Common methods for calculating spousal support typically take up to 40% of the paying spouse’s net income, which is calculated after child support. 50% of the recipient spouse’s net income is then subtracted from the total if he or she is working. Spousal support amounts should be agreed to by both parties and can be waived by the recipient spouse. When we talk about spousal maintenance, support, and alimony we are talking about the same thing. Although spousal support is not mandatory in most states, it can be mandated by a judge depending on certain conditions, in particular:
How Long Have You Been Married?
Unless there is a valid prenuptial agreement that provides a separate agreement for alimony, in a marriage of only few years, any kind of long duration alimony award would be highly unusual. In general, divorcing spouses can expect that alimony in a marriage of only a few years will be very limited, or not granted at all in the case of a brief marriage of two earners of around the same income level.
The longer the marriage, the greater the spousal support. Courts generally look more seriously at cases of couples who have been together at least a decade. Although the exact formula varies state by state (and case by case), in many states the number of years alimony is required to be paid cannot exceed the number of years the couple was married for, in marriages under 20 years in duration.
Do You Have a Variable Income?
In some jobs, what you make in a year goes up and down. A contractor, for instance, might build a bunch of homes one year, but very few the next. If your income changes year to year, the courts will likely take a five-year average to figure out what you make and what you may owe.
Does Your Spouse Work?
If your spouse quit their job when you got married, some courts may require you to cover job retraining costs to help with re-entry into the workforce. This is called rehabilitative alimony. Even in a brief marriage, if your wife stepped back from a very competitive field to be a stay-at-home spouse, some kind of job retraining might be needed.
Do You Have Young Kids?
In a short marriage, a stay-at-home spouse’s “income” may be calculated as if she worked 40 hours a week at a minimum wage job. In other words, this is the minimum she could be expected to make if she had to go out and get a job due to the divorce. On the other hand, if you have super-young kids, the courts will take this into consideration as why a spouse is unable to get a basic job, and adjust the calculations accordingly. The reasoning: There is little reason for one spouse to go out and get a minimum wage job, only to then have to pay for a caretaker to watch the kids.
Did You Lose Your Job?
Let’s just get this out of the way: You cannot quit your job, move back in with your mom, and claim zero income. Nor can you decide to “retire” at the age of 40 and hope the courts reconsider the monthly alimony. However, if the paying spouse loses his job or sees a decline in his business, he can go to court to file for a modification of his alimony obligation based on changed financial circumstances.
Finally, although the most common set-up has one spouse forking over money to the other in the form of monthly checks, it is possible to negotiate other types of payment. For instance, you might offer to buy your ex out of her half of the house or consider a redistribution of material goods like the family cars and maybe the private jet. Sometimes, these arrangements allow for a cleaner break, and that’s good for the whole family.
If One Spouse Will Face Hardships Without Financial Support
Court ordered spousal support is enforced if there is sufficient need to maintain his or her standard of living. The courts recognize both husband and wife are entitled to live at the level they enjoyed during marriage. It’s important to keep track of alimony as there are implications to be aware of when filing taxes after divorce.
When isn’t Spousal Support Considered?
The presiding judge is unlikely to force alimony under the following conditions:
• Marriage of less than two or three years
• Both spouses are employed and self-sufficient
How to Negotiate a Fair Alimony Settlement with Your Spouse
When it comes to alimony settlements, you only appear in front of a judge if you and your spouse can’t reach an agreement. You should give negotiation a try as it’s a lot less expensive than going to divorce court, and you won’t be leaving important decisions about your life to the judge. You can work with your divorce lawyer to help you understand the factors that the judge would consider before you start negotiating with your spouse about alimony. Today, Ascent Law shares general ways to negotiate a fair alimony settlement with your spouse.
Start With Your Needs
To negotiate a fair alimony settlement, focus on your needs first. Look at the difference between your expenses and your income this will guide how much alimony support to ask for. You’ll be required to prepare a monthly income and expense disclosure so it’s a great place to start.
If you’re the person getting support, once you’ve settled on an alimony settlement, you may want to include a provision for increasing the amount each year as a cost of living adjustment (COLA). These adjustments may be based on the national or a local index, or you can assume the annual increase based on a percentage. Keep in mind, there’s no standard formula, all you can do is decide what you think you need and ask for it at the beginning of the alimony negotiations process. If you need help, contact our experienced Salt Lake divorce attorneys.
Understand Your Spouse’s Resources
All assets and income need to be considered for both parties and all information should be disclosed in the forms that you’re both required to fill out. If financial information is missing then your lawyer can use discovery methods to get the additional information that’s needed.
To help negotiate a fair alimony settlement, you’ll need to know about:
• Your spouse’s separate assets (you’re entitled to know their value).
• Detailed income and expense report that shows you where your spouse’s money is going and what separate liquid assets are available for daily expenses.
