Business, Legal & Accounting Glossary
Payment that a family court may order one person in a couple to make to the other person when that couple separates or divorces.
n. support paid by one ex-spouse to the other as ordered by a court in a divorce (dissolution) case. Alimony is also called “spousal support” in California and some other states. Usually it is paid by the male to his ex, but in some cases a wealthy woman may have to pay her husband, or, in same-sex relationships the “breadwinner” may pay to support his/her stay-at-home former partner. Many counties and states have adopted formulas for alimony based on the income of each party. Payment of alimony is usually limited in time based on the number of years of marriage. Lengthy marriages may result in a lifetime of payments. A substantial change in circumstance, such as illness, retirement, or loss of income, can be grounds for the court to grant a modification or termination of the payment. Failure to pay ordered alimony can result in contempt of court citations and even jail time. The level of alimony can be determined by written agreement and submitted to the court for a stipulated order. Income tax-wise, alimony is deductible as an expense for the payer and charged as income to the recipient. Child support is not alimony.
The purpose of alimony is to avoid any unfair economic consequences of a divorce, even after the property is divided and child support, if any, is awarded. Courts set few specific guidelines to attaining this broad goal: instead of telling judges how and when to award alimony, most courts simply grant them broad discretion to decide what is fair in each case.
For example, suppose two individuals who married in 1985 agree in 1995 to divorce. At the time of the divorce, the husband earns $63,000 a year, after seven years at a large company where the top pay for his specialty is $80,000. When the couple married, he was in graduate school and the wife was earning $22,000. The wife worked for three more years, supporting the husband while he completed his coursework and graduated.
When their first child was born, they agreed that the wife would care for the child at home. At the time of divorce, the wife had been working full-time for one year since the couple’s children, ages seven and six, had entered school. She was earning $23,000 a year and would have custody of the children.
A judge, in this case, would certainly award child support and would probably divide marital property equally between the couple. But it might not seem fair to the judge to allow the husband to leave the marriage with the sole possession of the couple’s most valuable asset—his earning potential—when the wife contributed to his education by supporting him.
Unlike the family’s home or station wagon, the husband’s earning power has not yet reached its full value, but it promises to grow. It seems especially unfair for the wife not to receive a share of it since after helping the husband attain his education she agreed to forfeit her earning power to invest time in the family. The several years she spent out of the workforce continue to handicap her earnings. Alimony is the only means available to the court to avoid a potentially unjust division of assets.
The judge, in this case, may award alimony or may award a token amount—such as $1 a year—so that the wife has the option to request an increase later on (modifying an award is easier than winning one after the divorce). Or the judge may award no alimony; judges are not required to award alimony.
The husband and wife in this example are unlikely to find a single solution they both consider equitable. In trying to reach an order that is fair, judges must balance spouses’ contributions and sacrifices during the marriage with their needs after the divorce. Although the result may not match both spouses’ ideas of what is fair, one of alimony’s biggest virtues is its flexibility: it can always be changed.
Alimony can be modified or eliminated as the former spouses’ needs change, if those needs are the result of decisions they made as a married unit. Awards and increases in alimony are meant to address only needs that are caused by the divorce itself, not unrelated needs. If the wife’s elderly mother becomes ill and dependent on her after the divorce, for example, the wife’s need increases, but the increase is unrelated to the divorce and will not increase her eligibility for alimony. However, a significant change in circumstances—such as a rise in the recipient’s income or a drop in the payer’s income—can cause the court to reduce or end alimony. Occasionally, courts increase alimony to keep up with inflation.
Many courts have indicated that situations such as maltreatment are not valid triggers for alimony. Courts have clarified that allegations of physical or other harm done by one spouse must be brought in a civil lawsuit, to be heard and decided by a jury. In successful cases, compensatory and punitive damages would be awarded, not alimony.
Even in less egregious cases, alimony is not awarded as a punishment, especially in states that have adopted no-fault divorce laws—that is, laws providing that neither spouse has to prove wrongdoing on the part of the other.
Gaps in earning power that tend in general to favor men over women create another situation that many courts believe they cannot resolve using alimony. Such gaps are often the reason married couples decide that if it is appropriate for only one spouse to be the wage earner, it should be the husband. But courts do not base individual alimony awards on this trend alone, in part because an individual spouse cannot be held responsible for social injustices.
In fact, state laws specifying the gender of the paying spouse and of the receiving spouse have been ruled unconstitutional. In deciding Orr v. Orr 440 U.S. 268, 99 S. Ct. 1102, 59 L. Ed. 2d 306 (1979), the U.S. Supreme Court ruled that Alabama state law, which specified that husbands may be ordered to pay support to wives, but not vice versa, violated the Equal Protection Clause of the Fourteenth Amendment. The case arose when William Orr, who had been ordered to pay alimony, was taken to court by his ex-wife for failure to pay. Orr’s defense included a motion requesting that the Alabama alimony statute be declared unconstitutional. Although Orr was not seeking alimony from his ex-wife, he argued that the award to her would decrease if his circumstances were considered in addition to hers. The Supreme Court decision supporting Orr meant that gender could not be considered in awarding alimony (although even in the 1990s very few alimony awards are made in favor of men).
Modern underpinnings for alimony have little to do with gender, but this was not always so. The U.S. model of alimony is based on ecclesiastical law (guidelines of the Christian religion), dating from a time in England’s history when divorce did not exist. Unhappily married couples could live separately, but the husband was still obliged to support the wife financially. This arrangement was known as a divorce a mensa et thoro (“from bed and board,” in Latin), and was not really a termination of the marriage. This limited divorce did not allow the parties to remarry, for example, and did not affect inheritance rules. The wife remained her husband’s dependent, and alimony was seen as his ongoing marital obligation to her.
