Spousal Support Basics

In today’s world spousal support is somewhat of a rare thing. Many people believe it is assumed, but nearly one out of six divorce cases even consider it as an option.

In the past the wife was almost always the recipient, but the courts no longer view gender as a consideration. In most states, including Arizona, marital conduct is also not a consideration. It is purely a decision made due to the economic consequences of each spouse. If an agreement between spouses is reached, the court will give it significant consideration.

Here are some of the general factors considered (ARS 25-319):

The ability and time for each spouse to gain employment;
The employability of each spouse;
The future earning capabilities of each spouse;
Who will have custody of the child (will the custodial parent be required to work);
The length of marriage;
The ability for one spouse to pay the other;
The tax consequences of each spouse;
The age of each spouse; and,
The length of time support will be needed.

There are basic requirements for support to qualify as alimony under the Tax Reform Act of 1986. Support that is considered alimony is recognized as income therefore must taken into account when filing federal income tax. Typically, the spouse who pays support may deduct the payments as an expense. There are basic requirements for support to qualify as alimony under the Tax Reform Act of 1986.

Federal legislation now requires most companies that provide employer-sponsored group health plans to give divorced spouses the same group rate for up to three years.

The Modification of Spousal Support Arrangements

Spousal support may be modified at any time in which there has been a change in circumstances. In order to have a modification take place the party moving for modification must file an order with the court. The evidence must be completely new to the court. Any issues addressed previously in the spousal support arrangements are not means for modification.

Here are some of the factors generally considered for modification:

The income of the supporting spouse;
The change in available assets;
The income of a new spouse;
The supporting spouse’s new responsibilities;
The physical or mental health of supporting spouse; and,
The death of the supporting spouse.

Spousal Support FAQ’s

What about alimony?

Spousal support, otherwise known as “alimony,” is not required in all cases, but should be considered and may even be ordered by the judge under certain circumstances.

Spousal support should be considered if the circumstances are such that a spouse will face hardships if he or she does not receive financial support. The deciding reason for spousal support is the need to maintain the spouse at his or her customary standard of living. In other words, the law recognizes that a wife (or husband) should not be forced to live at a level below that enjoyed during the marriage.

However, other factors also need to be considered. For example, spousal support should most likely not be considered if the marriage was short (under two or three years), and both spouses are self-sufficient. However, if the parties agree on support, the court is bound to accept it. However, when spousal support is not awarded in the original decree, that decree cannot later be modified to award spousal support.

Does Arizona have alimony?

Yes. Alimony or spousal support may be awarded to either spouse for their support after the divorce. Alimony payments are designed to help with financial obligations of the receiving spouse and to maintain a similar lifestyle. The lifestyle can not remain the same due to the paying spouse typically having to maintain two households for a period of time. Since a majority of spouses both work rewarding alimony is not extremely common although it does exist. Most of the time alimony is rewarded for a short period of time just to help the receiving spouse get on his or her feet again.

What is the typical duration of alimony?

Arizona, like many U.S. States uses a support payment duration test of 1/3 to 1/2 of the duration of the marriage in short and medium length marriages and a presumption of unlimited support duration in marriages of over 20 years – combined with an age test – where the payee spouse must also be over age 50. The issue of remarriage and cohabitation and the impact of same on continued spousal support will also have to be considered.

TRY THE ARIZONA CALCULATOR

We are also pleased to provide you with a comprehensive interactive guideline spousal support calculator link based on the Arizona spousal support guidelines. You will see how the amount payable on an identical income of the payor increases as the duration of the marriage increases.

Try it now>>>

How is alimony awarded?

Alimony is awarded based on one of the following situations:
1. A spouse lacks sufficient property to meet his/her reasonable needs;
2. A spouse must stay home with a young child and cannot support him/herself with reasonable employment;
3. A spouse supported his or her education; or
4. The marriage was lengthy and a spouse has little chance of finding employment.

The court considers the length of the marriage, the age of each spouse, health, employment, as well as the standard of living established during the marriage and other factors when establishing alimony.

How is spousal support or alimony paid or distributed?

There are several factors to be considered based upon the current laws:

The advantages and disadvantages of lump-sum settlement.
The amount of such payment and the method it will be paid (cash, property).
Will it be paid in installments?
Conditions attached to paying and receiving (disability, death, remarriage, cohabitation).
Terms arranged to provide enforcement measures. Tax effects of proposed arrangements.
The effects of will and inheritances.

How are support payments treated under Federal Tax rules?

Child support payments are typically not deductible from the income of the payer and are not included as taxable income to the supported spouse. Alimony or spousal support payments are tax deductible by the payer and taxable income to the supported spouse.

