Divorce: A Survival Guide by Dianne R. Ophelia
III. Spousal Support
- Will I Receive Spousal Support?
- Are There Different Types of Spousal Support Orders?
- How Long Will Spousal Support Last?
- Will I Be Covered By My Spouses Health Insurance?
- Can I Ask The Court To Reduce Or Terminate Spousal Support?
- Taxes And Support
1. Will I Receive Spousal Support?
Spousal support is another term for alimony. To make the following spousal support discussions
more understandable, I will refer to the party who is paying support as Spouse A and the party
who is receiving support as Spouse B.
If you have no income or your income is lower than your spouse’s, the court will most likely
order your spouse to pay spousal support. The California Law provides a formula for temporary
spousal support just as it does for child support. This is referred to as “guideline spousal
support.” The same computer software is used for both child support and spousal support. Most
courts focus primarily on the “guideline” at the first hearing in your case. They are also to
consider your expenses and standard of living when making the determination.
This “temporary” spousal support award is set at the beginning of your case and continues until
the final stages of your divorce when you divide the assets and debts. The court will then determine
a “permanent” spousal support award.
The court cannot use the State Guideline or computer software when determining permanent support.
There are a series of factors that must be considered under California Law when setting permanent
support. The court looks at the earning capacity of each spouse and whether it is sufficient to
allow him or her a similar standard of living as that experienced during the mar¬riage. They consider
the following factors:
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The marketable skills, job market, time and money required for Spouse B to obtain education or
training to develop those skills or new more marketable skills.
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If Spouse B’s present or future earning ability was impaired because of unemployment during
the marriage in order to take care of the household.
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If Spouse B helped Spouse A to obtain an education, training, career position or license.
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The ability of Spouse A to pay support, considering earnings, earning ability, assets and
standard of living.
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The needs of each party based on the standard of living during the marriage.
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The obligations and assets (including separate property) of each spouse.
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The duration of the marriage.
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The ability of Spouse B to be employed without unduly interfering with the interests of
dependant children in that spouse’s custody.
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The age and health of the parries.
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Any history of domestic violence and the emotional impact upon a spouse as a result. If the
spouse requesting support has been convicted of abuse, a spousal support award may be
eliminated or reduced.
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The tax consequences of payment of support (remember spousal support payments are included as
income for tax purposes of Spouse B and are deductible by Spouse A).
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The hardships to either party as a result of the support order are to be balanced.
If requested by either party, the court must make findings, explaining how it considered each
factor set forth above when determining the permanent support award.
2. Are There Different Types of Spousal Support Orders?
A “temporary” spousal support award is an order for payment of monthly spousal support from
the beginning of your case until you divide your assets and debts at the end of your case. The
court enters an order for “permanent” spousal support at the end of your case.
Often, the permanent award is less than the temporary award. The court assumes that between the
rime of separation and the final divorce, a spouse has had time to either obtain employment or
enter into an educational program leading to employment. They also assume that each party has
adjusted their expenses and standard of living to a certain extent, knowing that there is less
money to go around with the expenses of two households as opposed to one.
Sometimes parties will agree to a “step down” award. This means that a certain level of support
will be paid for a certain number of months or years, and the monthly amount is reduced at
predefined dates. For example, spousal support may be $800.00 per month for 18 months, then
$600.00 per month for 12 months, $400.00 per month for 12 months and zero after that.
If you both agree, spousal support can be made non-modifiable. Both the amount to be paid and/or the
length of time spousal support is paid may be made non-modifiable. The advantage of this type of order
is that it gives predictability to both of you. The disadvantage, of course, is that if an unforeseen
event occurs, the money stays the same.
Unless you agree otherwise, the amount of spousal support is modifiable and can be changed or
terminated at a later date by the court under appropriate circumstances.
Another option some people like to consider is a “buy out” of spousal support. This means that
Spouse A would pay a lump sum of money to Spouse B and in consideration of that lump sum of money,
Spouse B waives the right to receive spousal support forever. This situation is risky for Spouse
B since he or she doesn’t know what the future holds, and once the money is gone, there is no
going back for more support. It is also risky for Spouse A because if Spouse B remarries quickly,
he or she has just paid a lot of money that otherwise would not have had to be paid since support
ceases upon remarriage. Still, many opt for this type of order because they like the finality and
are able to go on with their lives independent of the other spouse.
3. How Long Will Spousal Support Last?
Both the amount of the permanent spousal support award and how long it will be paid will vary from
Judge to Judge. The trial Judge has wide discretion in this area and it seems almost every Judge has
a different point of view.
It is the policy of the State of California that every person should be employed and self-supporting
to the extent possible for that person. California Law states that the supported party shall be
self-supporting within a reasonable period of time. Except in the case of a long term marriage
(10 years or longer), a reasonable period of time is defined as one-half of the length of the marriage.
The law provides, however, that the court may order support for a longer or shorter period of time,
depending upon the facts of the case.
Judges around the State strongly encourage unemployed or underemployed spouses to become fully
employed to the best of their ability. If this means obtaining an education or training, that
spouse is expected to immediately pursue the education and/or employment. This is very difficult
for spouses who have not worked outside of the home and are experiencing the trauma of divorce.
