WHAT IS ALIMONY?
Alimony is where one spouse is court-ordered to pay another spouse financial compensation upon the ending of the marriage. Alimony is referred to as spousal maintenance or simply “ maintenance.” In this article we will use the terms interchangeably with one another.
Spousal maintenance is most often ordered in cases with longer duration marriages. It can also apply to shorter term marriages. If you are seeking divorce in the state of Kentucky, this article will help you to gain a basic understanding of how spousal maintenance works. To best understand how it will apply to your individual situation, contact Jackson Family Law for a consultation.
TYPES OF MAINTENANCE
In Kentucky, there are several types of maintenance that could be granted by the court. We will outline each type of maintenance below.
Temporary maintenance is maintenance that is awarded to cover the period of time prior to the divorce being finalized. Temporary maintenance payments end upon the finalization of the divorce. The purpose of temporary maintenance is to maintain the financial status quo between couples while the divorce is pending.
Post-divorce or post-dissolution maintenance is maintenance to be paid after the ending of the marriage. This type of maintenance falls into two types. Permanent maintenance and rehabilitative maintenance.
Permanent maintenance is rare and is generally awarded when spouses were in a long-term marriage. For permanent maintenance to be ordered, there generally is a significant disparity in the financial circumstances of the spouses. In these cases the receiving spouse generally earns significantly less income than the other spouse and/or has other circumstances (medical or otherwise) that prevent the former spouse from earning a level of income that allows them a sufficient standard of living.
Rehabilitative maintenance is temporary in nature and usually more associated with short-term marriages. With rehabilitative maintenance, a spouse may be granted maintenance as a way to assist the receiving spouse with time to obtain suitable employment or training and education.
CAN MAINTENANCE BE MODIFIED?
Yes, maintenance can be modified. There is a burden on the party that is seeking the modification. Either spouse may request that a Kentucky court increase or decrease the amount of maintenance. Modifications to spousal maintenance require that the party seeking the modification show a change of circumstances that is “so substantial and continuing” to make the current spousal maintenance order to be “unconscionable.” Such changes could include loss of employment or a significant medical issue that impacts the ability of a spouse to work.
SPOUSAL MAINTENANCE IN KENTUCKY
In Kentucky, there is not a formula for determining spousal maintenance and marital fault is not considered in determining whether spousal maintenance is awarded. A judge does have discretion on determining whether marital fault should impact the amount and/or duration of the spousal maintenance.
There are several statutory considerations that the courts in Kentucky consider when determining spousal maintenance. These considerations include:
- Financial Resources. When examining financial resources, the courts will consider the financial resources of the party seeking maintenance. These financial resources include marital property they have received, their ability to meet their needs independently, and any provisions for child support that have been granted.
- Employment Considerations. In Kentucky, the courts will consider whether the spouse requesting maintenance has sought positions in line with their training or education. Another consideration would be whether the requesting spouse contributed to the paying spouse’s high earning capacity. Any intentional reduction of employment income would also be considered.
- Standard of living. The standard of living established during the marriage will also be considered. The court will consider the ability of the paying spouse to continue supporting this standard of living for the requesting spouse after the marriage.
- Duration of the marriage. In divorce cases with longer marriages, it is more common for spousal maintenance to be considered.
- Age, physical and emotional condition of the spouse seeking maintenance
- Ability of the paying spouse to meet their own needs. Ability of the spouse from whom maintenance is being sought to meet their own needs along with any other court-ordered obligations they may have.
CAN ALIMONY BE AVOIDED?
Yes. With a prenuptial agreement, non-payment of alimony can be defined as a term of the prenuptial agreement.
How are alimony payments taxed?
Due to recent changes in tax laws, the answer to this question depends on when a divorce was finalized. The Tax Cuts and Jobs Act of 2018 introduced new tax rules for how spousal maintenance is taxed. The new tax laws went into effect in January 1, of 2019. The details related to spousal maintenance are outlined in IRS Topic 452 Alimony and Separate Maintenance. A quick summary of how spousal maintenance is handled under the new law is provided here:
- Spousal maintenance payments are no longer tax deductible.
- Spousal payments received are no longer included as taxable income.
- Divorces finalized on or before December 31, 2018 are taxed according to the previous tax law.
How is Alimony different from child support?
Determination. Child support responsibilities are determined first and the first payment responsibility. What this means is that the amount of alimony to be paid will be impacted by child support payments already determined and the ability of the paying spouse to make spousal maintenance payments. Further, once spousal maintenance is determined, there is an income shift that will then re-determine the child support amount to take into account this income shift.
Payment. Alimony is paid separately from child support. While alimony is done through direct payment from one spouse to another, child support typically occurs through wage withholding.
Modifications. Modifications simply means whether an agreement can be modified at a later date after the original determination. While child support is always open to modification, Alimony can be made non-modifiable by agreement.