Spousal Support-Module 3 of 6

Spousal Support-Module 3 of 6


Module 3: Spousal Support

 

Spousal Support and its History

Spousal support payments are those made to a spouse or former spouse for sustenance and support of the spouse or former spouse.[1] Spousal support is sometimes called alimony, maintenance or spousal maintenance, depending on the jurisdiction.

The person who pays spousal support is called the “payor” or the “obligor.” The person who receives the support is called the “payee” or “obligee.”  All states allow some form of spousal support, but states can and do treat spousal support different from each other. This module will serve as a brief guide through different aspects of spousal support.

Spousal support can be set and governed by agreement or can be imposed by a court order. Payment may be in the form of a lump sum or may be made over time. A court can also award real or personal property in lieu of cash payments.

Until recently, alimony was almost always the payment of support from the ex-husband to the ex-wife, because men were household providers and women stayed in the home. This traditional arrangement created a financial disparity that courts sought to even out during a divorce through payments from the ex-husband to the ex-wife.  This basic approach formed the basis of divorce law from the time of the earliest laws, including the Code of Hammurabi, the Code of Justinian and the English ecclesiastical laws that American domestic relations laws were originally based on.

Recent sociological, political and financial changes empowering women have changed this approach. Coupled with the rise of no-fault divorces, the concept of gender-based alimony has been replaced by the gender-neutral term “spousal support.” Support payments can be ordered from either party to the other regardless of gender.

Spousal support and no-fault divorces

Most court-ordered alimony in the past required some finding of fault grounds from the payor—usually desertion, adultery, fraud, and so on. That is no longer the case. All states now allow no-fault divorce, although states have also kept fault grounds on the books. Because of that, a court does not have to find fault to order spousal support and can use it as a financial tool to alleviate or cure income disparity between the parties. But courts can also use grounds—for instance adultery - to award or increase spousal support.[2]

Community property states

Community property states[3] are stated that consider all marital property to be owned 50/50 by both spouses as a matter of law. So, theoretically there would not be unequal financial position between the parties. Because of that, some community property states frown on spousal support. However, that is decided on a case-by-case basis and is not a set rule. For instance, California, is a community property state that allows all forms of spousal support.[4] It should be note that even if all property is owned 50/50 during the marriage, disparity in post-marriage income can also be equalized by spousal support payments.

Common Law Marriage and “Palimony”

“Common law marriage” is currently recognized in nine states and the District of Columbia.[5] A common law marriage occurs when two parties live together as a married couple for an extended period of time. Common law marriages are difficult to prove. Still, where recognized, a common law marriage gives rise to all of the rights and obligations of a normal, legal marriage, including the possibility of spousal support.

A close cousin to common law marriage is “palimony,” which is a slang term for alimony awarded even when there was no legal marriage between the parties (and can be awarded even in states that do not recognize common law marriage).  

Palimony is based on an implied contract theory that a couple does not need to be married to each other for one party to be obligated to support the other. If one party worked and made the couple’s money while the other stayed home, took care of the house and especially if he or she tended to the children of the relationship, courts in some states can award the equivalent of spousal support. This award is based on an implied contract that a court will infer between the two parties. This is particularly true if there was a substantial amount of money made by one party and the other party did not work because the wealthy partner insisted on being the sole breadwinner.

This award is called “palimony” after the term came of use during press coverage of the case Marvin v. Marvin[6], wherein actress Michelle Martin sought support from her long-term partner, singer Lee Marvin. Despite the wide use of the term, successful palimony cases are rare, and, in fact, though initially winning a “rehabilitation” payment from Lee, Michelle Marvin’s award was eventually overturned by the California Court of Appeal.


Types of Spousal Support

There are several forms of spousal support: Temporary, Permanent, Rehabilitative, Lump-Sum, and Reimbursement. Spousal support is only allowable under applicable state statute, and not all states allow all types.

There are two types of temporary spousal support.[7] The first is called “separation” alimony or, technically, alimony pendente lite, which lasts from the time the initial temporary order is signed until the final decree of divorce is filed. This type is designed to help support the payee while the divorce is pending, and then it ends. It can be changed to another type of spousal support as a part of the final divorce decree, continuing the temporary support past the time of the decree, with or without a change in amount.

The second type of temporary support lasts from the time it is ordered until a specified time after the divorce is finalized. This can also be characterized as “permanent spousal support for a fixed period.” This time limit can be a period of time, for instance two years, or it can be until an event takes place, for instance graduation from a trade school or college.

Permanent spousal support continues until the death of either party or the remarriage of the recipient of the support. Permanent spousal support is not an option in many states and is not ordered often in the states that allow it.[8] Permanent support is usually awarded to a spouse who stayed at home and deliberately left or never entered the workforce, or who ended an education to tend to the home and family. Courts in may also award permanent support if the payor spouse is disabled.[9]

Rehabilitative spousal support is a form of temporary support given to a spouse who stayed home to take care of the family and was not a member of the workforce for that reason.[10] Rehabilitative support is a form of temporary support specifically designed to pay for the education of the recipient spouse. Generally, the support ends when the education is completed, and the spouse can to enter the workforce.

A lump sum support payment, also called “alimony in gross,” is what it sounds like—the total amount of support in the order or agreement is reduced to a single payment, or a small number of payments over a short period of time. A lump sum payment has some of the earmarks of a property settlement for tax purposes, meaning that it could not generally be treated as alimony payments. However, this was made largely irrelevant by the Tax Cut and Jobs Act of 2017, which eliminated the federal tax deduction for alimony payments.