If your marriage is less than ten years and both spouses are of working age and in good health,
the court generally will set a date when the court jurisdiction to award support will terminate.
No further support can be ordered after that date (the longest date is usually at the end of one-half
of the length of the marriage).
If your marriage is over ten years, often the court will not set a termination date unless the parties
agree to one. The spousal support order or at least the right to ask for spousal support may continue
until the death of either party, remarriage of the supported spouse or further order of the court.
The court may at some point enter an order that the monthly support will be reduced to “zero” and be
“reserved” thereafter until the death of either party, remarriage of the supported spouse, or further
order of the court. This means that the recipient spouse can come back to court at a later time and
ask for support if there is a change of circumstances warranting a reinstatement of the support award,
i.e., disability, loss of job through no fault of their own, etc.
4. Will I Be Covered By My Spouses Health Insurance?
If your spouse has health insurance available through his or her employment, he or she must continue
to maintain you on the insurance during your divorce action.
After you are divorced, however, your spouse cannot maintain the same insurance coverage for you because
you are no longer a dependent. Therefore, if you are covered by your spouse’s insurance, it is important
to look into options for health insurance coverage for yourself before your divorce is over. In many cases,
your spouse’s employer must offer health insurance to you after the divorce for 18 to 36 months (known
as COBRA coverage); however, normally the premiums are very expensive.
If you are entitled to spousal support, the court could order your spouse to assist you with payment
of private medical insurance premiums as well. In most cases, however, you are responsible for your
own uncovered medical costs both during and after the divorce.
If you cannot qualify for insurance due to health reasons, in cases where insurance is essential,
another method to keep you insured under your spouse’s policy is to agree to resolve all of the
issues of the divorce other than “status.” A written agreement, which can be incorporated into a
Court Order, can resolve all issues in the case (i.e., custody, support and division of property),
yet leave open the issue of “status.” This means that your case is finished except you will not be
free to remarry until a Judgment granting the divorce itself is entered at a later date. If neither
you nor your spouse are in a hurry to remarry, sometimes this can be the only way to avoid the loss
of insurance in a difficult situation; however, it requires both parties’ agreement and cooperation.
The court will grant the divorce if requested by either party.
5. Can I Ask The Court To Reduce Or Terminate Spousal Support
If the court orders that monthly support be paid until remarriage, death or further order of the court,
Spouse A may come back to court every few years to ask the court to review, reduce or terminate the
support order. A reduction or termination can be obtained based upon new circumstances of the parties;
for example, the supported spouse is making more money, or has had time to obtain the education and
training to earn more but has refused to do so, or spousal support has been paid for one-half of the
length of the marriage or other relevant factors. Many times with a long-term marriage, Spouse A has
to come back to court several times to eventually end the support award.
It is important to have a “warning” included in any spousal support order directing the supported
spouse to seek education, training or employment. This is called a “Gavron Warning.” Otherwise,
Spouse A may be out of luck when returning to court because Spouse B can take the position that
he or she didn’t know they had to pursue an education or work, and support should never be
reduced or terminated.
The amount of spousal support is based upon your standard of living during your marriage. If
Spouse A’s income increases dramatically after the divorce, the court is supposed to look only
at needs based upon the standard of living during the marriage and is not to consider Spouse
A’s new standard of living post-divorce.
Remember, if you and your spouse make any agreements changing a support order, be sure to put
it in writing and file it with the court. Many cases exist in which one spouse thought he or
she had an agreement to reduce or terminate support, only to find out that the other spouse
later states there was no agreement. One may face a Judgment for thousands of dollars in back
support plus interest on those arrears at 10% per annum unless changes to the order are made in
writing.
6. Taxes And Support
Taxes impact divorce settlements in various ways. A few of the more important tax implications
relating to support are as fol¬lows:
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SPOUSAL SUPPORT: Spousal support is 100% tax deductible by the paying spouse. The receiving
spouse must include the support as taxable income on their State and Federal Income Tax Returns.
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CHILD SUPPORT: Child support is not deductible to the payor, nor includable as income to the
receiving spouse.
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FAMILY SUPPORT: This is a tax savings tool not used nearly enough. If you pay Family Support,
which is a combination of child support and spousal support, 100% of the payment is tax
deductible. When one spouse has a large income and the other a relatively small one, the IRS
ends up kicking in several hundreds of dollars each month to the benefit of both parties by
their tax savings.
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HEAD OF HOUSEHOLD: As a general rule, whomever the children reside with for more than 50% of
the year is entitled to claim head of household. There are exceptions to this rule, depending
upon when you separate and other factors, so check with your tax advisor to be certain of your
status.
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DEPENDENCY EXEMPTIONS: Unless otherwise stated in your order, whoever has primary custody is
generally entitled to claim the children as dependents on their income tax returns.
Dependency exemptions, however, can be released to the payor spouse even if the children do not
primarily reside with that spouse. In return, the payor spouse will generally pay a little more
child support for receipt of the benefit. Your lawyer should check the net after tax dollars to
each of you to make a determination of the most cost effective manner of assigning the exemptions.
An incentive to the spouse giving away the dependency exemptions is to include in your court order
that the payor spouse can claim the exemption only if the child support is fully paid by December
31st of the year he or she wishes to claim the exemption.