What are the major factors that the court takes into consideration when it determines an alimony award?
A. Ability to Pay
The most important consideration when determining a person’s alimony obligation is his ability to pay alimony. The court carefully reviews the payor spouse’s gross income. Moreover, the court will then subtract all mandatory deductions from his paycheck. Thereafter, the court will have a net income figure to use to determine any alimony award. Mandatory deductions include federal income taxes, new jersey state tax, social security and health care expenses. Most courts will also permit union dues to be deducted from the payor’s gross income. However, the court will not permit 401K contributions, savings contributions, vacation club deductions, etc. to be made from a payor’s gross income. If the parties have equal income then the court will not impose any alimony obligation. However, if there is a disparity of income then an alimony award must be calculated.
B. Ability to Earn
Both spouse’ss ability to earn a living is another critical factor to determine alimony. The courts not only consider what a spouse actually earns but it also considers what a spouse could earn in the future. The issues of imputed income and under-employment are vexing issues in many family court cases. For example, suppose you are a dentist and you are getting divorced. Before you file for divorce, you fold up your dental practice and then get a job at Walmart. Your rational is that you don’t want to pay your wife any alimony, and if you work at Walmart then your income would then be the same as your wife’s. Unfortunately, you can’t beat the system. The court would impute income to you, and calculate any alimony award based on your income that you were earning as a dentist. This legal concept is known as imputing income. The concept of imputing income is very much overused and sometimes even abused by many judges. The job market is constantly changing and it is unrealistic to expect judges to fully be “in the know” as to the employment climate for many fields of employment.
C. Ability to Support Yourself
Another important factor when determining alimony is whether or not a spouse has any marketable skills. If your ex-wife is a housewife, and if she has not worked in five years, then your alimony payment is going to be somewhat high. Alternatively, if your wife is a professional woman who has been out of the job market for two years to have a child, then your alimony payment will be much more reasonable. Many courts also are very interested if the wife is able to work outside the home. If a wife has custody of pre-school aged children, and if she no access to daycare, then this scenario could make it impossible for a wife to work outside the home.
Another important factor is the dependent spouse’s enthusiasm to find work. If a dependent spouse has marketable skills but she refuses to look for work, then the court is much more likely to limit the amount of alimony and the length of alimony. In New Jersey, in many cases no alimony is awarded if both spouses are able to support themselves on a comparable level. If one spouse was dependent on the other during the marriage, then this spouse is often awarded rehabilitative alimony. Rehabilitative alimony could be awarded for a time period lasting anywhere from one year to several years.
D. Standard of Living During Marriage
When a court determines alimony it also has to consider the standard of living during the marriage. The court will try to maintain this standard of living for both spouses if it is possible. However, this concept is really just a bunch of nonsense. Whenever a couple gets divorced both of their standards of living are markedly reduced. However, if you read all of the current alimony cases the common themes and concepts that are discussed is that if all possible both spouses standards of living must be maintained. Unfortunately, in my professional opinion some courts place too much emphasis on the standard of living factor, and they ignore the cold hard economic realities of living in New Jersey. Moreover, the court’s over emphasis of the standard of living factor has created a New Jersey alimony jurisprudence that is reviled by many people.
E. Length of Marriage
This is another critical issue in the calculus to determine alimony. The basic rule of thumb is that the shorter the marriage, then the shorter the length of alimony. A critical benchmark is whether the marriage has lasted ten years or more. In many mid-length marriages many courts could go either way and either award a limited duration term of alimony, or the payor spouse could get the “death penalty” and be ordered to pay permanent alimony.
F. Tax Consequences of the Alimony
For federal income tax purposes, generally any alimony that is paid pursuant to court order/judgment is deductible by the payor spouse. Moreover, the recipient spouse must pay income tax on the alimony that she receives. Meanwhile, child support is tax free to the recipient spouse, and it is not deductible by the payor spouse who pays. Most judges take into consideration the tax implications of alimony and child support when they determine any alimony award.
In this day and age, most divorcing couples have large credit card balances that they have to deal with. If a court orders the husband to pay for a larger percentage of the marital credit card debt then quite often the alimony award will be lower.
H. Professional Degree or License
The courts will not only take into consideration the amount of financial support given during a marriage but, also the amount of emotional support. If a spouse has worked and supported the other spouse through school, then this factor will evaluated. The dependent spouse could ask for and receive compensation in the form of alimony for all the years she worked when the other was in school.