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HOW MUCH IS ALIMONY?

Questions.Answered

What is it?

Simply put, the spouse with the highest income—the “supporting spouse”—typically pays Alimony to the spouse with the lower income—the “dependent spouse.” However, the Court examines a number of specific factors to determine an Alimony case. We will take a deeper look at those factors further down in our discussion.

Does fault matter?

Does the “supporting spouse” have to be found “at fault” to pay alimony?
No. The law in North Carolina changed in 1995. A supporting spouse does not have to be found “at fault” to be required to pay Alimony. This change in law made Alimony available to more spouses. At the same time, the length of time support must be paid decreased in many cases, especially when the dependent spouses are young and still employable.

If a Judge rules that a spouse does not, in fact, require on-going Alimony, it will not be awarded, even if the potential supporting spouse committed some sort of marital misconduct. However, the Judge may consider any marital faults when setting the amount of Alimony to be paid.

One other way fault may still be considered lies with the dependent spouse instead. If there is proof that the dependent spouse committed adultery while the supporting spouse did not, the dependent spouse could lose entitlement to Alimony. This spouse may still be entitled to some post-separation support (funds deemed necessary for reasonable needs) for a specified period of time or until Alimony is either awarded or denied by the Court. The dependent spouse may defend against this allegation, and a divorce lawyer will be able to guide in such a defense. Or this spouse may choose instead to invoke their constitutional privilege against self-incrimination and thereby abandon any claims to Alimony.

What is fault anyway?

Marital faults include the following:

  • Extra-marital sexual acts or behaviors proven by direct or circumstantial evidence showing both:
    1. Opportunity—a situation in which the accused spouse and his or her lover are alone together in a place where sexual activity could take place; and
    2. Inclination—expressions of love and affectionate behavior between the accused spouse and his or her lover.
  • Criminal acts
  • Abandonment:
    1. Cessation of cohabitation by one spouse without justification, the consent of the other spouse, or the intent to renew cohabitation; or
    2. Constructive Abandonment: Cruel and intentional acts, neglect, or purposeful refusals to fulfill marital obligations.
  • Malicious turning out of doors
  • Endangering the life of the other spouse
  • Indignities on the other spouse which make life difficult and create an intolerable living environment continually over a period of time
  • Reckless spending, destruction, waste, diversion, or concealment of money
  • Excessive use of alcohol or drugs
  • Refusal to provide necessary subsistence for the other spouse

When do I ask for Alimony?

You must request Alimony before a divorce decree is granted. A person may file an action for this support at the same time as they file for a divorce or at a separate time, but it must occur before the divorce is granted.

Alimony may be determined prior to division of property, but in that case, a spouse may request a reconsideration of the Alimony awarded once all property is divided.

How do I ask for Alimony?

Your claim for Alimony may be settled out of court with a separation agreement. Each party would simply agree to both the amount and duration of Alimony in this document.
When a request for Alimony goes to court, the Judge determines issues of dependency and total amount to be paid.

A dependent spouse must provide proof that his or her resources are insufficient to cover any reasonable needs and that the supporting spouse has the finances available to pay for those needs.

How long is Alimony paid?

Either the parties agree, or the Court will determine the answer to this question. Alimony may be paid in one lump sum or on a monthly basis. Typically, a ruling sets Alimony for a specific amount of time. Support may be terminated, however, if one of the following events occurs:

 

  • The two resume their marriage relationship;
  • One of the spouses dies; or
  • The recipient remarries or cohabits with another adult.

How is the amount of Alimony determined?

A Judge first determines how much money a dependent spouse needs to cover reasonable needed expenses—such as lodging, food, and clothing—and then confirms if the supporting spouse would be able to financially cover those needs, based on his or her income, and reasonable needs, at the time of consideration.

The Judge goes on to consider the following information when determining both the amount and duration of Alimony in each case:

  • The accustomed standard of living from the last several years of marriage;
  • Incomes—both earned and unearned, including earnings, dividends, and benefits—of each spouse and/or the income-earning potential for each spouse;
  • Any assets, liabilities, or debts held by each spouse;
  • Required expenses;
  • The length of the marriage;
  • The spouses’ ages and physical, mental, and emotional conditions;
  • A spouse’s homemaking contributions;
  • The effects of serving as primary caregiver of a child on the ability to earn an income;
  • The educational or training requirements needed for a dependent spouse to be able to obtain a job that could cover those reasonable needs;
  • Marital misconduct of either spouse;
  • One spouse’s contributions to the education and training or increased earning power of the other;
  • Legal obligations of either spouse to support any other person;
  • Any property brought into the marriage by either spouse;
  • Tax ramifications of the Alimony (federal, state, and local); and
  • Any other factor a Judge deems just and proper to the case.

