Spousal Maintenance (alimony) is a payment of money from one spouse to another that occurs on a periodic basis (often monthly). Commonly, spousal maintenance is a tool to assist a financially disadvantaged spouse, but it is a flexible tool that may be used for many purposes, including to:
- Help one or both spouses have better financial futures considering their unique financial circumstances;
- Provide resources so a spouse can obtain the education, training and experience to enter the workforce at an appropriate level;
- Compensate a spouse for lost financial or career opportunities;
- Assist a spouse during a transitional period;
- Create more income for one or both households due to tax planning;
- Address inequities in financial resources and opportunities if property is insufficient.
The amount and duration of spousal maintenance is commonly addressed in mediation. Good budgets and a detailed analysis of current and expected financial circumstances are usually important for reaching an agreement that is both informed and realistic, to ensure that everyone can pay their bills and financial concerns are fully addressed. There may be a discussion about the balance between meeting financial responsibilities and reaching financial independence based on your specific circumstances. Because the financial circumstances of each situation is unique, there is no cookie-cutter approach.
Similarly, in court there is also no formula for the amount or the duration of spousal maintenance. There is no “typical” award for spousal maintenance. Instead, when a court determines spousal maintenance, the court is required to weigh of factors that include:
1. The financial resources of the party seeking maintenance;
2. The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find employment appropriate to his/her skill, interests, style of life, and other attendant circumstances;
3. The standard of living established during the marriage;
4. The duration of the marriage;
5. The age, physical and emotional condition, and financial obligations of the spouse seeking maintenance; and
6. The ability of the spouse from whom maintenance is sought to meet his/her needs and financial obligations while meeting those of the spouse seeking maintenance.
Any other factor that could bear on the financial circumstances of each spouse must be considered by a court. These might include considering the property that each spouse will be left with, the financial obligations of each spouse, the viability of a spouse improving his/her income in the future, and more. Based on all these factors, a court is then to exercise its discretion in the amount and duration of maintenance.
Prior to 1/1/2019, spousal maintenance was often used as a tax planning tool to make more after-tax funds available to support two households after divorce. That tool may still be available for divorces where there was a signed divorce or separation instrument (agreement or court order) prior to that date, including modifications of maintenance for those divorces. In those situations, so long as tax law requirements are carefully followed, spousal maintenance can be tax-deductible to the payor-spouse and taxable income to the recipient-spouse. If the payor has a higher tax bracket than the recipient, some tax savings can be realized, which may help ease the budgetary pressures that often exist after divorce. However, otherwise this option is no longer available. There may be other tax planning possibilities, however, based on your individual circumstances.