Alimony, also known as “spousal support,” is the onetime or periodic payment of money or property to equalize assets following a divorce. These payments often prove necessary to protect the other party going forward after the dissolution of a marriage. Going over what to know about alimony payments and what to expect may help you with your divorce settlement—or lead you to rethink things altogether.
It’s Not Automatic
Simply having been married does not intrinsically entitle a spouse to alimony after divorce. Many factors go into determining the amount of alimony and whether a spouse has to pay it at all. Marriages that end almost as quickly as they begin will scarcely qualify for alimony—traditionally, a couple must have stayed married for at least a year. Additionally, judges will look for a considerable discrepancy in earning power between spouses. If one spouse desperately needs the money and the other has the capacity to assist, you can expect alimony to come into play.
You Can’t Plan Ahead for Them
Prenuptial agreements can cover a lot of ground, but alimony is one piece of ground they don’t cover. Some clever drafters of prenups may try to cheat a future spouse out of alimony by preemptively stipulating low payments or no payments at all. This won’t pass muster with a judge, who must approve all prenuptial agreements before they become legally binding.
You May Not Need To Have Been Married
1976’s Marvin v. Marvin was not an award-winning motion picture but a piece of Hollywood high drama all the same. It concerned the actor Lee Marvin and his longtime live-in girlfriend, Michelle Triola Marvin, who legally changed her name despite never formally marrying. Upon the collapse of their relationship, Triola Marvin sued for financial redress, claiming that she was nonetheless entitled to 50 percent of their property. While Triola Marvin technically lost the landmark case, it did introduce the concept of “palimony,” or payments made after long-term cohabitation. Today, Florida and most of the states in the Western and mid-Atlantic U.S. recognize palimony claims.
The Tax Burden Is on the Payer
2017 marked a major change in what to know about alimony payments—one that some people may have missed. Until the 2017 tax code revisions, alimony payments were tax-deductible while being taxable income for the recipient. As of 2019, however, the calculus has been inverted. Instead, income is taxed before being paid as alimony, while the recipient enjoys tax-free income. What was once a generous tax break for a difficult situation is gone, arguably incentivizing couples to stay together.