It's a fact of life that not all marriages last forever, and most divorces don't end amicably either. Going through the process of divorce can be stressful for both parties. We're here to make it a little easier by providing necessary information to a divorcing couple, as each party will inevitably come across matters involving different types of alimony.

What Is Alimony?

The word “alimony” was derived from the Latin word alimonia which means nourishment or sustenance. To put it succinctly, alimony is a legal obligation for a “supporting spouse” to provide financial support to a “dependent spouse” before, during, or after a divorce or a marital separation for a determined length of time.

This spousal financial support is either paid on a continuing basis or as a lump-sum payment, depending on what was mutually agreed upon by both parties outside of a court or on the court's decision, if both parties could not agree on the terms.

Besides monetary support, alimony may also include a transfer of title or possession of personal property or a security interest in or possession of real property.

Alimony should not be misconstrued as child support. It is a financial remedy which addresses the needs of the spouse with the lower income exclusively.

What Qualifies a Recipient Spouse for Alimony?

As a general rule, a supporting spouse has a higher income between the couple while the dependent spouse is substantially reliant on the higher-earning spouse for maintenance and support. This is to enable the dependent spouse to maintain the same standard of living he or she experienced during the marriage while he or she is still in the process of finding a means to become self-sufficient.

Alimony is typically granted to a dependent spouse who was married to the supporting spouse for a considerable number of years. The length of marriage needs to meet the minimum requirement of 5 years in order for a spouse to qualify for alimony.

There are sixteen statutory factors that the court needs to consider in terms of support determination:

  •  The marital misconduct of either spouse
  •  The relative earnings and earning capacities of each spouse
  •  Age, mental, emotional and physical conditions of both parties
  • The amount and sources of earned and unearned income of both spouses (i.e. earnings, dividends and benefits such as medical, retirement,     insurance, social security, and others)
  •  Duration of the marriage
  •  Contributions made by one spouse for the education, training, or increased earning power of the other spouse
  •  The extent of which the earning power, expenses, financial obligations of a spouse will be affected by childcare
  •  Standard of living established by both spouses during the marriage
  • The relative education of both spouses and the time needed to acquire sufficient training or education for the spouse seeking alimony to find employment     and become self-sufficient
  •  Relative assets and liabilities of both spouses and relative debt service requirements including legal obligations of support
  •  Property brought to the marriage by either spouse
  •  Contributions made by a spouse as a homemaker
  •  Relative needs of both spouses
  •  Federal, state, and local tax ramifications of being awarded alimony
  •  Any other factor related to the economic circumstances of both parties that the court deems to be just and proper
  • The fact that income received by either party was previously considered by the court in determining the value of a marital or divisible asset in an equitable distribution of the parties' marital or divisible property

Another important consideration in determining the types of alimony to be awarded will be if either spouse committed adultery during the marriage as well as the circumstances that surround the act. Adultery may be taken into account if the spouse's affair caused financial harm to the other spouse. If the dependent spouse commits adultery prior to the issuance of a final order or the formal signing of a marital settlement agreement, he or she will not be awarded alimony.

Additionally, the court may also decide not to award alimony if the paying spouse's net income will become significantly less than the recipient's.

What Qualifies as Alimony?

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To be considered as spousal support or alimony, the following conditions need to be met:

  • Payments made should be in the form of cash or checks. Debt payment and assets are not considered as payments for spousal support.
  • Alimony payments cannot be paid when both spouses are still residing together.
  •  Alimony cannot be claimed for years when both parties filed joint tax returns.
  • Payments must be specified in a divorce or written agreement.
  • Payments made prior to a written agreement will not be considered as alimony.

What Are the Different Types of Alimony?

In order to come up with an amicable settlement or to gain a better understanding of how a court or judge decides on matters pertaining to alimony, it is important for any divorcing couple to know the different types of alimony.

Lump-Sum Alimony

Bridge-The-Gap Alimony

Separation Alimony

Temporary Alimony

Rehabilitative Alimony

Durational Alimony

Reimbursement Alimony

Permanent Alimony

Conclusion

There are several types of alimony that may be granted by a court, depending on the determination made after a spousal support analysis. As enumerated in G.S. 50-16.3A (b): “The court shall exercise its discretion in determining the amount, duration, and manner of payment of alimony. The duration of the award may be for a specified or for an indefinite term.”

However, regardless of which type of alimony will be determined as appropriate, the recipient spouse will be responsible for paying taxes on the alimony received while the supporting spouse will be entitled to tax deductions for alimony payments made. A lump-sum payment will be regarded by the IRS as property distribution, thus there will be no tax consequences for either party.

Additionally, divorcing couples should also take note of the types of alimony that are modifiable by the court when exceptional circumstances occur, as it may impact either spouse financially.

Featured Image by Steve Buissinne from Pixabay

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