Table of Contents Hide
- What Is Alimony?
- Types of Alimony
- How Alimony Works
- How Alimony Is Calculated
- How Long Do You Have to Be Married to Get Alimony?
- Is Alimony Taxable?
- What Happens if the Divorce Was Modified After 2018?
- Alimony in Texas
- How Long Does Alimony Last For?
- Alimony FAQs
- Is alimony taxable?
- Can alimony be invested in IRAs?
- Is alimony possible in Texas?
- Related Articles
Are you involved in divorce proceedings and you are probably in line to receive alimony or about to pay your spouse alimony, and you would like to get yourself acquainted with the ways it works? If so, you are at the right place. This article covers some of the questions on your mind concerning alimony payments. Questions ranging from what alimony is, how long does alimony last, how judges award alimony, whether it is taxable, and how both you and your spouse can possibly reach an agreement without having a judge make one for you.
Alimony, unlike what most people believe, doesn’t happen automatically and is not awarded by every court in the US. Let’s dive right in
What Is Alimony?
Alimony, which is also known as spousal support or spousal maintenance, involves monetary payments from one spouse to another, usually from a higher-earning spouse to a lower-earning one. It is a financial obligation from one spouse to another during divorce or after divorce.
This might be done either by mutual agreement between both parties who are involved in the process of being divorced or by payments made involuntary by court orders from a judge.
It is important to note that spousal support is a way to ensure that the recipient spouse can meet their basic needs. spousal support has been altered over time to be gender neutral, that is, spousal support can be awarded to either the male or female spouse after marriage.
Types of Alimony
The various types of spousal support include:
- Reimbursement and
- Lump-Sum Alimony
#1. Permanent Alimony
Permanent alimony is paid to the recipient spouse until he/she dies or remarries. The amount paid to the recipient spouse depends on his/her living expenses, contributions to the marriage, age, and health of the ex-spouse.
In most cases, the court might decide to introduce the ” co-habitation clause” into the court orders awarding permanent alimony. These conditions ensure the recipient spouse quits receiving spousal support after 2–3 months of cohabitation.
The court orders permanent spousal support only when you have been married for a long period (10 years ), in which case the woman, for instance, might be finding it difficult to get a job to meet up with various financial needs. This only happens in most divorce cases.
In a case where the couple was married for 30–40 years and the court split their property evenly, the spouse who earned more during the marriage is not expected to provide spousal support because both parties are on the same financial level.
#2. Temporary Alimony
This sort of maintenance is frequently awarded to help the receiving spouse get back on his/her feet after a divorce. Temporary alimony is not granted for a long period, largely for about 5 years or even less.
Spouses who are granted temporary spousal support by the court usually have the same earning level. The amount to be paid oftentimes is determined by the overall cost of their living expenses.
#3. Rehabilitative Alimony
This type of spousal maintenance or Alimony is granted to the lesser-earning spouse by the court in other that the recipient spouse gets a job and becomes self-reliant, it is granted for a limited period of time.
It is usually granted when the recipient spouse requires education or desires to learn a skill to enter into the workforce and earn a living.
Rehabilitative spousal support is granted for 3 years or even less. It ends when the recipient spouse has gained employment and is able to provide for his/her basic needs.
#4. Reimbursement Alimony
Reimbursement alimony is like a kind of compensation to the recipient spouse, and oftentimes, it comes as a surprise to the recipients. This type of spousal support is usually paired alongside another form of the spousal support payment.
Reimbursement spousal support compensates the recipient spouse for lost employment or personal sacrifices made for the marriage.
#5. Lump-Sum Alimony (Alimony in Gross)
This type of maintenance is also called alimony in gross and it is fixed. Just as the name implies, it simply means paying for expected spousal support all at once, which works best for the payor spouse as it tends to reduce the level of dependence on him/her.
In the event of the death of the recipient spouse, spousal support can be paid to the estate of the deceased spouse.
It is also a type of reimbursement payment as it ensures that the recipient spouse is reimbursed for certain expenses during the marriage.
