Alimony
In recent years alimony, due to the negative connotations, has been referred to as maintenance and also spousal support. Traditionally, alimony was awarded to the wife and paid by the husband. However, during the 1970’s and 1980’s judges began to award alimony to the husband depending upon the circumstances. Now, alimony is awarded to either spouse in an effort to maintain the standard of living that both parties were accustomed to during the marriage.
Alimony is often awarded prior to the divorce by agreement of the parties or in a temporary order hearing.
Keep in mind that an award of alimony in Utah will cease upon death of either party, the remarriage or cohabitation of the recipient spouse. It is a good idea to include a life and disability insurance policy in an amount sufficient to replace the alimony in case the payor spouse dies before alimony ends. Because the recipient spouse has an insurable interest in the person being insured, he/she is able to purchase the policy. This could be money well spent in the event that life and disability insurance are not part of the parties’ agreement. Generally, the following factors may be considered in determining alimony:
- Duration of the marriage.
- Earning capacity of both parties.
- Age, as well as physical, mental and emotional state of each party.
- Other income, including but not limited to interest and dividends.
- The contribution by one spouse to education and furtherance of career of the other.
- The contribution of one spouse as a homemaker
- How much earning power will be affected by the parenting requirements of the custodial parent.
In addition to the above, the judge may consider ANY economic circumstances of either party that the judge deems to be just or proper. The amount of alimony payments is generally calculated based on the above considerations.Unlike child support there is no clear-cut calculation that the courts use to determine the amount of spousal support. There is a formula, but there are so many subjective parts that alimony can cause expensive court battles. In Utah, generally alimony seeks to equalize the parties’ standard of living at the time of their separation. Each parties’ net income (including financial support from others) and their monthly expenses are used to determine what the recipient spouse’s needs are in order to equalize their standard of living. This is more complicated than just saying they should each have the same amount of money each month. In fact, that is not what alimony is expected to do. Rather, it is the standard of living that is to be equalized as much as possible. For example, Let’s say one spouse is living in a home with a paid off mortgage and the other spouse is paying a mortgage or rent. Given this scenario, the spouse paying a mortgage or rent will need more funds for housing than the other spouse in order to equalize their standard of living.
- The duration of the marriage:A short-term marriage will usually not qualify for an alimony award from the courts (typically less than 5 years, especially if there are no minor children). The couple could agree in mediation to an alimony arrangement regardless of the duration of the marriage. The courts have been known to award fewer years of alimony than the number of years the parties were married; however, the statutes allow alimony up to the number of years married, with a few minor exceptions.
- The need of the recipient spouse:This is determined by looking at two criteria: First, the monthly budget of the recipient spouse. This would include any monthly expenses needed to live including costs for any children living with that spouse. The second criteria is the ability to earn income (including income from all sources such as gifts, dividends, etc.). If the recipient spouse is currently employed, then their earnings may be used to calculate this figure. If the recipient spouse is only working part-time, then they may need to calculate the earning ability based on full time employment. If the recipient spouse is not employed, then the recipient spouse may need to impute an income ability based on past work experience, education, and skills. The mediator can assist in this calculation. If the recipient spouse is receiving any child support or other income, such as dividends, then that is also factored in.
Note the following example where the recipient spouse has primary physical custody of the children:
Current Net Income from all Sources | $3,800 |
---|---|
Current Child Support Received | $800 |
Total Income | $4,600 |
Monthly Budget with 4 children | $7,100 |
Total Income Minus Monthly Budget with 4 Children | -$2,500 |
Need of Recipient Spouse | $2,500 |
- The ability of the paying spouse:This is determined by using the same technique used for establishing need by the recipient spouse. First, the monthly budget of the recipient spouse, including any child support paid. Second, the ability to earn income (including income from all sources such as gifts, dividends, etc.). If the paying spouse is currently unemployed then an amount may be imputed based on the ability to earn.
Note continuation of the above example where the paying spouse does not have physical custody of the children:
Current Net Income from all Sources | $9,500 |
---|---|
Monthly Budget Including $800 in Child Support Payments | $6,500 |
Income Minus Monthly Budget | -+$3,000 |
Ability to Pay | $3,000 |
In this example the paying spouse has the ability to cover all of the recipient spouse’s shortfall and alimony would be $2,500, leaving the paying spouse an excess of $500 after alimony and child support.
- Lump Sum Alimony: This concept is based on a mutual agreement that the couple makes where the paying spouse agrees to pay a lump sum amount of spousal support instead of monthly payment. The courts will not likely impose a lump settlement on a couple; however, some couples choose this alternative in the course of mediation, which the courts will endorse if it is an agreement between the parties. There are advantages and disadvantages to this concept. Usually, the lump sum amount is less than the total payout of a monthly support amount over the number of years of marriage.
The disadvantage for the paying spouse is that if the receiving spouse remarries before the term of alimony, then the paying spouse would have paid less if they had just paid monthly. As you can see, there is a certain amount of risk to either choice.
It should be noted that a monthly payment agreement might put a strain on the parties. If the payments are accompanied with animosity each time the payment is made or if there are problems with the payments being made on time, then it opens the door for continued conflict, which is taxing on the parties. The couple should weigh the desire for monthly payments against the potential problems that can come from having to communicate monthly about this financial need.
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