How Do Courts Determine Alimony?

Will you pay or receive alimony?

Will you pay or receive alimony?
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Determining the role alimony plays in a divorce requires several considerations. Providing spousal support requires the court objectively looking at both parties' needs, incomes, and earning potentials.

The first consideration when settling a spouse’s alimony obligation would be the ability to pay alimony. The courts determine alimony by first looking at the spouse's gross income and reducing it by subtracting all mandatory deductions to come up with the net income.

Mandatory deductions are things like income taxes, social security, and healthcare. The courts do not consider things like union dues or work-related social dues as mandatory, and will not deduct them from the gross salary. 

For example, if a spouse makes $4,000 per month, and income tax, Social Security, unemployment insurance benefits and other government deductions reduce their income to $3,500, this is their net income. The fact $300 more is withheld to pay a car loan does not further reduce their net income when figuring their ability to pay alimony.

The law accords support payments a higher priority than other types of debts, and would rather see other debts not paid than have a spouse go without adequate support.

A Spouse's Ability to Earn When Determining Alimony

Both spouses' ability to earn is taken into consideration when determining if alimony will be paid. The courts not only consider what a spouse actually earns, but also what the potential for earning is by that spouse. 

For example, if a spouse was a pediatrician making an annual income of $175,000 a year for four years, and she quit her job after filing for divorce and became a pre-school teacher at an annual income of $18,000 a year, her higher income earning potential would be taken into account. 

During her divorce from her spouse, the court could impose a larger amount of alimony to her spouse than she could afford to pay on her earnings of $18,000 a year. The court determined, based on her earning potential as a pediatrician, that she could return to that work to meet her alimony obligation. In most states, the court will not penalize the spouse with a lower alimony award because she chose to take a job with a smaller salary. 

Ability of Spouse to Self-Support and Alimony

Whether or not a spouse has marketable work skills and is able to work outside the home is something else the courts take into consideration. Having custody of pre-school-aged children and no access to daycare could make it impossible for a spouse to work outside the home.

The ability to self-support differs from actually being self-supporting. If a spouse has marketable skills but refuses to look for work, the court is likely to limit the amount of alimony and the length of alimony due to the refusal to work.

In many states, no alimony is awarded if both spouses are able to support themselves. If one spouse was dependent on the other during the duration of the marriage, that spouse is often awarded alimony for a rehabilitative period. This could be a time period lasting anywhere from several months to several years.

If a spouse becomes self-supporting before the end of the court-ordered support period, the paying spouse can petition for the courts to terminate the alimony. If, however, the spouse is unable to become self-supporting during the allotted time, they may also petition the courts for an extension of alimony. In some states, this can only be done to keep the spouse from going on welfare.

Standard of Living During Marriage and Alimony

When a court sets alimony, it often considers the standard of living during the marriage and tries to maintain this standard for both spouses where possible. Maintenance of a standard of living is more of a goal when it comes to alimony than a guarantee.

For instance, if only one spouse worked outside the home during the marriage, it would be impossible for that one spouse to be expected to maintain the "standard of living" for both spouses after a divorce. In such a situation, the spouse who had not worked outside the home would be awarded reasonable alimony and would also be expected to find a job in order to help maintain their standard of living. 

How the Length of Marriage Impacts Alimony

If a marriage is relatively short, and there are no children, the courts often refuse to award alimony. If there are children under school age, however, the courts often award alimony to the spouse who is given physical custody. Most courts feel that a child under school age is better served by having a full-time parent at home instead of out in the workforce.

Tax Consequences of the Alimony

For federal income tax purposes, alimony paid under a written court order is deductible by the spouse who pays and is taxable to the recipient of the alimony. Child support, on the other hand, is tax-free to the recipient and not deductible by the spouse who pays.

How Marital Debt Impacts Alimony

At the time of divorce, the court allocates debt incurred during the marriage between the spouses based on who benefits most from the asset that came with the debt. If the court orders a spouse to pay a large portion o the marital debts, it often reduces the amount of alimony that the spouse is ordered to pay.

Helping a Spouse Earn a Degree and Its Impact on Alimony

Courts will not only take into consideration the amount of financial support given during a marriage, but also the amount of emotional support. If a spouse worked and supported the other spouse through school, some states will take this into consideration. The spouse could ask for and receive compensation in the form of alimony for all the years he/she worked why the other was in school.

How Prenuptial Agreements Impact Alimony

Before marrying the couple could have drawn up a prenuptial agreement stating how things like alimony would be paid if there was a divorce. Most prenuptial agreements hold up in court at the time of a divorce unless it can be proven that a spouse signed under duress or fraudulently.

A final decree of divorce will state how much alimony was awarded, the termination date for the alimony and whether or not the alimony is modifiable