Divorce Help 101
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Alimony
Simply put, alimony is a payment one spouse, or former spouse makes to the other. There are different kinds of alimony that can continue for different durations. As well, alimony, or spousal support, is not automatically an issue in every marriage.
Historically it was frequently the husband who, when divorcee, would be required to support his wife; however, alimony is no longer the sole concern of divorcing husbands. As equality between the sexes has progressed so has the law related to alimony. Presently it is not unheard of for a wife, who was the primary breadwinner, to have an alimony obligation to her husband.
Different states consider different factors in determining alimony, but as the basis of an alimony obligation the courts will consider points such as the length of the marriage, the income of the parties, the future wage earning ability of the parties, other property received in any settlement or divorce award, other assets available to the parties and other factors. In some states the courts will consider the fault of a party in the breakup of a marriage in determining an award of alimony; however, in “no-fault” states the courts will not consider such evidence.
Perhaps the most important point for parties going through a divorce to consider is that alimony is not automatically guaranteed. Generally if one spouse is either employed or capable of employment, particularly at an income level that is consistent (perhaps not even equal to) that of their spouse, then the likelihood of their receiving alimony is diminished.
Alimony can also have significant tax implications for both the spouse paying the alimony and the spouse receiving the alimony. The applicable tax laws and regulations generally allow for alimony to be deducted by the spouse paying the alimony and require the alimony payments to be claimed as income by the spouse receiving the alimony or support payments. In essence the paying spouse will recoup some of his payments at tax time by way of refund or at least by being able to claim them as deductions. The spouse receiving the alimony payments will have to pay taxes on the funds received when it comes tax time.
It should also be noted that alimony can come in several different forms. The form most people equate with traditional alimony is what is known as “ongoing” or “permanent, periodic” support. This means that the obligation continues until the death of the payor or payee, sometimes the remarriage of the payee, or as a matter of law meaning that some provision of applicable state law is met allowing the termination of the obligation.
There are other forms of alimony such as rehabilitative alimony which is a certain amount of alimony paid over a period of time meant to help the transition from married life. Lump sum alimony is just as it sounds, a specific lump sum of alimony that is generally made in one or several payments. Alimony can also be paid to help a divorcing spouse gain skills or an education.
If alimony is ordered it will likely be a set obligation payable each month. However, if the parties resolve the issue between themselves, it may be possible to address the entitlement to the obligation but have the ultimate resolution avoid any ongoing support payments. For instance if a spouse has a monthly obligation it may be possible to reduce the total obligation to a discounted and fixed amount through the use of life expectancy tables and present day values to allow for other assets to be shifted from one spouse to the other in lieu of direct payments.
Alimony cannot be discharged in bankruptcy. The United States bankruptcy laws and regulations allow for support obligations such as alimony or child support to receive priority above even taxes. While it may be necessary to file a claim, these payments can be protected from discharge.
As with other types of support payments such as child support, it is possible for the alimony to be paid through the court to ensure that payments are made in a timely fashion.
Disclaimer
Historically it was frequently the husband who, when divorcee, would be required to support his wife; however, alimony is no longer the sole concern of divorcing husbands. As equality between the sexes has progressed so has the law related to alimony. Presently it is not unheard of for a wife, who was the primary breadwinner, to have an alimony obligation to her husband.
Different states consider different factors in determining alimony, but as the basis of an alimony obligation the courts will consider points such as the length of the marriage, the income of the parties, the future wage earning ability of the parties, other property received in any settlement or divorce award, other assets available to the parties and other factors. In some states the courts will consider the fault of a party in the breakup of a marriage in determining an award of alimony; however, in “no-fault” states the courts will not consider such evidence.
Perhaps the most important point for parties going through a divorce to consider is that alimony is not automatically guaranteed. Generally if one spouse is either employed or capable of employment, particularly at an income level that is consistent (perhaps not even equal to) that of their spouse, then the likelihood of their receiving alimony is diminished.
Alimony can also have significant tax implications for both the spouse paying the alimony and the spouse receiving the alimony. The applicable tax laws and regulations generally allow for alimony to be deducted by the spouse paying the alimony and require the alimony payments to be claimed as income by the spouse receiving the alimony or support payments. In essence the paying spouse will recoup some of his payments at tax time by way of refund or at least by being able to claim them as deductions. The spouse receiving the alimony payments will have to pay taxes on the funds received when it comes tax time.
It should also be noted that alimony can come in several different forms. The form most people equate with traditional alimony is what is known as “ongoing” or “permanent, periodic” support. This means that the obligation continues until the death of the payor or payee, sometimes the remarriage of the payee, or as a matter of law meaning that some provision of applicable state law is met allowing the termination of the obligation.
There are other forms of alimony such as rehabilitative alimony which is a certain amount of alimony paid over a period of time meant to help the transition from married life. Lump sum alimony is just as it sounds, a specific lump sum of alimony that is generally made in one or several payments. Alimony can also be paid to help a divorcing spouse gain skills or an education.
If alimony is ordered it will likely be a set obligation payable each month. However, if the parties resolve the issue between themselves, it may be possible to address the entitlement to the obligation but have the ultimate resolution avoid any ongoing support payments. For instance if a spouse has a monthly obligation it may be possible to reduce the total obligation to a discounted and fixed amount through the use of life expectancy tables and present day values to allow for other assets to be shifted from one spouse to the other in lieu of direct payments.
Alimony cannot be discharged in bankruptcy. The United States bankruptcy laws and regulations allow for support obligations such as alimony or child support to receive priority above even taxes. While it may be necessary to file a claim, these payments can be protected from discharge.
As with other types of support payments such as child support, it is possible for the alimony to be paid through the court to ensure that payments are made in a timely fashion.
Disclaimer