According to the Federal Internal Revenue Code, ” … any payment which the terms of the divorce or separation instrument fix (in terms of an amount of money or a part of the payment) as a sum which is payable for the support of children of the payer spouse” is not considered alimony or a separate maintenance payment. Thus, such payments are a tax neutral event (they are non-taxable to the person receiving them and non-deductible to the person making them).

Federal Income Tax Regulations state:

“A payment is fixed as payable for the support of a child of the payer spouse if the divorce or separation instrument specifically designates some sum or portion (which sum or portion may fluctuate) as payable for the support of a child of the payer spouse. A payment will be treated as fixed … if the payment is reduced (a) on the happening of a contingency relating to a child of the payer, or (b) at a time which can clearly be associated with such contingency. … For this purpose, a contingency relates to a child of the payer if it depends on any event relating to that child, regardless of whether such event is certain or likely to occur. Events that relate to a child of the payer include the following: the child’s attaining a specified age or income level, dying, marrying, leaving school, leaving the spouse’s household, or gaining employment.”

Thus, under Federal income tax law, regardless of the label that is used, most child support payments are a tax neutral event, while most support payments provided to the other (former) spouse are deductible to the payer and included in the taxable income of the supported spouse.

How can I obtain a tax deduction for a support payment?
In order for a support payment (other than any child support payment) to be eligible for an income tax deduction by the payer spouse, the following requirements must be met:

1. The payment must be made in cash (including checks and money orders payable on demand, but excluding transfers of services or property)

2. The payment must be made under either:

(a) a divorce or separation instrument (a court order or decree of divorce or separation or a written instrument incident to such a decree or a decree which requires a spouse to make payments for the support or maintenance of the other spouse), or
(b) a written separation agreement between a husband and wife who are living apart requiring periodic payments because of the marital or family relationship (whether or not the agreement is a legally enforceable instrument)

3. The spouses do not file a joint income tax return 4. The written instrument or agreement does not provide for other tax treatment, and
5. The payer has no liability to continue to make payment after the death of the other spouse. < />
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<>Any child support included as part of an alimony, family support, separate maintenance or spousal support payment is not eligible for a deduction by the payer and is not taxable income to the supported spouse according to Federal income tax rules.
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<>Can a court order alimony payments after divorce/separation?
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<>Yes. As part of the judgment of dissolution or legal separation, a court may order one spouse to pay the other alimony.
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<>How long will a spouse have to pay (or be able to receive) alimony?
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<>Depending on the particular circumstances, alimony is ordered to be paid during the time period that the supported spouse is seeking education, training, and marketable job skills in order to establish a career or otherwise become self-supportive. Consideration of the responsibility for providing child care during the early years of a minor child factors into this determination.
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<>If the supported spouse is of advanced age or suffers from a medical problem which would prevent this spouse from obtaining a career (thus preventing him/her from becoming self-supportive), alimony could be “permanent” (but subject to future modification based upon a material change in circumstances).
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<>If there was a long term marriage (in California, for example, a marriage of ten years or longer is considered a long term marriage), a court may have continuing jurisdiction over the issue of spousal support. With continuing jurisdiction, a court may change the amount or duration of alimony payments from one spouse to the other any time in the future (although a material change in circumstances is usually necessary).
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<>In addition, typically a court order for alimony terminates upon the death or remarriage of the supported spouse.
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<>Can medical insurance be included in alimony?
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<>Often. In a case where the supported spouse depended upon the other spouse for health insurance during the marriage and does not have sufficient means to obtain such insurance, the court may require the payer spouse to continue to provide medical insurance. Alternatively, the amount of alimony can be increased so that the supported spouse will have the ability to purchase medical insurance.
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<>It should be noted that an employer sponsored group health insurance plan can be required under Federal law to offer continuation of benefits at the group insurance rates to the supported spouse for up to three years after the marriage has ended.
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< />What if I or my former spouse remarries?

Unless each spouse agrees, in writing, that the alimony will continue after the party remarries, the support will end. Remarriage of the paying spouse will not terminate his or her obligations of support.

What if my spouse quits working to stop his or her support?

A former spouse cannot terminate his or her support by simply “quitting” their job. The court has the discretion to attribute an income to a spouse who voluntarily quits working or reduces his or her income.

What are the risks involved?

There is always some risk involved with actually getting all of the court ordered payments. The factors that often lead to these risks are:

Additional expenses from new marriage or new family.
Cohabitation.
Incapacitation through illness.
Payment withheld as punishment, due to another order violation.
Refusal to pay.

If you have questions or need assistance in obtaining spousal support or modification of an existing agreement please contact us for a free consultation.