11 Spousal Support

What Is Spousal Support Spousal support is an allowance for support and maintenance that one spouse may be ordered by a court to pay to the other spouse while they are divorced or living apart. Spousal support is also called alimony, maintenance or separate support depending on the circumstances.

Development of Spousal Support Under common law, judges could order husbands to provide for an innocent wife after a marriage ended based on an assumption that she lacked the ability to provide for herself.

Development of Spousal Support Since the onset of no-fault divorce and the revision of property division laws allowing women to be awarded an equal or equitable share of marital property, alimony awards have decreased significantly in number. Today it is estimated that the frequency of alimony awards granted upon divorce is 10–15%.

Development of Spousal Support The purpose of alimony is no longer to punish an obligor or to reward an innocent spouse. See Case 10.1 Mani v. Mani (2005) on page 401 and 402 of the text. Mani v. Mani, 183 N.J. 70, 869 A.2d 904 (2005)

Development of Spousal Support The purpose of alimony today is usually to enable a dependent spouse to develop skills, enter or renter the workforce and become self-sufficient in a relatively short period of time. Most states gender-neutralized their alimony statutes on their own initiatives in the 1970s.

Differences Between Alimony and Property Divisio Originated in the common law duty of a husband to support his wife Focuses on what each party will need going forward into the future

Differences Between Alimony and Property Division Is based on one party's need and the other party's ability to pay along with other factors laid out in statutes and case law Requires personal jurisdiction over the defendant who must receive proper notice

Differences Between Alimony and Property Division Usually involves payments made on a periodic basis Usually payable over a period of time and payments vest as they fall due Usually modifiable based on a material change of circumstances Tax deductible to the payor and income to the payee

Differences Between Alimony and Property Division Generally not dischargeable in bankruptcy Usually terminated by death except for arrearages

Differences Between Alimony and Property Division Usually terminates on the recipient's remarriage absent a statute, order, or agreement to the contrary No longer primarily punitive though some courts consider misconduct during the marriage especially economic misconduct

Differences Between Alimony and Property Division Evolved with no-fault divorce and a view of marriage as a partnership At the time of divorce, looks back to identify assets and liabilities that should be divided

Differences Between Alimony and Property Division Based on the concept that both parties contributed to the marriage and that marital property should be divided upon divorce according to equitable distribution or community property principles

Differences Between Alimony and Property Division The court needs personal jurisdiction over the parties and the property to be divided Usually involves transfers of property at the time of divorce

Differences Between Alimony and Property Division Property division orders are effective and rights to property vest as of the date of divorce and are enforceable against the other party's estate as a debt Absent fraud, property division is rarely modifiable

Differences Between Alimony and Property Division Transfers of property upon divorce are not taxable events Property division settlements in the nature of "support" usually are not dischargeable in bankruptcy.

Differences Between Alimony and Property Division Property division is not affected by the death or remarriage of a party. Some states still consider serious marital fault especially economic misconduct in the property division context.

Initial Steps Toward an Alimony Award What is the governing law in the jurisdiction with respect to alimony awards? Have the parties executed a premarital agreement, and if so, what does it provide with regard to alimony? Does one party have a need for alimony that the other party has the ability to pay?

Initial Steps Toward an Alimony Award What factors will the court consider when making alimony decision? Is one or both of the parties likely to file for bankruptcy at some point?

Most Common Types of Alimony Temporary alimony/alimony pendente lite Interim alimony ordered by the court pending an action for divorce or separation in which a party has made a claim for alimony

Most Common Types of Alimony Permanent/traditional alimony Alimony usually payable in weekly or monthly payments, either indefinitely or until a time or circumstance stated in a court order Term alimony Alimony payable in weekly or monthly payments for a specified period of time

Most Common Types of Alimony Rehabilitative/Transitional alimony Alimony considered necessary to assist a divorced person in acquiring the education or training required to find employment outside the home or to reenter the labor force

Most Common Types of Alimony Restitution/reimbursement alimony Alimony designed to repay a spouse who during the marriage made financial contributions that directly enhanced the earning capacity of the other spouse

Most Common Types of Alimony Separate maintenance An amount paid by one married person to the other for support if they are not divorced but are no longer living together as husband and wife Lump-sum alimony/alimony in gross Alimony in the form of a single and definite sum and usually not subject to modification

Factors the Courts Consider When Making Spousal Support Determinations The authority to award alimony is statutory and although few states have formulas, courts in most states are guided by a series of factors laid out in statutes for consideration. The threshold question is does one of the parties have a need for financial support that the other party has the ability to pay?  

