Alimony refers to payments made to the spouse who is financially disadvantaged after a divorce. There are three main types of alimony: periodic, lump sum, and rehabilitative.
- Periodic Alimony: Periodic alimony requires the paying spouse (usually the husband) to provide regular payments, such as $2,000 per month, to the recipient until their death or remarriage. This type of alimony lasts indefinitely and may be modified under certain circumstances, such as changes in the recipient’s life or unexpected financial changes. It also ends if the recipient cohabits with someone of the opposite sex. For tax purposes, periodic alimony is deductible for the payer and taxable for the recipient.
- Lump-Sum Alimony: Lump-sum alimony involves a one-time payment, like $50,000 paid in installments over several months. This alimony type has a defined duration and cannot be modified after the court’s decision. Tax treatment depends on whether the payment is explicitly classified as alimony.
- Rehabilitative Alimony: This is the most common form of alimony and is designed to help the recipient regain the ability to support themselves. For example, a court may order $1,000 per month for 36 months to aid the recipient’s career recovery. It has a set duration and ends if the recipient remarries or cohabits. If rehabilitation efforts fail, the alimony may be adjusted. Like periodic alimony, it is tax-deductible for the payer and taxable for the recipient.
Factors for Determining Alimony: When deciding on alimony, the court considers several factors, such as the spouse’s financial situation, earning potential, living standards during the marriage, and the time it will take for the disadvantaged spouse to achieve financial independence. The health of both spouses and the division of other assets like property and child support also plays a role.
Considerations for Awarding Alimony: The court primarily evaluates the need of the spouse requesting support and the paying spouse’s ability to make payments. While fault may sometimes be considered when awarding alimony, it is not a common factor in property division, unless one spouse has misused marital assets.
Alimony Pendente Lite: This special type of alimony helps a spouse pay for divorce-related expenses before the divorce is finalized. It ends once the divorce proceedings conclude and is not impacted by cohabitation. For high-income couples (with combined monthly income over $30,000), there are specific rules to calculate alimony pendente lite.
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