Reimbursement spousal support can be awarded where one spouse worked to put the other through college, paid the tuition, put up the cash to start a business or in other similar circumstances. It can also be awarded where one spouse committed financial misconduct, which caused the other spouse to incur some sort of debt or liability.[11] This is a form of temporary support, where the support ends when the reimbursement is completed. The reimbursement could be the total amount spent or some percentage of that amount.  


Factors Used in Calculating Spousal Support

The parties can agree to any sort or amount of spousal support, either in a prenuptial agreement or in a separation agreement. If they cannot agree, then the court steps in and determines if spousal support is justified. Different states have different guidelines for calculating spousal support. Although all 50 states and the District of Columbia allow some kind of spousal support, the circumstances and methods of calculation for each jurisdiction is different.

For instance, some states rely on the judge to calculate support amounts, while other states have specific formulas to be applies, as with child support. Some states take into consideration the relative fault levels of the parties, such as in cases of fraud or adultery, while others do not.

Courts will weigh numerous factors in deciding whether to impose spousal support on a party, how much that support will be, and how long it will last. These factors include: Top of Form

     -  The ability to pay. Spousal support will not be awarded if there is no money to distribute.

n     -  If one party stayed home to take care of the family and does not have a work history, that is a strong factor in awarding support.

n     -  The sources of income of the parties and how reliable they are.

n      - The property division at the time of the divorce, and the assets and debts each party was left with.

n      - The earning ability of both parties. If one spouse has a law degree and the other has a high school degree, the lawyer will probably be paying. Another example is if one party put the other through school and there is an income disparity because of that training.

n      - The length of the marriage. Most courts will only order spousal support for marriages of substantial length. Many courts will follow a formula in long-term marriages of awarding support for half the length of the marriage. For instance, in a 20-year marriage, a court would award 10 years of spousal support.

n      - The ability of the payee spouse to work outside the home is another consideration. For instance, if there are limits because of the payee’s physical or psychological health or age, or if a parent must stay home to tend to a child.

n      - Splitting retirement benefits are technically handled during property division but can be a part of the calculation, because the purpose of spousal support is to make sure that the payee can survive.

n      - If the couple was used to a certain lifestyle, the payor may be made to support the payee on that level; at least temporarily and to the extent practical.

n      - The court may order temporary alimony to allow the payee spouse to receive education or job training, so there will be a time limit on getting that training and then finding a job.

n      - Taxes may also be taken into consideration.

n      - Any other factors that make spousal support fair for each party may be considered.

        Considering those factors and more, a court can then order spousal support.

 

Spousal Support vs. Property Division

It is important to carefully delineate whether the transfer or money or property from the payor to the payee is categorized as a property division or spousal support. There are two reasons for this. First, spousal support is subject to the continuing jurisdiction of the court, and property division is not. Once a property split is ordered, that is it. But spousal support can be changed or terminated by the court, by operation of law, or by agreement of the parties. The second reason for this distinction is that taxes are different for property division and child support in divorces that were filed before January 1, 2019. In divorces that were finalized before January 1, 2019, spousal support payments are a “taxable event.”  Those payments are taxed as income to the payee and a deduction to the payor.[12] So any modifications to these orders will be heard under the pre-2019 law. However, under the Tax Cuts and Jobs Act of 2017, spousal support is no longer classified as a taxable event.[13] Support is not income and is not deductible. All divorces finalized after January 1, 2019 come under the 2017 law.


Termination and Modification of Spousal Support

Spousal support may be modified or terminated either by law or by the terms of the separation agreement.[14] That does vary by state and by the terms of the agreement or order.  It can also be modified or terminated by a subsequent agreement between the two parties. Most state spousal support laws and virtually all separation agreements have a list of behaviors of the parties that will trigger the termination or modification of support.

 

Reasons for modification of a spousal support order include:

-       Change in financial position of either party, usually by 10% or more.

 

-       Retirement. Retirement may or may not lessen, or may even increase, one or both party’s income. Some of those changes may be in the form of property division, such as a 401(K) or pension distribution. Some of them may have tax consequences, which will also affect income.

 

Reasons for termination of a spousal support order include:

-       Death of either spouse. This is true in virtually all state laws and all separation agreements. Spousal support does not reach in to the estates of either party.

 

-       Remarriage of the payee spouse. This change universally terminates support and is usually included as a clause in separation agreements that include spousal support.

 

-       Cohabitation of the payee spouse with another person as if married. How this can be proven and the burden of proof to establish cohabitation varies widely by jurisdiction.

 

-       Illness. A chronic illness could cut both ways. It could cause an increase to the payee spouse if that party falls ill. It could cause a modification or termination of the payor spouse’s obligation if that party falls ill.

 

-       Unemployment. Most courts would not be sympathetic to unemployment as a cause for terminating support, although some may allow it as grounds for temporary relief.

 

-       Time limits. In the case of temporary spousal support, support will end after a certain period of time either by decree or through the separation agreement.

 

In our next module, we will look at child support and spousal support laws as they vary throughout the country, on the federal level and in cases with international dimensions.

 

 

 

 

 

 


 



[2] See ex. Ryland v. Ryland, 12 So. 3d 1223 (Ala. Civ. App. 2009).

[3] Louisiana, California, Arizona, Texas, Washington, Idaho, Nevada, New Mexico and Wisconsin.

[5] Colorado, Iowa, Kansas, Montana, Oklahoma, Rhode Island, South Carolina, Texas and Utah.

[6] 18 Cal. 3d 660 (1976).

[8] States that can allow permanent spousal support include Michigan, New Hampshire, New Jersey, Oregon, Virginia, and Washington

[9] See ex. Farnham v. Farnham, No.E2008-02243-COA-R3-CV (Tenn. Ct. App. Dec. 29, 2009).

[13] 2017 Internal Revenue Code Sec. 1309.