Factors the Courts Consider When Making Spousal Support Determinations Other factors often considered include the following: Financial resources of the parties including earned and unearned income of each party The parties' respective liabilities The relative current and future earning capacities of the parties

Factors the Courts Consider When Making Spousal Support Determinations Other factors often considered include the following: Contribution of each party as homemaker Age of the parties Length of the marriage Standard of living during the marriage

Factors the Courts Consider When Making Spousal Support Determinations Other factors often considered include the following: Health of each party Tax consequences of the property division

Factors the Courts Consider When Making Spousal Support Determinations Other factors often considered include the following: Property brought to the marriage by either party Contribution of either party to appreciation of the marital estate and/or to the increased earning power of the other party

Factors the Courts Consider When Making Spousal Support Determinations In a contested alimony case, the family law team may be presented with a monumental information-gathering challenge. Each relevant factor must be addressed and supported by provable facts backed by admissible evidence.

Factors the Courts Consider When Making Spousal Support Determinations Alimony cases are fact-intensive—there are no substitutes for careful listening and thorough preparation.

Provisions Included in an Alimony Provision in a Separation Agreement The goal of the alimony Designation of the payment(s) as alimony The amount The duration Frequency and timing of payments

Provisions Included in an Alimony Provision in a Separation Agreement Form of payments Modification Health care insurance Security for payments Survival or merger of the alimony provision

Modifying Alimony Awards If permanent or term alimony was awarded in the parties' decree, most states allow a party to file a later Complaint or Petition for Modification based on a material change in circumstances. Absent an agreement, extraordinary circumstances, or extreme hardship, a lump-sum, rehabilitative, or restitution alimony award will not be modifiable.

Modifying Alimony Awards The decision to modify alimony is made on a case-by-case basis and is driven by statute, court order, case law, and/or the language of a premarital or separation agreement of the parties. Parties will be held to their agreements absent extraordinary circumstances. The burden of proof rests on the party seeking the modification.

Modifying Alimony Awards There are no fixed rules for what constitutes a sufficient "material change in circumstances."

Modifying Alimony Awards Examples of potential sufficient changes if they have occurred in good faith include among others: A forced early retirement or unemployment The onset of a serious medical condition

Modifying Alimony Awards Examples of potential sufficient changes if they have occurred in good faith include among others: Cohabitation of the recipient with someone who assumes responsibility for many of his or her living expenses A windfall increase in income or assets

Terminating Alimony Awards Unless otherwise provided in a decree or based on its nature as alimony-in-gross, an alimony obligation will usually terminate upon the earliest to occur of the following events: Death of the recipient unless the parties' agreement provides otherwise Death of the payor

Terminating Alimony Awards Unless otherwise provided in a decree or based on its nature as alimony-in-gross, an alimony obligation will usually terminate upon the earliest to occur of the following events: Expiration of a stated period of time Remarriage of the recipient

Terminating Alimony Awards Unless otherwise provided in a decree or based on its nature as alimony-in-gross, an alimony obligation will usually terminate upon the earliest to occur of the following events: Cohabitation of the recipient with another (the parties' agreement may specify conditions such as the length and nature of the cohabitation and whether or not the cohabitant contributes to the recipient's living expenses)

Terminating Alimony Awards Unless otherwise provided in a decree or based on its nature as alimony-in-gross, an alimony obligation will usually terminate upon the earliest to occur of the following events: A condition specified in the parties' agreement such as completion of a particular education program or recovery from a serious illness

Enforcing Alimony Award In most jurisdictions, the primary enforcement vehicle for nonpayment of alimony is a contempt action: civil or criminal. Civil contempt A sanction for failure to obey a court order issued for another's benefit The action is remedial in nature and is designed to promote compliance with the order.

Enforcing Alimony Award In most jurisdictions, the primary enforcement vehicle for nonpayment of alimony is a contempt action: civil or criminal. Civil contempt If the defendant is found in civil contempt, the court usually will order payment of the overdue alimony amount according to a schedule tailored to their ability to pay.

