Alimony is a financial support paid to the spouse who is financially disadvantaged after a divorce. There are three types of alimony: periodic alimony, lump-sum alimony, and rehabilitative alimony.
Periodic Alimony
Periodic alimony is when the court orders one spouse, often the husband, to pay a fixed amount, such as $2,000 per month, to the other spouse (usually the wife) until either spouse dies or the recipient remarries.
- Duration: Indefinite, with the possibility of termination upon remarriage or death. Cohabitation with someone of the opposite sex can also end periodic alimony.
- Modification: Periodic alimony can be adjusted (increased, decreased, or terminated) due to significant changes in circumstances.
- Tax Consequences: The payer can deduct the payments, and the recipient must pay taxes on them.
Lump-Sum Alimony
Lump-sum alimony involves a one-time payment or a series of payments over a set period. For example, a court may order $50,000 to be paid in installments of $10,000 per month for five months.
- Duration: The payments are made over a specific period and can be either a lump sum or installments.
- Modification: Lump-sum alimony is not subject to modification and is considered a contractual obligation.
- Tax Consequences: Whether the lump sum is deductible or taxable depends on how it is categorized (e.g., as part of a settlement or specifically as alimony).
Rehabilitative Alimony
This form of alimony is designed to help the disadvantaged spouse regain financial independence by providing temporary support for a defined period. For example, the court might order a spouse to pay $1,000 per month for 36 months.
- Duration: For a specified period, typically until the recipient is able to financially support themselves.
- Modification: Ends upon the recipient’s death or remarriage. It can also be modified if rehabilitation efforts fail despite reasonable attempts.
- Tax Consequences: Like periodic alimony, rehabilitative alimony is deductible by the payer and taxable to the recipient.
- Purpose: The goal is to assist the spouse in regaining their earning potential, especially if they sacrificed a career for family duties during the marriage.
Factors for Determining Alimony
The court will consider several factors when deciding on alimony, including:
- The financial resources and earning potential of the spouse requesting support, including other parts of the divorce settlement such as property division and child support.
- The couple’s standard of living during the marriage.
- How long it will take for the disadvantaged spouse to obtain employment or complete necessary education or training.
- The ages and health of both parties, including physical and mental health.
- The balance between the disadvantaged spouse’s needs and the paying spouse’s ability to provide.
- The physical condition of each party, considering any disabilities or chronic health issues.
Considerations for Awarding Alimony
The primary factors considered when awarding alimony are the need of the disadvantaged spouse and the ability of the other spouse to pay. Fault is typically not considered when dividing property, though it may be relevant in alimony cases if one spouse has squandered marital assets.
Modification of Alimony
To modify alimony, there needs to be proof of significant and continuous changes in circumstances, such as remarriage, death, cohabitation, or even retirement.
Alimony Pendente Lite
This is a temporary form of alimony granted to assist the disadvantaged spouse with the costs of divorce proceedings. It ends once the divorce case is concluded and is not affected by cohabitation.
Changes to Alimony Pendente Lite
For couples with a combined net monthly income above $30,000, a different formula may apply. Courts will calculate the amount based on the income disparity, while considering whether minor children are involved and the length of the marriage.
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