How Does Alimony Work?
How states define alimony differs, as does the process for awarding alimony and whether the state uses the term alimony vs spousal support. Some different alimony meanings include:
Temporary Alimony/Separation Alimony/ Alimony Pendente Lite
While this type of alimony may go by a variety of different names, it is typically financial support that is awarded while a couple is separated until the divorce is finalized. Once the couple divorces, the support may end, continue, or be modified, depending on the spouses’ circumstances. This alimony may be paid on a weekly or monthly basis until there is a new order.
This type of alimony helps to rehabilitate a spouse’s earning power. If a spouse was out of the workforce for some time in order to care for children or support the other spouse’s career, this type of alimony may be awarded to help the recipient spouse finish an educational degree or training program so that the spouse can become self-sufficient.
When considering awarding this type of alimony, the court may consider various factors, such as:
- The education of the recipient spouse
- The recipient spouse’s age and health
- How much time is necessary to make the spouse self-sufficient
- How much effort is necessary to complete the degree or training program
- The spouse’s experience, work history, and job skills
When awarding rehabilitative alimony, the court may order the payments until the spouse finishes the degree or training program, or it may set a time limit for this to occur…
With this type of alimony, payments are usually made on a monthly or regular basis until the order for alimony terminates.
This is a unique type of alimony that is awarded in the special situation when a spouse helped the other spouse complete his or her education or a work-related program that resulted in the other spouse earning more money. This form of alimony helps to reimburse the spouse who helped the other finish the program for the money and efforts spent in this regard.
This type of alimony is typically paid on an ongoing basis until 50% of the cost of the educational program is repaid to the recipient spouse.
Lump Sum Alimony
When most people think “what’s alimony?” they usually think of money transferred from one spouse to the other spouse after the divorce. However, in some situations, alimony is treated as a one-time event in which there is a lump sum that is paid to the spouse. This type of alimony may be paid through the transfer of money or some other type of property, including personal property, real property, or financial accounts, among others.
This type of alimony is what most people think about when contemplating what is alimony. It is the ongoing payment of money from one spouse to another spouse. Although the word “permanent” is used, some states do fix the duration of these payments, such as ordering it to be paid for 10 years or 20 years. However, in many jurisdictions, there is no clear answer to how long does alimony last and it may continue until the paying spouse retires, one of the spouses dies, or the recipient spouse remarries or cohabits with another person.
Permanent alimony is more likely to be ordered when there was a long-term marriage instead of in cases involving short-term marriages. Permanent alimony is usually awarded at the time of the final dissolution of the marriage. Alimony payments may be made in a variety of ways, including:
- Periodic payments (such as weekly or monthly)
- In-kind payments in which a third party is paid directly for their services to the spouse (such as mortgage or utility payments)
- Annuity payments
- Trust payments
How Is Alimony Calculated?
Unlike with child support, most states do not have guidelines that determine an exact amount of alimony that one spouse should pay to the other (though there are some exceptions).
So, how is alimony calculated? First, the court determines if alimony is necessary. If the spouses have similar earning capacities and resources, then alimony will not usually be awarded. Next, the court considers the spouse’s ability to pay.
Next, the courts consider a number of factors to determine alimony payments, including:
- The age and health of each spouse
- The separate property available to each spouse and the division of marital property
- The standard of living established during the marriage
- The education, work history, skills and earning capacity of each spouse
- The length of the marriage
- Whether the spouse who will receive alimony has custody of the children
- Fault or marital misconduct (not considered by all jurisdictions)
The court determines whether alimony payments should be ordered, in what amount and for how long.
How Long Does Alimony Last?
Alimony continues until the time designated by the court order, a condition in the court order is met (such as obtaining a college degree or remarrying), or until a spouse asks for payments to stop, such as because of a disability.
How Does Alimony Affect Taxes?
The Tax Cuts and Jobs Act changed how alimony affects taxes for divorces occurring on Jan 1. 2019 and thereafter. Previously, the person making alimony payments could deduct these payments. The person receiving alimony payments would have to include these amounts as taxable income. Now, neither spouse counts the payments, so there is no effect on taxes, like with child support payments.
However, divorces that were entered into via divorce or separation orders or agreements Dec. 31, 2018 or sooner and have not been modified to reflect this change, the old system will continue to be used.
How To Avoid Paying Alimony
When entering a marriage, many spouses consider options on how to avoid paying spousal support. Some ways to potentially avoid paying alimony include:
- Enter into a valid prenuptial agreement before your marriage
- Enter into a valid postnuptial agreement while you are married
- Trade a larger portion of property in lieu of making alimony payments
- Opt for lump-sum alimony to avoid ongoing payments
- Prove that your spouse does not need alimony or that you cannot afford to pay it
- Prove that your spouse engaged in marital misconduct if this is considered in your jurisdiction
- Prove that your spouse is cohabiting with another partner
Can A Working Spouse Receive Alimony?
To answer this question, it is important to consider what is spousal support. Originally, this support was provided primarily by male breadwinners to their wives who sacrificed their careers and own ambitions to care for their children, tend to the household, or support their husbands’ careers. Courts did not want these wives to become destitute simply because of divorce, so the alimony system was set up to provide financial relief and prevent wives from becoming dependent on public benefits.
This leads to some follow up questions:
Do I have to pay alimony to my husband? The alimony system and the workforce have drastically changed since the beginning of the alimony system and wives can be ordered to pay alimony to their husbands for the same reasons wives received alimony. While alimony is more often ordered against men than women, alimony statutes are not gender specific.
Can a working wife get alimony? Do you have to pay alimony if your spouse works? Yes. A working wife or spouse may be able to receive alimony if the incomes of the spouses is disparate and alimony is necessary to maintain the same standard of living enjoyed by both spouses during the marriage.
Which States Do Not Have Alimony?
All states will consider granting spousal support to a spouse. However, it may be easier to get alimony in certain states over others. For example, many states have eliminated or drastically reduced when they award temporary or permanent alimony. However, some states still award this type of alimony, including:
- New Jersey
- North Carolina
- West Virginia
Also, it may be more difficult to obtain alimony in community property states since the marital property is divided 50/50 so the spouses would be in about equal positions when leaving the marriage. Community property states include:
- New Mexico
- Alaska (if the spouses opt in)
My Spouse Refuses To Pay Alimony
If alimony is court-ordered and a spouse refuses to pay it, there may be a variety of enforcement mechanisms you can use to force your spouse to comply with the court’s order, such as seeking a contempt order or using an income withholding order to automatically deduct pay from his or her wages.