Will You Receive Alimony After You Get a Divorce?
Alimony in divorce, also known as spousal support or maintenance, is basically payment from one spouse to his or her ex-spouse for living expenses. Alimony is separate and different from child support. Alimony is only awarded at the discretion of a judge, and many factors can influence the decision.
Reasons for Alimony
Much like divorce laws, the rules for awarding alimony differ from state to state. Usually, it is the judges who wield the greatest authority as to when alimony 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.
Amount of Alimony
When alimony is awarded, it’s usually the amount that the recipient needs for “maintenance.” This can include such things as shelter, food, clothing, transportation expenses, and other household expenses. The court usually does not consider things like maintaining lavish lifestyles, vacation and recreation expenses, or contributions to savings as part of alimony. Rules vary by state, but judges have wide authority in granting alimony and setting the amount awarded. It’s up to each party to convince the judge why he or she needs alimony or not.
People pay alimony periodically or in a series of installments, oftentimes monthly. Many states allow the judge to require one lump sum payment, but it’s very unusual for alimony to take this form. Alimony has tax implications for both parties; it’s tax deductible for the one paying and it’s taxable income for the one receiving it. A large lump sum payment might inadvertently push someone into a higher tax bracket. Yet some situations require a lump sum payment, as when a spouse makes it clear that he or she will not make periodic payments.
Length of Alimony
Rules governing how long alimony payments will continue also vary from state to state. Some states say payment will end when the receiver remarries or begins living with a member of the opposite sex, when the spouse paying alimony dies, or when the couple’s separation agreement includes a date for terminating payments. Alimony awards may be modified to increase, reduce, or terminate payment, depending on the state and situation. Given that alimony has specific tax implications, the IRS has strict standards as to how it’s treated on tax returns. Those considering a divorce involving alimony should investigate their state’s rules as well as the potential effect on their taxes before taking any permanent action.