Alimony (called “spousal support” in California) is one of the two areas of financial decision-making required in every divorce. The other is division of assets and debts. If there is alimony, it will nearly always be paid by the higher wage earner for a set or modifiable period of time.
Alimony – Temporary and “Permanent”
There are two types of alimony: “temporary” which applies until the divorce is finalized and “permanent” which applies after the divorce. “Permanent” spousal support is rarely permanent.
The purpose of “temporary” alimony is to try to help each spouse maintain the marital standard of living until the divorce is completed. Realistically, there is not often enough income between the spouses to accomplish this fully. There are formulas that vary by county that California judges normally use to calculate temporary alimony, although the resulting figure is just advisory. For Los Angeles and Orange Counties, the figure can be up to 40% of the payer’s net monthly income, reduced by one-half of the receiver’s net monthly income. However, if there is also child support, it will be calculated first and it will reduce the amount of temporary spousal support.
“Permanent” alimony is more complex and there is no formula for calculating it. Judges are required to weigh 14 factors when deciding how much to award. These include the length of the marriage, the incomes of the spouses and the aim that the supported spouse will become self-supporting in a reasonable period of time. Permanent spousal support when decided by a judge is usually somewhat less than temporary spousal support. For marriages less than ten years in duration, judges normally don’t order alimony for more than half the length of the marriage. In general, it is hard to predict the amount of a judge’s award of permanent spousal support.
Alimony is usually the last area to be decided in a divorce, whether inside or outside of court. This is because the co-parenting plan affects the amount of child support and the amount of child support usually affects the amount of spousal support. The division of assets and debts can also affect spousal support. Alimony is often contentious. It continues to bind the couple and the payer usually perceives it as a burden. Many couples therefore benefit from outside assistance such as mediation.
It is possible to develop creative solutions such as lump sum payments, step-down payments which reduce over time, paying specific monthly bills of the recipient, tying the amount or duration to specific future event(s), etc. You can come to your own agreement and the court will rarely question it. Often it’s made more palatable to the payer by designating a fixed amount to be paid over a fixed period of time and removing any possibility of this being modified or extended. Sometimes there is no spousal support to be paid.
Alimony and Tax
Spousal support no longer receives special federal income tax treatment. It is not tax-deductible for the payer and it’s not taxable income for the recipient. In some states, including California, for state income tax purposes spousal support received is still taxable income and and spousal support paid can be deducted.