Clients are often concerned about financial assistance to or from their ex-spouse after a divorce. One form of financial assistance to be paid or received may be child support. The other form of assistance is maintenance, formerly called alimony. Maintenance is usually tax deductible for the paying party and counts as income to the receiving party on his or her tax return.
Maintenance may be considered appropriate when a party’s income is not sufficient to pay his or her usual bills - or to meet his or her reasonable needs – AND the other party earns enough income such that he or she can assist the other spouse in meeting reasonable needs while still paying for his or her own reasonable needs.
There are two kinds of maintenance: statutory or contractual maintenance.
Statutory maintenance is typically paid until modified or ended by the court, until the receiving party remarries, or until the death of either the paying or receiving party. This is the only type of maintenance that a court can award after a trial.
Contractual maintenance is paid according to the agreement of the parties. Usually, contractual maintenance is paid only for a set number of years. It may be paid in agreed upon amounts over time until it ends on an agreed upon date. Contractual maintenance will also usually (not always) end at the remarriage of the receiving party or at the death of either party.
In determining whether maintenance is appropriate in your case several factors will be taken into consideration. No one of these factors will alone decide if maintenance is appropriate. Instead, all or some of them will be analyzed together. Some of those considerations are:
Income disparity. If one party earns significantly more than the other, it may be appropriate that the higher earning party pay maintenance to the other.
Earnings from employment. Is each party capable of meeting his or her reasonable needs through earnings from employment? If both parties are capable of supporting themselves through their jobs, maintenance may not be appropriate, even if one party earns much more than the other.
Age. It may not be reasonable to assume that a middle-aged or older party can become self-supporting without assistance. Similarly, someone who is retired may not be able to pay maintenance and still be self-supporting.
Education. If a party has little education, he or she may not be able to become self-supporting.
Disability. If a party is disabled he or she may need to receive maintenance to meet reasonable needs and/or be unable to pay maintenance to the other party.
The Center for Family Law has years of experience helping clients determine whether maintenance is something they may be eligible to pay or receive, and how best to address it. Give us a call and we’ll be happy to set up a consultation to discuss your individual situation.