A spouse who needs financial assistance after a divorce may, under certain circumstances, receive “alimony” from the spouse who has the ability to pay.  Alimony is intended to preserve the economic status for both parties as it existed during the marriage.  Payments can be made in a lump sum amount (alimony in gross) or in periodic payments for a determined amount of time.  Rehabilitative alimony is sometimes awarded for a short period (e.g., 2 or 3 years) and is designed to help a spouse transition back into the job market.   

Alimony in gross gives a present value to a spouse’s rights to alimony and is similar to a division of property.  Alimony in gross cannot be modified after 30 days from the final divorce decree being entered and remarriage of the receiving party does not entitle the paying party to reimbursement.  Additionally, the court does not have to consider the receiving party’s separate estate in determining the amount and the lump sum payment may be nontaxable. 

Periodic alimony payments are made over time and differ from alimony in gross in several ways.  First, the amount can be modified upon a showing of a material change in circumstances for either party after the divorce.  Second, periodic alimony terminate upon remarriage or cohabitation of the receiving party or upon death of either party.  Finally, periodic alimony is a tax deduction for the paying spouse and income for the receiving spouse. 

Factors Considered
An award of alimony in Alabama is competely discretionary with the court.  It is awarded only upon a showing of need by one spouse coupled with a showing of ability to pay by the other spouse.  Unlike child support, there is no statutory formula to determine the amount or if any award will be made at all.  In making its determination, the court will consider the following:

• The length of the marriage (rarely awarded in marriages of less than 12 years and generally reserved where one spouse has been dependent upon the other for most of the marriage);
• Each party’s respective earning ability and future earning prospects;
• The ages and health of each party;
• The value and type of property owned by the parties;
• Conduct of the parties during the marriage (misconduct, such as infidelity, can be considered in determining whether to award alimony and how much to award);
• Any other factors the court deems relevant.

Cohabitation

In Alabama, periodic alimony is (for the most part) subject to termination upon proof that “the spouse receiving such alimony has remarried or that such spouse is living openly or cohabiting with a member of the opposite sex.”  Ala. Code § 30-2-55 (1975).  The question of whether a former spouse is living openly or cohabiting with a member of the opposite sex is a factual determination, which means evidence must be presented to the court and the court makes the final determination.  Factors to consider when determining whether a former spouse is cohabiting with a member of the opposite sex include, but are not limited to, the following:

• Permanency of relationship coupled with more than occasional sexual activity;
• Payment of debts by former spouse’s cohabitant;
• Purchase of clothes for former spouse by cohabitant;
• Whether the alleged cohabitant maintains the former spouse’s household by cleaning, cooking, washing and yardwork;
• Receipt of mail by alleged cohabitant at former spouse’s residence;
• Keeping clothes and other personal items at former spouse’s residence; and
• Using the address for identification purposes.

In cases where the former spouse merely has a roommate of the opposite sex who pays rent and there is no evidence of sexual activity between the two, proof of cohabitation probably does not exist.

 

Former Spouse Becomes Self Supporting

If the former spouse becomes self-supporting with income and estate as great or greater than the paying spouse, alimony may be terminated, but proof of such does not mandate termination.

 

Modification of Alimony Amount

Upon the happening of a material change in circumstances of one or both parties after the divorce, periodic alimony may be modified.  The burden of proving the material change is on the Petitioner and factors to be considered include, but are not limited to, the following:

• The remarriage of the paying spouse;
• The receiving spouse’s employment since the divorce;
• The financial status and needs of the receiving spouse;
• Whether the receiving spouse is presently capable of self-support;
• The ability of the paying spouse to respond to the former spouse’s financial needs;
• Whether there are dependent children;
• Whether alimony was originally agreed upon;
• Whether there has been a material change in the financial situation of either, or both, of the parties;
• The health, age, and education of the parties, the earning ability of the parties and their probable future prospects, the duration of the marriage, the conduct of the parties with particular reference to the cause of the divorce;
• The length of time separating the initial alimony award and the modification hearing; and,
• Any other material and relevant circumstances as disclosed by the evidence in a particular case.   

