Sunday, April 11, 2010

Spousal Maintenance

Previously known as as alimony, maintenance is an award of money by the court for the support of a spouse. Maintenance can be for a fixed period of time or for an indefinite period of time, which can be for as long as the recipient lives or until he or she remarries. In fact, the court can terminate maintenance upon proof that the recipient is habitually cohabiting with a person of the opposite sex and is holding himself or herself out as the spouse of the person with whom he or she is living.

In determining the duration of a maintenance award, the court will take several factors into consideration, the primary one being how long it will take for the supported spouse to become self-supporting. Other factors the court may consider are whether schooling is necessary, the health of the recipient, the recipient’s age, and the payor’s financial ability to pay the support. While there is no set rule, the decision is discretionary with the court, and each case must therefore be decided on its facts.

Generally in long-term marriages (more than ten years) where the recipient is in his or her late forties or older, with no expectation of becoming self-supporting, and where the party paying support has the financial ability to do so, the court will order non-durational or lifetime maintenance.

In deciding how much maintenance to award, a court will look at the reasonable needs of the recipient (based upon the prior standard of living) and the income and assets of the recipient, balanced against the income and assets of the party paying the support. The New York Domestic Relations Law lists many factors for a court to consider in making the award. The factors include:

  • the income and property of the respective parties including marital property;
  • the duration of the marriage and the age and health of both parties;
  • the present and future earning capacity of both parties;
  • the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary;
  • reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage;
  • the presence of children of the marriage in the respective homes of the parties;
  • the tax consequences to each party;
  • contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
  • the wasteful dissipation of marital property by either spouse; and
  • any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration.
Maintenance may be awarded to either spouse without regard to gender and is intended to be rehabilitative, unlike alimony which had been awarded in order to help maintain the payee’s prior standard of living. While New York no longer uses the term “alimony,” the Internal Revenue Service still does, and any reference to alimony by the I.R.S. should be read as maintenance.

Furthermore, unlike child support, there are no set guidelines and the practical reality is there can be huge differences in awards based upon similiar facts. Likewise, unlike child support, maintenance is normally taxable to the recipient as income and a deduction to the person who pays it.

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