• Bonuses, overtime, and employment benefits & stocks. Income comes from these places too! If your spouse regularly receives a bonus or overtime pay, you can use the average to help determine your alimony. Stock options and the value of benefits like unused vacation time should also be factored in your alimony settlement.
Be Flexible & Look for a Win-Win
Don’t draw a line in the sand when it comes to negotiations. Look for the win-win solution, whether there’s an equitable distribution or not. If you come to the alimony settlement table and are unwilling to negotiate, you can quickly create a stalemate. This only leads to increased tensions and a (costly) drawn-out divorce case.
Take Control Of Your Own Emotions
Throughout the divorce process, you have to keep your emotions in check. Alimony negotiations are hard enough as it is, so you don’t want the other party to take advantage of your emotional state. Losing control of your emotions may also lead to the breakdown in alimony settlement negotiations altogether.
Contact A Divorce Lawyer
Negotiating alimony may be difficult and you should hire an attorney who understands the process and will work to get the amount you deserve. We don’t recommend that you try to settle alimony payments yourself, or risk being disappointed with the outcome.
Why Gross Income Is Used to Calculate Alimony
When a couple divorces, several things need to be considered. If the couple are raising minor children, they need to decide on custody arrangements and child support payments. The assets acquired during the marriage need to be divided between the two spouses. In some divorces, one spouse pays alimony to the other. The court uses the paying spouse’s gross income to calculate the amount of alimony payments.
Tips For Alimony
Gross income is used as a standard of measure for alimony payments due to the fact that an individual could manipulate the basis for alimony payments through excessive deductions. This, in turn, would create an artificially lowered net income.
Evaluating Gross Income
Gross income refers to the total income earned by an individual. This includes wages, self-employment income or investment earnings. Any deductions from gross income, such as taxes, insurance or retirement contributions are used to calculate the net income. Gross income remains unchanged.
Assessing Standard of Living
Throughout the marriage, the couple experienced a particular standard of living. Divorce leaves the nonworking spouse with little income to maintain that standard of living. Alimony serves to help the spouse maintain a comparable standard of living. Alimony calculation uses gross income because this represents the standard of living the parties lived prior to the divorce.
Identifying Optional Deductions
The alimony calculation uses gross income because many deductions from gross pay are optional. Retirement contributions, savings plans or stock purchase plans all represent deductions employees make from gross income. The individual decides whether to make these deductions and how much to deduct. These deductions are optional and the employee could potentially manipulate the income amount by deducing the entire amount. The court calculates alimony using gross income to prevent the individual from manipulating the basis for the alimony payments. Additionally, if a paying spouse’s taxes or benefits change and more is taken out, the receiving spouse won’t be penalized for something that is outside her control.
Tax Liability Transfers
The tax liability for the alimony payment transfers to the recipient. The taxable income of the payer decreases by the amount of alimony paid. The court uses gross income to calculate the alimony payment because this correlates with the income measurement used for the tax calculation.
How a Judge Decides the Alimony Amount
In comparison to child custody cases—in which judges must decide which parent a child is going to live with deciding on an alimony amount is a piece of cake. Every state has a law dictating what factors must be considered in setting alimony.
Basically, in setting the amount of alimony to be paid, courts look at:
• How much money each person could reasonably earn every month
• What the reasonable expenses are going to be for each of them, and
• Whether an alimony award from one to the other would make it possible for each to go forward with a lifestyle somewhat close to what the couple had before they split—known in divorce law as “the standard of living established during the marriage.”
As is frequently the case, if there isn’t enough money to make it possible for the parties to reestablish something close to their marital standard of living, then most judges will look for a way to make the divorcing parties share the financial pain equally.
Example: Here’s how the math works out in a typical alimony case. Imagine that a husband who files for divorce earns $5,000 a month. His wife stays at home with three young children and earns no income. Under their state’s formula, she’s entitled to $1,650 child support per month. But say she convinces the judge that her total rock bottom needs, including a house payment, are $2,300. If the judge is convinced her budget is solid and that her husband can afford it, she would be awarded $650 in spousal support: $2,300 minus $1,650.
Are Savings Included in a Standard of Living?
In many states, the law specifies that in setting alimony, the judge should consider how much support it would take each party “to maintain the standard of living established during the marriage.” This can raise questions about how a court should set and evaluate a particular standard within the “standard of living.”
For example, consider the married couple who agreed that it was important to put a generous slice of their income in a savings account. Now that they are getting divorced, should that practice be considered a part of their standard of living?
The bottom line: The courts in your state may or may not have taken a stand on this and many similar questions. There is plenty of room for disagreement. Find out your state’s position, either through a lawyer or on your own. Depending on what you find, it may be a good idea to retain an experienced family law specialist to represent you.
Free Consultation About Alimony
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506