serious disabilities are usually the only obligees entitled to permanent spousal support.
How Does Alimony Work?
In theory, men and women are equally entitled to spousal support/alimony payments. In practice, almost all obligees are women. Statistics vary, but according to most studies, roughly 40 percent of divorced women live below the poverty line.
Nevertheless, most women do not receive alimony, because they don’t qualify under the two-step eligibility process that most states use.
First, as mentioned, the obligee must demonstrate an economic need. If the obligee clears this hurdle, which is a big “if,” the judge typically determines the amount and duration of payments, based on factors like:
- Duration of the marriage,
- Future earning capacity of each spouse,
- Standard of living during the marriage,
- Noneconomic contributions to the marriage (sometimes known as the “homemaker factor”),
- Overall property division, and
- Custody of minor children.
A few states allow judges to consider fault in the breakup of the marriage or dissipation (waste) of marital assets. If Wife gave $10,000 to her boyfriend, Husband might be entitled to reimbursement from Wife.
The standard of living during the marriage might be the most important factor. In most states, a divorce cannot be an unfair financial burden on either spouse. As the above poverty statistic indicates, women are at a disadvantage in this area.
Is That Always the Way it Works?
A few states have ditched the factor-based approach and made alimony more like child support. Illinois is a good example. This formula is complex, so strap yourselves in.
The Prairie State ties the amount of payments to the relative incomes of the spouses, and the duration of payments to the length of the marriage.
Maximum payment amount is 33.3 percent of the obligor’s net income minus 25 percent of the obligee’s net income. In any event. The payment amount cannot exceed 40 percent of the combined income of the parties.
The duration of payments begins at 20 percent of a less-than-five-year marriage (e.g. ten months following a forty-eight month marriage). The percentage moves up and maxes out at 80 percent of a nineteen or twenty-year marriage (e.g. 192 months following a 240-month marriage). Judges have discretion to set the duration if the spouses were married more than twenty years.
Can I Change the Amount or Duration of Payments?
Yes. In most states, the judge can modify the amount and/or duration of payments when financial or emotional circumstances change.
Income increases or decreases are the most common kinds of alimony modification. The initial determination was based on a financial snapshot at the time of divorce. The picture usually changes year to year.
Some important notes. First, the changed circumstances must be permanent. The judge won’t increase spousal support payments if Wife had a huge car repair bill or Husband got a big bonus. Additionally, the change must be unanticipated. The obligor’s retirement is usually not an unanticipated change.
Financial modification is often a tedious process. Intentional over-withholding is a good illustration. Some obligors intentionally over-withhold income tax payments to decrease their net incomes. Then, they get that money back in the spring without paying alimony on it.
Emotional changes might be more straightforward. The obligee’s marriage terminates a spousal support obligation. End of story.
These modifications are more difficult if the obligee doesn’t legally marry but is in a long-term romantic relationship with another person. In these cases, the judge usually asks more questions. Are the two people cohabitating? Do they have a joint bank account? Have they made a large joint purchase, like a house?
Incidentally, the obligee’s remarriage usually doesn’t terminate a child support obligation, unless the new spouse legally adopts the stepchildren.
How Does the IRS Tax Spousal Support Payments?
The law recently changed on this point. For many years, the law allowed obligors to deduct alimony payments and required obligees to report these payments.
Effective January 1, 2018, the tables turned. As of that date, payments aren’t deductible and receipts aren’t reportable. Advocates insisted the change helped women. They argued the change allowed women to increase or decrease their reported income to creditors. However, the jury is stil out (pardon the pun) as to whether the change benefits women.
Modifications are probably the biggest issue. Technically, the most recent court order is the controlling court order. However, if a post-2018 order changes a pre-2018 spousal support obligation, payments might still be deductible and receipts might still be reportable. This issue also affects spousal support enforcement, as outlined below.
Other nuances apply. For example, the “family support payment” bundle was once very common in many states. Payors lumped child support and spousal support payments together for tax purposes. This bundle is still available in a few jurisdictions.
Finally, note that these are the IRS rules. Separate state revenue agencies might or might not have different rules.
How Can I Collect Unpaid Alimony?
Enforcing alimony payments, like setting and modifying these payments, is a delicate matter. In most states, lawyers have several options.
If the obligor is fewer than six months behind, a demand letter is often a good idea. The typical letter demands a certain proportion, usually half, upfront, and proposes a repayment plan for the balance. The typical letter concludes with a rather vague “or else” threat.
This approach is also a good idea if the obligor might react violently or rashly to a delinquency notice. The last thing you want to do is pour gasoline on a smoldering fire.
A more serious delinquency usually merits a stronger response. Most people cannot catch up if they’re twelve or fourteen payment behind. These stronger responses include:
- Withholding Order: Most states allow obligees to withhold up to 50 percent of obligees’ net pay to satisfy outstanding spousal support payments. This option is tricky, since many companies use out-of-state payroll processors.
- Payment Intercept: We mentioned tax returns above in the context of hiding income. Obligees can also intercept these payments if the recipient is behind on spousal support payments. Other windfalls, like stimulus payments and lottery winnings, are subject to payment intercept as well.
- Credit/Property Lien: Initially, a property or credit lien is meaningless. Sooner or later, however, the obligor will try to sell the property or borrow money. The lien must be satisfied, and the obligee has the upper hand in financial negotiations.
In rare cases, a judge may incarcerate delinquent obligors or place them on probation. Technically, a failure to pay alimony is a violation of a court order.
Can I Avoid Paying Spousal Support?
One way to avoid paying spousal support is to contest the obligee’s economic need. For example, Wife might claim Junior should be in an expensive Montessori after-school program when a much cheaper after-school babysitter or YMCA program might be available.
A premarital agreement is usually a better way. Most states have adopted the Uniform Premarital and Marital Agreements Act. The UPMAA contains streamlined rules for the contents of a premarital agreement, such as a spousal support limit. The UPMAA also makes it difficult for a spouse to successfully overturn an unfavorable premarital agreement.
Prenups are often a good idea in other cases as well. These pacts resolve money disputes before the couple ties the knot, so these matters don’t poison the relationship. Prenups also cover other areas, like inheritance and succession matters. In other words, a prenup often puts a marriage on a stronger foundation.
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