Going through a divorce can be quite draining emotionally and financially, all the more so if you can’t settle out of court.
There is also the question of alimony. Should you ask for alimony, or will your spouse ask for it? How does it all work, and what is alimony in the first place?
Alimony is regular financial support made to one spouse by the other during or after a separation or divorce agreement. It’s worth noting that the process of divorce and dissolution of marriage varies from state to state. What they have in common is that if you end a civil union or marriage, property division and alimony rules will apply. However, these rules don’t pertain to domestic partnerships.
What Is the Purpose of Alimony?
The purpose of alimony isn’t to equally distribute finances between the spouses. Instead, alimony is meant to provide sufficient finances for the lower-income spouse to sustain a similar standard of living that they had while the marriage lasted.
Traditionally, alimony was reserved for wives, but that changed in 1979 when the Supreme Court ruled that alimony is gender-neutral.
What Is Alimony Based on?
A significant factor that has to be taken into account is how long the marriage lasted. If it was short-lived, neither of the spouses would be awarded alimony. The longer the marriage lasted, the longer the spouse will receive the alimony check.
For example, if the marriage lasted five years, the spouse will receive alimony payments for one year. Each year of marriage prolongs the total alimony payment period by 4%. In the case we mentioned, for five years of marriage, the spouse will get 20%, which is one year. If the marriage lasted 15 years, the alimony payments would continue for 60% of the marriage length or nine years in total. However, in case the marriage went on for over 20 years, the court may order alimony for the duration of the union or for life.
These figures are only useful as a guideline since each state has its own manner of determining the alimony amount and how long it will be paid. Another important factor is whether or not children from that marriage need to have a full-time parent at home.
We recommend that you seek professional advice from attorneys from your state for proper estimates and advice.
How Does Alimony Work?
Alimony payments are usually made once a month, but there are cases when they are weekly or bi-weekly. These payments will continue until one of the following criteria is met: The date the court has set passes, the spouse who received the alimony check remarries or enters a civil union, one of the spouses passes away, or the court rules that the spouse receiving the check didn’t make any progress to become self-sufficient.
Please keep in mind that alimony isn’t a reward. It’s only meant to be a temporary measure until the lower-income spouse can attain the same quality of life on their own as they had previously enjoyed.
Spouses can only ask for alimony when filing for divorce or dissolution. It can’t be requested once the process has been completed.
What Is the Average Amount of Alimony?
The alimony sum varies from case to case and can be settled out of court. If an agreement can’t be reached, one of the parties must initiate court proceedings to resolve the matter.
Nevertheless, the process isn’t straightforward as the spouse looking to get alimony has to prove to the court that their standard of living will deteriorate without it.
The first thing the court considers is how much each spouse earns. But it won’t look only at what they are earning at that moment. If one of the spouses held a job that made them $70,000 a year but for some reason changed to one that now earns $50,000, the judge may decide to use the better-paying job as a base. In that case, the spouse will be asked to prove to the court why they had to switch to a lower-paying job.
Depending on the state, we need to consider savings accounts, bonds, stocks, and similar sources of financing. Courts in California, Virginia, Wisconsin, and North Carolina regard savings as part of the standard of living, but courts in Hawaii and Florida do not.
You can find online calculators for alimony payments that can provide you with a rough estimate. Ultimately, it’s up to the court to calculate the amount, as there are no set formulas for calculating alimony payments.
If a spouse has to pay for child support, the court will consider that too when making a ruling on the alimony amount.
Types of Alimony
Alimony types differ from state to state. For instance, let’s take a look at the state of California, which has five types of alimony:
Temporary - Awarded to a spouse during the divorce process. It stops once the divorce is finalized.
Permanent - It’s awarded to the lower-earning spouse and is paid monthly until death or until the alimony-receiving spouse remarries.
Lump sum - If the spouse doesn’t want any property from their marital assets, the court can order a lump sum to be paid.
Reimbursement - If one of the spouses supported the other during studies, starting their own business, or anything else that improved the spouse's financial position, the court may order reimbursement alimony to the spouse who invested in them during that time.
Rehabilitative - If the spouse can’t work during a certain period due to ongoing training or a temporary medical problem, the court can order rehabilitative alimony to be paid until the spouse becomes self-sufficient again.
What Is the Difference Between Alimony and Spousal Support?
There is no difference between alimony and spousal support - they are the same thing.
Alimony is an older and more traditional term, whereas spousal support is a gender-neutral term used by many courts. Please note that in some state codes financial support following a divorce is still called alimony.
Alimony vs. Child Support
There is a difference between alimony and child support. Whereas alimony is paid to maintain a spouse’s standard of living, child support is paid separately to the child custodian to maintain a child's standard of living. As per child custody statistics, custodial parents received an average of $3,431 annually in child support in 2017.
What Is Alimony Income, and How Is Alimony Taxed?
Alimony income is court-ordered financial support from the ex-spouse. How it is taxed depends on when the divorce agreement was executed. If it happened before December 31, 2018, the ex-spouse receiving alimony payments has to report it as income. The ex-spouse paying the alimony could declare it as a deductible expense.
After the Tax Cuts and Jobs Act of 2017, the ex-spouse paying the alimony couldn’t declare it as deductible, and the receiving ex-spouse didn’t owe any federal tax on this payment.
What To Do When Alimony Is Not Being Paid
There are a couple of things you can do if your spouse is not sending alimony checks. You can, in good faith, try to find out why this has occurred. If the spouse is incapacitated due to a medical condition or because they lost a job, you can work out an agreement to lower or suspend alimony checks until the ex-spouse can stand on their feet again.
Conversely, if you discover that the payments are being withheld on purpose, you’ll have to take your case to court. If proven that the ex-spouse is in contempt of court, the judge will order all due payments to be settled and may include additional fines. If they refuse, the court can take further action that may even include jail time.
The court can also ask the ex-spouse’s employer to withhold a portion of their income and send it as an alimony payment. That way, the ex-spouse is completely cut out of the process, and doesn't get a say. If none of the above approaches brings results, the court can order the seizing of the debtor’s property or any other assets to settle the debt.
If you are considering filing for divorce but are financially dependent on your spouse, you should take into consideration that marriage is a sort of investment. Even though one spouse may be financially worse off than the other right now, they might have put in substantial effort, time, and money during prior stages of wedlock. This is one of the reasons they are entitled to alimony. By providing documentation about the contributions you’ve made during the course of the marriage, you can be confident that you won’t be left to your own devices after its dissolution. But you have to make the first step and ask for a divorce.