Updated October 11, 2023
Alimony is when one spouse provides financial support to the other spouse during the divorce process or after the marriage has ended. It is also known as spousal support or maintenance.
The courts award this to help the spouse with a lesser or no income live relatively comfortably while adjusting to their new financial circumstances. Both men and women can claim alimony depending on the law of the land and their financial circumstances.
Table of Contents
- Alimony means a regular predetermined amount awarded to a spouse or ex-spouse upon separation or divorce.
- Its purpose is to support the financially dependent spouse so that they can continue their usual lifestyle after the separation.
- It is often awarded to ex-spouses in long-term marriages (for example, more than 10 years), and these payments end upon death, remarriage, or court order.
- The US Tax law no longer considers it as an income for the payee, nor is it tax-deductible for the payer.
- The main difference between alimony and child support is that alimony is for the maintenance of the ex-spouse, while child support is to financially maintain the child.
Courts award alimony to the lower-income spouse for the following reasons:
- To provide financial support to the low or no-income spouse.
- To ensure a fair distribution of assets and wealth among the spouses.
- Recognize the spouse’s contributions to the marriage, such as a career sacrifice or homemaking.
- Help the low-income spouse maintain their standard of living temporarily or permanently, even after separation.
Types with Examples
The following are the major types of alimony:
1. Temporary or Interim
Courts award this during the divorce proceedings to help the lower-earning spouse cover immediate expenses like divorce costs and daily expenses. Once the divorce proceedings are over, this alimony stops.
Example: If a wife is a stay-at-home parent who needs financial support while the divorce is pending, she can receive temporary alimony to help her with the day-to-day expenses. Once the court finalizes the divorce, she stops receiving the money.
If the financially dependent spouse cannot realistically become self-supporting due to age or health constraints, they are eligible for permanent alimony. It is a monthly payment made until one of the spouses dies or the supported spouse remarries.
Example: Suppose two people have been married for 30 years and are now getting a divorce. The wife gave up her career 25 years ago to raise her children. It’s not realistically possible for such a person to get a new job after all this time. In this case, the wife can receive a monthly payment from her husband to maintain her standard of living.
Its aim is to help the dependent spouse become financially independent by gaining education or specific skills. This alimony continues only for a particular period and stops once the recipient spouse becomes financially independent.
Example: Suppose a wife supported her husband through school when they filed for divorce. In such cases, the court might ask the wife to keep paying for the husband’s education until he completes his education or gets a job.
Courts award this to reimburse the low-income spouse for their investment in the other spouse’s career growth. It is not an ongoing payment; it is paid only once.
Example: Suppose a wife left her well-paying job and stayed home so her husband could focus on his career. In this case, the wife can receive a reimbursement alimony for the sacrifices she made for her husband’s career.
It is a one-time payment where one spouse pays the other money instead of distributing their marital assets. This happens if one of the spouses does not want property or assets from their marriage.
Example: Suppose a husband and wife shared a home with their two kids. The couple doesn’t want to displace their children, so they decide not to sell the house. Instead, the husband receives a lump-sum alimony from his wife in place of their marital house.
Courts can award durational alimony when neither rehabilitative nor permanent alimony is suitable, but a spouse still needs financial support. As the name suggests, it is for a fixed time duration. The courts decide the duration.
Example: Suppose a couple was married for 5 years, and the wife gave up her job to be with her husband. Now that they are getting a divorce, the court can ask the husband to pay his ex-wife a set amount for 2 years so that she has enough time to get back on her feet.
7. Bridge the Gap
The purpose of this is to help the low or no-income spouse transition from being married to being single. The high-earning spouse is supposed to pay for the short-term and immediate expenses of the low-earning spouse for a short time.
Example: Suppose the husband is completely financially dependent on the wife. After the divorce, he may need some time to sort everything out. In such a case, the court may ask the wife to cover the husband’s immediate expenses, like housing and transportation, for a few months until he finds his footing.
The eligibility criteria and the factors affecting alimony awards vary as per the law of the land. However, typically, it depends on the following factors:
- Duration of the marriage: Courts generally award this amount in long-term marriages (at least 10 years), although the specific laws vary from place to place.
- Age, health, and educational levels of both spouses: Age, health issues, and the educational level of the spouses also matter as all these factors contribute to the earning potential of the person.
- Standard of living established during the marriage: The courts also consider how the couple lived during their marriage. It includes the type of accommodation, food, clothing, other expenses, and childcare costs.
- Contributions made during the marriage: Often, a consideration is whether the spouse has made a significant contribution to the marriage, for example, giving up a career, becoming a stay-at-home parent, etc.
- Financial resources and earning capacity of both spouses: The court considers the current earnings as well as the future income potential of both spouses to determine the eligibility for, the duration, and the amount.
- Reason for divorce/separation: The court also considers the reason for divorce or separation. That is, if a marriage ends due to infidelity, domestic violence, or abuse, it helps determine the amount.
US Tax Rules
Before 2018, in the US, the alimony payer could deduct the amount from taxes, and the receiver had to pay taxes on the amount they received because it was counted as taxable income.
However, under the Tax Cuts and Jobs Act of 2017, for all the divorces finalized after December 31, 2018, the payer can no longer deduct the alimony amount from their taxable income, and recipients do not need to report it as income.
Alimony Vs. Child Support
The following are the main differences between alimony and child support:
|To financially support the spouse who has no income after divorce.
|To meet the financial needs of the children after divorce.
|The low or no-income spouse.
|The parent who has custody of the children.
|The spouse with the higher income.
|The non-custodial parent.
|Often determined by a court or through a mutual agreement between both parties.
|Determined by the state guidelines.
|To financially support the recipient.
|To fulfill the education, healthcare, and other daily needs of the children until they reach the age of majority.
|1. For divorces finalized before December 31, 2018, The alimony payer can deduct the amount from taxes, and the person receiving the alimony has to pay taxes on the received amount.
2. For divorces finalized after December 31, 2018: Alimony is neither taxable for the payee nor tax deductible for the payer.
|The one who pays child support cannot deduct the amount from taxes, and the person receiving the child support (custodial parent) does not need to pay taxes on the received amount.
|These payments end due to the death of either spouse, remarriage of the dependent spouse, or due to a court order.
|A non-custodial parent has to pay child support until the child turns 18.
Frequently Asked Questions (FAQs)
Q1. What is alimony based on?
Answer: Alimony is based on various factors like marriage duration, the financial position of the spouses, age, health, educational qualifications, contribution to marriage, and the reason for divorce.
Q2. How long does alimony last?
Answer: The duration of alimony can vary widely based on several factors, including the type and the specific circumstances of the divorce. For instance, temporary alimony ends once the divorce is finalized, while rehabilitative and reimbursement alimony is awarded for a specific time. However, permanent alimony ends when either spouse dies or the supported spouse remarries.
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