How Alimony Works
Alimony or spousal support can be negotiated either during the divorce proceedings with the interference of a judge or amicably by both parties, whereby the individuals involved can reach an agreement between themselves with the help of their lawyers.
Most divorce cases are settled outside the courtroom with the help of good lawyers who draw up an agreement that works best for both parties.
If both parties can’t agree, they must go to court, where a judge decides on spousal support payments.
Before awarding spousal support payments, the judge would contemplate certain factors in the divorce case some of which include:
- Their income
- Properties and assets owned by both parties.
- General health and well-being of the individuals
- The length of the Marriage
How Alimony Is Calculated
In determining how these payments are calculated, it is important to note that spousal support calculation differs from state to state. In Texas, for example, spousal support payments are determined based on the length of the marriage.
Speaking generally, how this is calculated depends on various factors which include:
- How much you both earn
- Length of the marriage
- The education of both parties
- History of adultery
- Sacrifices made by both individuals in the marriage
- How long the recipient would be needing alimony?
How Long Do You Have to Be Married to Get Alimony?
Generally, in most alimony cases, when awarding payments to the recipient spouse, spousal support tends to be awarded to individuals who have been married for 10 years or more.
The duration of the marriage as a determining factor for getting spousal support differs from state to state.
Most states don’t have time requirements on how long you must be married to collect spousal support. The judge might not award you under these circumstances:
- If we’re not married for longer
- If the recipient spouse did not make any sacrifice on behalf of the other spouse to further his/her education while He/her had to provide for the family.
- Has no issues getting a job.
Is Alimony Taxable?
As of January 1st, 2019, alimony ceased to be taxable. As provided for in section 11051 of the Tax Cut and Jobs Act ( TJCA) law relating to the taxation of spousal support and divorce proceedings, as amended.
Alimony not taxable became effective from Jan 1st, it was then flipped, it only applies to court orders or decrees made on Jan 1st, 2019.
If you finalized your divorce proceedings after Jan 1st, 2019 the TCJA would have an effect on your spousal support payments because the TCJA terminates all tax deductions on alimony payments and spousal maintenance till 2025 or until congress changes the law.
Alimony payments would not be taxable on the part of the recipient spouse, no income reporting needs for the receiving spouse, and no deductions for the payor spouse.
What Happens if the Divorce Was Modified After 2018?
If the divorce was modified on December 31st, 2018, then the new rule applies because the new terms apply to any separation agreement or divorce agreement executed in 2018 and modified in Dec 2018 provided the modification includes the following :
- Modifications of the terms and conditions of previous alimony
- The new agreements expressly state that alimony payments are not deductible on the part of the pair spouse and income taxable on the part of the receiving spouse.
Alimony in Texas
Alimony is pretty much known as “spousal maintenance” in Texas, it can be court-ordered under certain situations. In Texas law, it can be awarded if the parties have been married for 10 years or more.
The spouse demanding spousal support payments must explain in clear terms why he/she is in need of it.
It is important to note that the state of Texas is one of the most difficult states in the US to win an alimony case, but that’s not to say it is impossible to get spousal support, just ensure you have a good lawyer.
Some of the situations a judge would grant spousal support include:
- If the recipient spouse is unable to provide for himself/ herself due to disabilities ( physically and mentally)
- If the recipient spouse is the custodian of a child who requires special needs either physically or mentally and therefore is unable to work in other to provide for himself/herself.
- Being unable to earn enough to provide for his/her basic needs
How Long Does Alimony Last For?
Alimony can last for a period of 10–20 years. It all depends on how long you were married and on the type of spousal support awarded by the judge.
Those are the basics of what you need to know about alimony before going through with it. I wish you good luck.
Is alimony taxable?
Presently, Alimony is not taxable as it is no longer considered taxable income.
Can alimony be invested in IRAs?
No, alimony payments cannot be invested into IRAs, you can only invest towards retirement accounts with earned income
Is alimony possible in Texas?
Yes, getting alimony in Texas is very possible, although the process might be very cumbersome