Not every one of the above factors are of equal importance and each case is decided on its own facts.  It is important to note that in a situation where the payor of periodic alimony files a petition to modify or terminate alimony and the recipient makes no request for an increase, the fact that the recipient is unemployed or underemployed is irrelevant.

Bankruptcy
Under the federal bankruptcy code, alimony is non-dischargeable.  This means that if the paying party files bankruptcy, alimony payments must still be made.

Check back soon for information on dividing retirement benefits.

 

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With the recent economy, it’s not surprising that parents having to pay child support may be in a bind.  According to the New York Times, courtrooms all across the country are filled with paying parents, pinched by the recession, pleading for a reduction in child support.  Read the full article here. 

Unfortunately, parents in Alabama are feeling the crunch too.  It may be possible to get a temporary reduction in child support payments if you have documentation to support such a request.  Only in exigent circumstances should such a request be made though, and only after all other avenues of saving money have been exhausted.  The recession should not be used as an excuse to reduce child support payments if there are other material things that can be given up in order to provide for your child.  Give me a call if you would like to discuss your options.

Alabama is an “equitable distribution” state rather than a “community property” state.  This means that property is divided depending on several subjective factors rather than each party receiving a 50-50 split of property.  The equitable distribution method is more flexible than other methods but makes it harder to determine who will receive what since the various factors are weighed subjectively.  The following is a list of factors generally considered by the court to help determine property distribution:

1. Earning Power of the Parties – one spouse may make significantly more money than the other and, thus, will be in a better position post divorce to re-accumulate property.
2. Work to Acquire the Property – one spouse may have contributed significantly more work in acquiring the property and, thus, should be given a greater share of said property.
3. Value of Homemaker – one spouse may have contributed significantly more as a homemaker, which allowed the other spouse to contribute more monetarily.  The homemaker should be given credit for such.
4. Economic Fault – if a spouse is found to have “wasted” or “dissipated” marital property in an effort to ensure the other spouse does not receive anything, the faulty spouse may have to reimburse (so to speak) the non-faulty spouse.
5. Duration of Marriage – the longer the marriage, the more likely each party is to receive a more equal (50/50) split of the property.
6. Age and Health – the court will consider each parties ability to earn a living and acquire property AFTER the divorce.
7. Children – consideration is given to the party who will be responsible for providing for the children of the marriage.  For example, the custodial parent may be granted the marital house to provide stability for the children.
8. Abuse or Infidility – a spouse who has committed abuse or adultery may be “punished” for such acts by receiving less of the marital estate.

The factors above are just examples of some factors considered by the court when distributing property in Alabama.  Generally, the court looks at the financial state each party will be in after the divorce when determining how to divide property.  Although the equitable distribution method makes it harder to determine who will receive what, the parties are free to negotiate prior to a judge hearing the case.  If the parties can’t decide on the division of all property, the court can distribute the remaining items later.

1. Having Unrealistic Expectations.  The combined income that used to support one household will now need to support two.  It is not uncommon that money becomes tight during the divorce.  Both parties should understand that their pre-divorce lifestyle may not continue after the divorce (or, at least during the divorce).  Try to be realistic and give the process time to work.
2. Fighting for the Sake of Fighting.  It is much better to be reasonable during the divorce process.  Getting into endless battles over issues that are irrelevant only works to lengthen the process and make it more expensive.  Additionally, children are often placed in the middle of these issues, which is strongly discouraged.  Keep the important issues at the forefront and let the others go.
3. Discussing Finances with Children.  The non-custodial parent should never ask the children how child support is being spent.  Nor should the custodial parent complain to the children that child support is not being timely made.  These issues are best left for discussion between the adults. 
4. Discussing the Divorce with Children.  In addition to not discussing finances with the children, the parties should refrain from blaming each other or from speaking disparingly about each other in front of the children.  Divorce is a difficult time and children should not be put in the “role” of a parent by having to needlessly deal with the  details and frustrations of the divorce.  Remember, the children love both parents and are entitled to a relationship with both parents. 
5. Dating Too Soon After Divorce.  Children need time to adjust to divorce.  So does the ex-spouse.  Be very careful when introducting new people into the children’s lives and understand that it may take them awhile to accept anyone new in the role of the non-custodial parent.