Educate yourself about alimony payments and know your options.
Alimony, maintenance, and spousal support refer to the same thing. Attorneys tend to use the term maintenance, since its purpose is to maintain the receiving spouse’s standard of living for a certain duration of time after the marriage.
The lay public tends to use the term “alimony.”
The maintenance calculation was standardized in January 2016; the way it used to be allocated was less streamlined and too subject to judicial discretion. If there are no children or if the payor is not paying child support, it’s now based on the lowest total of two calculations: 30% of the payor’s income minus 20% of the payee’s income OR 40% of the combined income minus the payee’s income. If child support is also being paid, then it’s the lower of 20% of the payor’s income minus 25% of the payee’s income and 40% of the combined income minus the payee’s income. Agreements must consider how much net income the parties have so the payor is still able to pay his or her own bills and living expenses.
Maintenance is calculated based on adjusted gross income; the money left after Social Security, Medicare, and New York City Tax are paid but before retirement contributions are deducted. Maintenance used to be tax-deductible to the payor and taxable to the payee, but this is no longer the case, which is still causing confusion and disappointment among payors.
Judicial discretion can still be an issue when deciding the duration of maintenance payments. If the marriage lasted up to 15 years, the duration is 15-30% of the length of the marriage; for 15-20 years, it’s 30-40% of the length of the marriage; for a marriage over 20 years, it’s 35-50% of the length of the marriage. There is room for discussion when determining where people should fit in those ranges and even whether there is room to deviate from the ranges altogether.
Maintenance causes much grief for payors because it’s so difficult to modify. The standard to reduce maintenance is much higher than to reduce child support, and judges can be hard to convince. Some payors would prefer to offer more in child support and less in maintenance, because if their income decreases, they are more likely to be able to reduce the child support payments. This was not the case when maintenance was tax-deductible to the payors. Then, obviously, the payors wanted to beef up their maintenance payments relative to their child support payments, the latter not be tax-deductible then or now.
One client’s husband negotiated very hard to get language in the agreement that if his income went down, he could get a certain amount of reduction in his maintenance. We did not have to give him that concession, but they wanted to keep it an amicable, uncontested divorce. We created room in the agreements to allow for modification, provided his support would never go below a certain amount. The payee is often afraid because she’s dependent on him continuing to be able to make a certain income.
Another attorney had a client whose ex-husband got fired due to the “Me Too” movement; he’s having a hard time finding new employment, so she can’t get her maintenance. She wants to sue the husband’s former employer for interfering with her separation agreement. In litigation, you go after the person with pockets, and her ex-husband doesn’t have the pockets anymore. Whether or not she has a valid claim, people get desperate; they have bills.
Alimony recipients have legitimate fears of what might happen if the money suddenly stops flowing. Maintenance payments are sometimes huge, $7,000 – $8,000 a month or more. When a payee’s rent is $8,000 – $9,000, if they suddenly don’t have that money, their whole life could spiral into chaos very, very quickly.
By law, maintenance ends upon a person’s remarriage. Language is often added to the agreement during negotiation that maintenance ends upon cohabitation with a new romantic partner. A provision that maintenance stops at cohabitation can create fear and resentment in certain cases.
Let’s say a woman was married for 20-plus years so she’s entitled to maintenance payments for a significant duration. Two and a half years post-divorce, she meets someone that she would like to move in with. She may be afraid to move the relationship forward, because she will be cutting herself off from a tremendous amount of money that she really was entitled to. She invested over 20 years in that other pernicious spouse, standing alongside them, running their household, going to work events with them, but now she’s going to lose that hard-earned income prematurely if she moves in with someone.
Sometimes the divorcing parties just say money is money and they negotiate equitable distribution. This can be favorable to payors because sometimes they can haggle over that lump sum. They have leverage when offering a buyout amount on the maintenance because cash is king. Payors often prefer this option because they won’t have to share future paychecks with their exes. It’s also easier from an emotional standpoint; payors feel they’re just ripping off the band-aid rather than prolonging the agony.
I recently had a case where the husband really wanted to pay it all upfront and the wife rejected it; she refused, saying, “I want monthly payments.” I actually think based on her circumstances and what she wants in her life, she would do much better with taking the lump sum. But she is not a financially sophisticated woman, and some people with less financial savvy are afraid of getting a lot of money very quickly. Monthly amounts are somehow easier for them to conceptualize.
When alimony is paid in conjunction with child support, the child support gets adjusted when the alimony duration ends. Sometimes the agreement is written to specify the future adjustment; other times the agreement just states that the parties will adjust the agreement at the time child support is modified. People who prefer to specify feel the whole point of the agreement is to pin things down once and for all, since re-negotiating can be very emotionally burdensome and anxiety-producing.
The halo of fears surrounding maintenance, for both spouses, can be mitigated by careful attention to these details during the global settlement negotiation. Care and caution now can save future pain!
Please contact the Law & Mediation Offices of Cheryl Stein with related questions.
Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324