How is Spousal Support Calculated?

March 29, 2021

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Popularly known as alimony, spousal support is financial assistance to the former partner, determined by a divorce decree. Yes, divorce means the end of the marriage; but it doesn’t mean you have no obligations towards the spouse. The support is recognized as a way to monetarily back the former partner to achieve financial independence. The alimony is applicable if you are legally married, and rules vary as per the state. The court can award spousal alimony, depending upon a myriad of factors as follows:-

  • Marriage Duration
  • Earning Capacity of Each Parent
  • Contribution to Household or Career
  • Recipient Physical Health

The alimony can be paid lump-sum on a one-go or monthly basis. The court has the final verdict on how much and how long the financial assistance must be provided. 

What Is Lump-Sum Alimony?

It is one-time support, fixed payment in lieu of a property settlement. The lump-sum is equal to the number of future monthly payments.

What is Permanent Alimony?

The spousal support continues until the payer remarries or the payee dies. In some states, the permanent alimony is suspended in case the partner enters a new live-in relationship. The court will reconsider if the partner is receiving support from a third-party source. 

Moreover, the permanent spousal support can be adjusted anytime, following the various circumstances, such as the recipient bagging a high-paying job, winning a major lottery,  incurring medical expenses — not covered by insurance. 

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The alimony can also be reconsidered if the paying spouse undergoes a significant financial setback, loss of a job, or retirement. 

What Is Temporary Alimony?

Temporary spousal support is asked by the court to pay to the dependent partner if the couple is not living together, and divorce is not yet final. As with permanent alimony, the temporary spousal support can be adjusted. 

Short-Term and Rehabilitative Support

The court might order short-term financial support to one partner if the marriage didn’t last for long. The support is only for the first couple of years, and its precise ending date is according to the final court judgment. This type of support gives the dependent party the breathing space to find a new income source to live independently with dignity. It lasts until the recipient gets a satisfactory job.

Reimbursement Support

It is a type of spousal support that is not dependent on financial needs. Instead, it is a means to compensate the spouse for their contribution towards the marriage —  sacrificed education, training, or career advancement, while the other spouse trained for a professional career. 

Tax Consequences of Spousal Support

Generally, spousal support is not subjected to any taxes. However, voluntary payments given by one parent to another is not tax-deductible. The non-cash transfer of the property is not typically considered under the alimony. 

However, it is highly recommended that you speak to a specialized financial export to assist you with the alimony’s tax consequences. 

Child Support

One partner can order spousal support and child support at the very same time. These types of support vary from one another. Both the support goes to the partner taking care of the child. 

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In the end, individuals who need more information about paying or receiving spousal support to discuss their rights, responsibilities, and options with a family lawyer.