Monday, July 16, 2018

Types of Alimony, Its Consequences and Benefits

There are several types of alimony that the court may grant to a spouse during the pendency of divorce actions as well as at the time final decision is made which the party may agree to.  These fall into the following categories:  permanent, rehabilitive, or reimbursement.
                The first is Pendente Lite, or Temporary Alimony.  These are alimony awards that are granted during the pendency of a divorce action that provides temporary financial relief to a spouse.  A court will usually make this type of temporary order of alimony only if the payor spouse is served with a notice, is physically present in court, and is given an opportunity to have his or her side heard in court.  One or both spouses have the opportunity to relinquish or waive their right to ask for alimony.  If alimony is not awarded in the original divorce decree, neither party to come back to court for a modification of alimony.  Most judges will question both spouses to determine if they have full knowledge of a waiver and its consequences, as well as the spouses' lawyers should do likewise to make sure the clients know any legal ramifications before going to court.  Either spouse has the option of asking for a nominal alimony in an amount of $1.00 per year.  This serves the purpose of allowing either party to protect his or her right to return to court in an event that there is a change in circumstances, should there be a need for alimony in the future, if there is no need for at time of pendency.
                A second type of alimony is Bridge-the-Gap Alimony.  This is a short-term lump-sum alimony awarded to a spouse that allows a spouse the opportunity to transition between married life and single status.  This is awarded based on the traditional concept of alimony where there is a need versus ability to pay.  It does not terminate upon death or remarriage.  It is designed for short-term, one-time expenses, like rental security deposit, moving expenses, buying a car to get to and from work, or for deposits for utilities, that are necessary when a spouse lacks credit of any kind.
                A third type of alimony is Permanent Alimony.  This is a court-ordered payment made to a spouse on regular, or periodic basis.  These payments usually terminate upon death, remarriage, or co-habitation of the other spouse as granted in the court order.  Permanent alimony is not usually granted today due to women being in the workforce and having marketable skills for employment that still allows them to be self-sufficient.  Spouses likely to be awarded this type of alimony are those who have been in long-term marriages, those who have difficulty obtaining marketable job skills, those with a disability, or who have trouble find suitable work  to support themselves.
                Another type of alimony is Reimbursement Alimony.  This is usually granted when a spouse obtained a professional or advanced degree during the marriage, leaving the other spouse at a disadvantage.  Most courts award this type of alimony to compensate a non-degreed spouse money or property for his or her contribution that led the other spouse to obtain a degree in order to earn a substantial income.  The non-degreed spousemay have helped pay for tuition, supported the family while the student spouse was in school, or relocated or put off his or her education in hopes of a better standard of living.  It is usually non-modifiable in order to fully compensate the non-degreed spouse for his or her contribution.
                In the event that alimony needs to be increased or decreased, the parties must go back to court.  The party seeking the modification must request the court to modify the original order.  The moving party must show proof that a substantial change occurred since the date of original order.  Permanent alimony can be modified if there is substantial change in circumstances; remarriage or co-habitation of unmarried parties who share expenses, automatically terminates permanent alimony in some jurisidictions.
                The tax consequences of alimony awarded to a spouse is considered a form of income to the spouse.  It is taxable to the recipient and a deduction to the payor.  A payor spouse who has high earnings is in an advantageous position.  It is important to have social security numbers from attorney's client no matter if they are the recipient or payor.  The recipient spouse should be reminded to pay quarterly estimated taxes in order to avoid the huge tax burden at the end of the year.
                In conclusion, the different types of alimony were created to alleviate the financial burden in the event the marriage breaks down. 
References
                Luppino, Grace A. & Miller, Justine Fitzgerald.  Family Law Practice:  The Paralegal's Guide.  Pearson Education Group, Inc.  Prentice Hall.  Upper Saddle River, NJ.  3rd Ed.

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