A decision may be made without a trial or oral testimony if the Court does not deem it necessary and can instead review the facts from evidence submitted in other ways.

The Court will present its reasons for either awarding or denying support. When support is awarded, the Court will give further reasons for its requirements on the amount, duration, and manner of payment for the support.

How is the amount of Alimony determined?

A Judge first determines how much money a dependent spouse needs to cover reasonable needed expenses—such as lodging, food, and clothing—and then confirms if the supporting spouse would be able to financially cover those needs, based on his or her income, and reasonable needs, at the time of consideration.

The Judge goes on to consider the following information when determining both the amount and duration of Alimony in each case.

  • The accustomed standard of living from the last several years of marriage;
  • Incomes—both earned and unearned, including earnings, dividends, and benefits—of each spouse and/or the income-earning potential for each spouse;
  • Any assets, liabilities, or debts held by each spouse;
  • Required expenses;
  • The length of the marriage;
  • The spouses’ ages and physical, mental, and emotional conditions;
  • A spouse’s homemaking contributions;
  • The effects of serving as primary caregiver of a child on the ability to earn an income;
  • The educational or training requirements needed for a dependent spouse to be able to obtain a job that could cover those reasonable needs;
  • Marital misconduct of either spouse;
  • One spouse’s contributions to the education and training or increased earning power of the other;
  • Legal obligations of either spouse to support any other person;
  • Any property brought into the marriage by either spouse;
  • Tax ramifications of the Alimony (federal, state, and local); and
  • Any other factor a Judge deems just and proper to the case.

A decision may be made without a trial or oral testimony if the Court does not deem it necessary and can instead review the facts from evidence submitted in other ways.

The Court will present its reasons for either awarding or denying support. When support is awarded, the Court will give further reasons for its requirements on the amount, duration, and manner of payment for the support.

How is Alimony paid?

Alimony may be paid in one lump sum, through regularly scheduled payments, or through a transfer of title or possession of some type of personal property or an interest in property.

What about attorney’s fees?

A Judge may award attorney’s fees to the dependent spouse as well if he or she determines it a necessity.

What about premarital agreements?

It is possible to overrule a premarital agreement if it would set support at an amount that would make one spouse eligible for public assistance or would eliminate any support and result in the other spouse’s eligibility for public assistance. The Court may then adjust the requirements to provide enough support to avoid eligibility for public assistance.

Can Alimony be modified?

Yes, Alimony may be modified if it is paid under a court order and there is proof of a substantial change in circumstances for one of the parties involved. However, the Court in North Carolina may not change any support set up by the Court of another state.

Also, be aware of the Alimony Recapture Rule (explained below) and the effects a modification could have on a supporting spouse’s tax situation.

Can Alimony be modified?

Yes, Alimony may be modified if it is being paid under a court order and there is proof of a substantial change in circumstances for one of the parties involved. However, the Court in North Carolina may not change any support set up by the Court of another state.

Also, be aware of the Alimony Recapture Rule (explained below) and the effects a modification could have on a supporting spouse’s tax situation.

What about taxes?

The supporting spouse may deduct Alimony payments on taxes; and the dependent spouse must report Alimony payments as income on taxes as long as the following requirements are met:

  • Payments are made in cash, not through some service or good instead;
  • Payments are made as the result of and specified in a Court-ordered requirement or through a separation agreement;
  • Payments are specifically designated as Alimony;
  • Each person lives in separate residences, not together; and
  • Payments are not required after the death of the dependent spouse.

A supporting spouse should understand the Alimony Recapture Rule. If Alimony decreases or ends at some point during the first three years after a divorce, the supporting spouse may be required to report previous years’ deducted payments as income.

If the total paid in the third year decreases by $15,000 or more from the total paid in the second year or the totals paid in the second and third years are far less than the total paid in the first year, the payor may face this Rule. In this situation, the dependent spouse would be able to remove from income previously received Alimony.

Even modifications to your Alimony agreement can enact this Rule, so you should seek legal counsel to avoid Alimony-related tax issues.

How is alimony enforced?

When the Court orders Alimony, enforcement of payment is governed by statute; so several enforcement options exist when payment isn’t made. Likewise, alimony set forth through a separation agreement falls under the rules of contract law and the enforcement of contracts.

 

So what do I do next?

We know this is all stressful. That’s why we’re here. Call us today to schedule a consultation, or click here to schedule a consultation online!

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