Enforcing Alimony Awards In most jurisdictions, the primary enforcement vehicle for nonpayment of alimony is a contempt action: civil or criminal. Civil contempt Although the court can impose a jail sentence for an indefinite period to compel payment, the defendant is usually given the chance to pay the arrearage and purge the contempt especially if there was an inability to pay or the arrearage was the plaintiff's fault.

Enforcing Alimony Awards Criminal contempt Criminal contempt is a punishment for failure to comply with a court order. The proceeding is punitive in nature and is designed to punish an attack on the integrity of the court. The court may impose a jail sentence for a fixed period and the contempt cannot be purged by payment.

Enforcing Alimony Awards Additional enforcement methods include the following: If the alimony recipient is also receiving child support, he or she can seek assistance from the state's IV-D agency and its arsenal of enforcement measures including income withholding and tax refund intercepts.

Enforcing Alimony Awards Additional enforcement methods include the following: In some circumstances, the recipient may seek to place a lien on property owned by a defendant found in contempt.

Enforcing Alimony Awards Additional enforcement methods include the following: If the obligor dies while the arrearage still exists, the recipient can file a claim against the obligor's estate if payment was not otherwise secured by an agreement of the parties or an order of the court.

Tax and Bankruptcy Implications of Alimony Under federal and state tax laws, alimony is deductible from gross income by the payor and income to the payee if certain conditions are met. The payments are made incident to a divorce decree or separation agreement. The parties do not file a joint tax return for the period when the payments are made.

Tax and Bankruptcy Implications of Alimony Under federal and state tax laws, alimony is deductible from gross income by the payor and income to the payee if certain conditions are met. The parties are not living in the same household.

Tax and Bankruptcy Implications of Alimony Under federal and state tax laws, alimony is deductible from gross income by the payor and income to the payee if certain conditions are met. The payments are made in cash (check, money order etc.) and not in-kind (for services rendered). The payor has no liability for payments after death.

Tax and Bankruptcy Implications of Alimony Under federal and state tax laws, alimony is deductible from gross income by the payor and income to the payee if certain conditions are met. The payment is not improperly disguised child support. The parties have not designated the payments as nonincludable in the recipient's income.

Tax and Bankruptcy Implications of Alimony Under the alimony recapture rule, the government/IRS can recover a tax benefit (such as the prior claiming of a deduction for payment of alimony) by taxing the income it finds no longer qualifies for the benefit.

Tax and Bankruptcy Implications of Alimony There is no hard and fast rule regarding what can be discharged in bankruptcy. However, the general rule is that domestic relations obligations (DSOs) in the nature of alimony, maintenance, or support established in a court decree are not dischargeable in bankruptcy.

Trends in Alimony Alimony law appears to be moving into a new era with several new trends including: Establishment of durational limits on alimony awards Identification of specific forms of short term alimony Recognition of "lost economic opportunity" as a result of marriage

Trends in Alimony Alimony law appears to be moving into a new era with several new trends including: Decreased emphasis on fault in alimony determinations Increased acknowledgment of premarital and post divorce cohabitation Movement towards the development of guidelines for calculating alimony

The Paralegal's Role in a Spousal Support Case Some of the most important tasks commonly performed by paralegals in spousal support cases include the following: Researching applicable governing law (statutes, court rules, and case law)

The Paralegal's Role in a Spousal Support Case Some of the most important tasks commonly performed by paralegals in spousal support cases include the following: Gathering information relevant in spousal support cases See Paralegal Application 11.1 The Fact-Finding Mission in an Alimony Case on pages 415-417 of the text.

The Paralegal's Role in a Spousal Support Case Some of the most important tasks commonly performed by paralegals in spousal support cases include the following: Drafting discovery requests with particular attention to the factors courts consider when making decisions about spousal support.

The Paralegal's Role in a Spousal Support Case Some of the most important tasks commonly performed by paralegals in spousal support cases include the following: Drafting spousal support provisions for inclusion in separation agreements See Paralegal Application 11.2 Drafting Pointers for an Alimony Provision in a Separation Agreement on pages 417-419 of the text.

The Paralegal's Role in a Spousal Support Case Some of the most important tasks commonly performed by paralegals in spousal support cases include the following: Helping prepare for trial by drafting documents, designing exhibits, and assembling trial and exhibit notebooks.