All about Alimony
Most people know that alimony is usually a series of cash payments from one person to his or her ex-spouse. Alimony is separate and different from child support and can only be awarded by a judge. Like divorce laws, the rules for awarding alimony differ from state to state and many factors can influence the decision process. Judges wield the most authority as to when alimony is considered appropriate and when it is not. State laws may require judges to consider circumstances such as standard of living during marriage, the characteristics of each individual’s income and earning capabilities upon divorce, the age and health of each individual, and the need for or ability to pay alimony. Alimony is usually only granted when one spouse has been financially dependent on the other spouse for a long period of time.
The amount of money awarded as alimony will cover things like food, shelter, clothing, transportation, and other household expenses. The court will not consider maintaining a lavish lifestyle, vacation and recreation expenses, or contributions to savings as part of alimony. Rules will vary by state, but most judges have wide authority in granting alimony and setting the amount awarded.
The payments will most likely be in a series of monthly installments and lump sum payments can occur, but are rare. It is important to remember that alimony has tax implications for both parties in a divorce. Alimony is tax deductible for the payer and taxable income for the one receiving payment. Large lump sum payments are usually avoided because they can sometimes push people into an unwanted tax bracket. Some situations may require a lump sum payment though, like when a spouse simply will not make periodic payments.
Just how long alimony payments will last varies with most jurisdictions ending payment when the receiver remarries or begins living with a member of the opposite sex and in cases where the spouse paying alimony dies. Alimony can be modified to increase, reduce, or terminate payment, depending on the state and situation.
Types of alimony:
“¢ Permanent Alimony
“¢ Temporary Alimony
“¢ Rehabilitative Alimony
“¢ Lump Sum Alimony
“¢ Reimbursement Alimony