Spousal maintenance in a divorce can be tricky to explain. Once you understand the basics, you’ll be able to make well informed decisions, with the help of your attorney, about your future.
What is spousal maintenance?
Spousal maintenance is somewhat new over the last several years but is similar to contractual alimony. It is an amount payed by one spouse to the other to provide support. The main difference comes into play after the divorce is final. Unlike alimony agreements, spousal maintenance can be modified due to change in circumstances like a raise or job loss.
How is it calculated?
The amount and duration of support is dictated by a number of factors, including length of marriage and income of the paying spouse. Spousal maintenance is calculated at 20% of the paying spouse’s gross earnings, not to exceed $5,000 per month. An eligible spouse married less than 20 years may receive up to five years of spousal maintenance and up to seven years if they have been married between 20 and 30 years. If the marriage has exceeded 30 years a spouse may be entitled to ten years of support.
Modification of a spousal maintenance is allowed if there is proof of a material change in circumstances. For example, if the payor spouse becomes involuntarily unemployed, and no other source of disposable income is available, the unemployment would likely qualify as a material change of circumstances allowing spousal maintenance to be reduced.
What are its benefits over other assets?
The short answer is there are no tax consequences on spousal maintenance. Depending on the type of asset and your age, there are penalties and tax consequences associated with withdrawal of the money from other assets. If a client will require immediate access to funds, retirement funds are not going to be as beneficial as more liquid assets.