Alimony is financial support provided to the spouse who is financially disadvantaged. There are three types of alimony: (1) periodic alimony, (2) lump sum alimony, and (3) rehabilitative alimony.
Periodic Alimony: Periodic alimony involves regular payments ordered by the court, such as $2,000 per month, from the husband to the wife, continuing until her death or remarriage.
- Duration: The payments are indefinite.
- Modification: Periodic alimony ends automatically upon the recipient’s death or remarriage, with a presumption of termination if the recipient cohabits with someone of the opposite sex. Payments can be modified based on significant changes in circumstances.
- Tax Implications: The payer can deduct periodic alimony, while the recipient must report it as taxable income.
Lump-Sum Alimony: Lump-sum alimony is a one-time payment, often used to fully sever financial ties. For example, the court may order the husband to pay $50,000, with $10,000 paid over five months.
- Duration: The duration is fixed, either in installments or as a single payment.
- Modification: Once determined, lump-sum alimony is non-modifiable, and it’s treated as a contract right.
- Tax Implications: Whether the payment is deductible for the payer or taxable for the recipient depends on whether the payment is explicitly designated as alimony.
Rehabilitative Alimony: Rehabilitative alimony is the most commonly awarded type of alimony, aimed at assisting the spouse in regaining financial independence. For instance, the court might order the husband to pay $1,000 monthly for 36 months to the wife.
- Duration: The payments are for a specified period.
- Modification: Rehabilitative alimony ends automatically upon the recipient’s death or remarriage. It can be increased or decreased if efforts toward financial independence have failed.
- Tax Implications: The payer can deduct the amount, and the recipient must report it as taxable income.
- Purpose: This form of alimony helps the disadvantaged spouse regain the ability to earn, especially if they sacrificed their career during the marriage. The goal is to improve their position to the point where they are no longer financially dependent on the other spouse.
Factors for Determining Alimony: The court will consider the following factors when determining alimony:
- The financial resources and earning potential of the spouse seeking support, along with their share of the divorce settlement (including property and child support).
- The standard of living the couple maintained during their marriage.
- How long it will take the disadvantaged spouse to gain employment or complete necessary education or training.
- The parties’ ages and health, including any physical or mental health concerns.
- The balance between the disadvantaged spouse’s needs and the other spouse’s ability to pay.
- The physical condition of each spouse, considering disabilities or chronic diseases.
Considerations for Awarding Alimony: The court focuses on two primary considerations when awarding alimony: (1) the financial need of the disadvantaged spouse and (2) the paying spouse’s ability to pay. Fault may be considered in awarding alimony, but it typically does not influence the division of property, unless one spouse wasted marital assets.
Wage assignments may be imposed to ensure alimony payments are made, and modifications to alimony generally require proof of significant and continuing changes in circumstances, such as remarriage, cohabitation, or retirement.
Alimony Pendente Lite: Alimony pendente lite is a temporary form of support designed to assist the disadvantaged spouse during the divorce process. It ends when the divorce proceedings are concluded and is not affected by cohabitation.
Changes to Alimony Pendente Lite:
If the couple’s combined net monthly income exceeds $30,000, the court applies a specific formula for alimony calculations, taking into account the income difference and any child support obligations. The duration of alimony also reflects the length of the marriage.
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