What is Spousal Maintenance?
Spousal maintenance, commonly known as “alimony," involves one spouse making support payments to the other spouse for a period of time. There are a number of reasons spousal maintenance might be awarded.
Consider a married couple who has children and decides that the husband should stay home to raise the children. By doing so, the husband gives up his career advancement, and simultaneously assists in his wife’s career advancement by making it possible for her to continue working. If the couple then decides to divorce, the husband may not be able to support himself. An award of spousal maintenance may be appropriate to provide support to the husband as he tries to re-enter the workforce, or while he gets additional education that may be necessary for him to re-enter the workforce.
How is Spousal Maintenance Calculated?
Unlike child support, there is no spousal maintenance calculator. As a result, spousal maintenance awards can be unpredictable, and can vary widely depending on the facts and the court.
Before deciding on a spousal maintenance amount, the court must first decide whether or not a spouse should even receive any spousal maintenance. The court looks at 4 factors found in A.R.S. 25-319(A) to determine if a spousal maintenance award is appropriate:
- Does the spouse lack sufficient property to provide for that spouse’s reasonable needs?
- If the spouse unable to be self-sufficient through reasonable employment, or is the spouse the custodian of a child whose age or condition precludes employment, or does the spouse lack earning ability in the labor market to be self-sufficient?
- Did the spouse contribute to the educational opportunities of the other spouse?
- Was it a long marriage and is the spouse of an age that precludes employment that would make the spouse self-sufficient?
If the court decides that a spouse is entitled to spousal maintenance, the court then looks at an additional 13 factors found in A.R.S. 28-319(B) to determine how much should be paid in spousal maintenance and for how long:
- The standard of living established during the marriage.
- The duration of the marriage.
- The age, employment history, earning ability and physical and emotional condition of the spouse seeking maintenance.
- The ability of the spouse from whom maintenance is sought to meet that spouse’s needs while meeting those of the spouse seeking maintenance.
- The comparative financial resources of the spouses, including their comparative earning abilities in the labor market.
- The contribution of the spouse seeking maintenance to the earning ability of the other spouse.
- The extent to which the spouse seeking maintenance has reduced that spouse’s income or career opportunities for the benefit of the other spouse.
- The ability of both parties after the dissolution to contribute to the future educational costs of their mutual children.
- The financial resources of the party seeking maintenance, including marital property apportioned to that spouse, and that spouse’s ability to meet that spouse’s own needs independently.
- The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment and whether such education or training is readily available.
- Excessive or abnormal expenditures, destruction, concealment or fraudulent disposition of community, joint tenancy and other property held in common.
- The cost for the spouse who is seeking maintenance to obtain health insurance and the reduction in the cost of health insurance for the spouse from whom maintenance is sought if the spouse from whom maintenance is sought is able to convert family health insurance to employee health insurance after the marriage is dissolved.
- All actual damages and judgments from conduct that results in criminal conviction of either spouse in which the other spouse or child was the victim.
Subjective Factoral Test
Something to keep in mind, is that the above test is factoral, meaning that each of the factors are weighed by the judge. Ultimately, if the case is going to trial, the judge has to make a call on all of those factors. Because there are so many, this test can be very subjective. Indeed an award of spousal maintenance can vary wildly in amount and duration from judge to judge. Because of that, it's important to carefully consider whether or not it makes sense to go to trial over a spousal maintenance issue. Settling with the other side can eliminate this random element that occurs if you have to go to trial. However, that settlement must make sense. If the settlement offers are unreasonable, then it may be necessary to litigate the issue.
Modification
Once a spousal maintenance order has been entered, it can generally be modified at a later date. In order to modify it, the party seeking a change must file a Petition with the court asking for modification. The petition must demonstrate that there is a substantial and continuing change in circumstances. A.R.S. 25-327(A). In other words, something must be very different from what was going on at the time the original spousal maintenance order was entered. If that initial substantial and continuing change threshold is satisfied, then the test above is used to assess how the spousal maintenance should be changed.
Note that there is one exception to this ability to modify spousal maintenance. If the parties came to an agreement for the original spousal maintenance order and they wrote in the agreement that the order was "non-modifable," then it cannot be changed at all. A.R.S. 25-319(C).
Spousal maintenance can have serious implications. If you have any questions about spousal maintenance issues in your case, you should contact an attorney that practices family law and get some guidance.
Taxation
Historically, taxation has been a major consideration in looking at spousal maintenance. If you have an order for spousal maintenance that was entered on December 31, 2018 or earlier, then you will receive be able to deduct on your taxes, spousal maintenance you paid. If you are the person receiving spousal maintenance, then you must account for it as income for tax purposes.
Under the Tax Cuts and Jobs Act, effective January 1, 2019, this system goes away if you have an order for spousal maintenance after that date. In other words, there will be no offset for either party for spousal maintenance from that date on.
Note that if you have an order that was entered on or before December 31, 2018, but modify it at any time after that date, you will still receive the tax benefit if you are the person paying or the tax liability if you are the recipient unless the new order modifying spousal maintenance expressly states that it's following the new tax system.