When full divorce became available, the idea of alimony continued, but with some important differences. In the early 2000s, alimony awards were being made based not on men’s and women’s roles, but on relative needs arising from decisions made during the marriage. Alimony is not an aspect of marriage, as it was in divorce a mensa et thoro, but only becomes necessary—and available—from the time of divorce. Because the considerations that enter into a divorce award are sometimes complex, courts usually clarify the award’s purpose and may place a time limit on it.
On September 1, 1995, Texas became the last state in the country to authorize the award of alimony payments in divorce proceedings. TX FAMILY § 8.001. Until then, Texas courts had ruled that the state constitution prohibited alimony awards because alimony was not marital property existing at the time of the divorce. Instead, Texas courts said that alimony awards necessarily involved calculations based solely on the future, post-divorce earnings of the ex-spouse who would be making the alimony payments.
Texas courts also observed that spouses who sacrificed educational or career opportunities during the marriage to raise children so their spouses could pursue educational or career opportunities of their own could be adequately compensated for their sacrifice by receiving a larger share of the marital property than spouses who had not made such a sacrifice. In other words, Texas courts believed that since they had the power to give one spouse a larger share of the marital property to compensate for any career or educational sacrifices that the spouse made during the marriage, there was no need to award alimony too. Courts also questioned why ex-spouses should be under any obligation to support each other after divorce, when the whole purpose of divorce is to end the costs and benefits of marriage.
But judges, lawyers, and scholars increasingly criticized the Texas statutory scheme as being unrealistic. For example, before 1995 Texas courts routinely ordered ex-spouses to pay child support from their so-called post-divorce “future earnings,” and these orders survived scrutiny under the state constitution. Critics of Texas law saw no reason why state courts could not order ex-spouses to also pay alimony out of wages and salary they earned after the marriage terminated.
Additionally, critics assailed the absence of alimony provisions in Texas Family Law as being unduly harsh. In a large number of divorces where neither spouse had acquired substantial assets during the marriage, Texas courts were powerless to compensate spouses who had sacrificed educational and career opportunities, since in such situations there were essentially no assets to divide in the first place. As a result, spouses who successfully pursued educational or career opportunities at the expense of their partner were allowed to walk away from the marriage “scot-free.”
No mathematical guidelines exist to tell courts how to calculate alimony. In addition, each state legislature sets its own policy regarding whether and when alimony may be awarded. The Uniform Marriage and Divorce Act (UMDA), which many states use as a model, recommends that courts consider the following factors: the financial condition of the person requesting alimony; the time the recipient would need for education or job training; the standard of living the couple had during the marriage; the length of the marriage; the age, physical condition, and emotional state of the person requesting alimony; and the ability of the other person to support the recipient and still support himself or herself.
Courts have at times awarded alimony when an unmarried couple separates, if the relationship closely resembled marriage or in other circumstances, such as in keeping with the couple’s intentions and verbal agreements. Awards of this type are informally called palimony. Private separation agreements negotiated between divorcing individuals also can contain alimony provisions. For these reasons, it is difficult to estimate accurately the size and frequency of awards through the most common method, U.S. census data.
Since alimony is an award for support and maintenance that one spouse may be compelled to pay to another after the dissolution of the marriage, it would seem to follow that no alimony could be awarded to a spouse following an annulment, which treats the marriage relationship as if it had never existed. In fact, alimony is not awarded to spouses under any conditions following the annulment of a marriage in most jurisdictions. However, in some jurisdictions the enforcement of a flat prohibition of alimony awards to spouses whose marriages have been annulled has sometimes been found to impose unnecessary hardship on a spouse, usually the wife, especially where the parties have lived together for a considerable period of time. Consequently, judicial and legislative exceptions have been created to the basic rule of treating an annulled marriage as if it had never existed, for the purposes of determining whether an alimony award is appropriate. Under these exceptions, temporary as well as permanent alimony have been awarded.
If awards are hard to estimate, compliance with awards is nearly impossible to gauge. Alimony enforcement is unlike child support enforcement, which has the “teeth” of wage garnishment, liens, and other mechanisms. Returning to court with contempt-of-court charges is usually the only option a would-be recipient has to enforce an existing alimony order.
If the divorce decree does not specify an ending date, an order to pay alimony usually remains effective until the court that awarded it changes or ends it. Alimony usually ends when the recipient remarries; this is known as terminable alimony. In the case of the recipient’s remarriage, the payer sometimes must return to court to have the court change the alimony order, but often the termination is automatic.
The payer’s death is not necessarily enough to end payments: some orders allow the recipient to inherit funds from the payer’s estate or require the payer to maintain a life insurance policy that will continue to support the recipient after the payer’s death. These provisions, when made, often involve a recipient whose age or health makes it too difficult for the recipient to enter or reenter the workforce.
Despite the late twentieth-century universality of alimony laws in all 50 states, lawmakers in some jurisdictions continued to propose legislation that would abolish it. In 1999 several Iowa legislators proposed a bill to abolish alimony, arguing that alimony laws provide an incentive to get divorced. The bill never passed.
The court ordered John to pay $400 of alimony per month based on the 10 years of marriage to his wife Angela who did not work the last 4 years while raising their two small children.
You may have to pay out alimony if you divorce your wife and she wants to get as much from you as she can.
The judge made John’s alimony payments so high that he had to take a second job to meet those payments while also affording his own lifestyle.
Husband and Wife
Certified Financial Divorce Practitioner (CFDP)
Academy Of Financial Divorce Practitioners
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This glossary post was last updated: 26th November, 2021 | 6 Views.