Creating an Alimony Arrangement That Works

Once you’ve made the decision to divorce, a whole host of decisions will need to be made. From deciding who will keep the house, the kids, and figuring out how to divide your property and assets, the decision to divorce can seem like the only “easy” choice you’ve made.

The question of spousal support, or alimony, will also come into play. Alimony was designed to ensure that the spouse who earns far less than the other can maintain their lifestyle after the split. However, exactly what that means can be left to interpretation. That said, hiring an Irvine spousal support attorney is a smart move if you want to ensure your lifestyle remains as intact as much as possible.

There are various factors that will go into how much alimony you’re awarded. Below, we discuss a few that you should keep in mind.

The Length of Your Marriage

A general rule of thumb in California divorces is that spousal support will last for half the length of a marriage that was less than 10 years in length. Longer marriages, however, will usually not put a limit on the amount of time that alimony will be given to the other spouse. Instead, when one spouse wants to present information that the other spouse no longer needs support, that spouse will be required to go back to court and argue that claim in front of a judge. 

Within alimony discussions, there are two types of support: Temporary support, which covers a spouse’s alimony during the duration of the divorce proceedings and before the specifics of their long-term support payments are finalized; and long-term support, which is the final agreement approved by the court that gives the spouse with less income the right to receive alimony over an extended period of time. This agreement, as mentioned, can only be altered when the spouse with the higher income proves that the other spouse no longer needs as much support, either because they have a job or another source of income.

Lump Sum or Periodic Payments

Deciding whether to give your spouse a lump sum buyout or make periodic payments can be a difficult choice. On the one hand, a lump sum buyout means you’ll be done with your spouse for good; alternatively, you may end up paying far more than you would have had you gone with periodic payments. If left to the courts, they typically opt for periodic payments; however, you are free to decide to make a lump sum payment if that’s preferred. You can also use a lump sum payment to obtain something else you want. For example, you can keep the house in exchange for a larger share of the liquid assets, art collection, or some other valuable piece of your wealth. 

An Irvine Spousal Support Attorney Can Help

Arguing for what you want out of your alimony agreement will likely be the most contentious phase of your divorce. You’re going to want an experienced negotiator on your side for this process, and hiring an Irvine spousal support attorney you trust is imperative to your success. Contact our offices today.

Frequently Asked Questions

What makes a spousal support arrangement hold up over time?

Terms specific enough that neither party has to guess, and a mechanism for the changes both know are coming. That means stating the amount and its due date, defining how variable compensation is treated, specifying whether and how the amount steps down, addressing what happens on retirement, and saying whether the order is modifiable. Orders that fail are usually the ones that fixed a number against a single year’s income and left everything else to be litigated later.

How should bonus or commission income be handled?

Separately from the base amount. A support figure set on a year that included a large bonus will be unpayable in a year without one, and a figure set on base salary alone understates the marital standard. The workable structure is a base monthly amount calculated on predictable income plus a defined percentage of bonus or commission applied when it is actually received, documented and paid within a set number of days. That way the order adjusts itself instead of generating a motion each time compensation moves.

Can spousal support be bought out or made non-modifiable?

By agreement, yes. The parties can convert future support into a lump sum or an offsetting allocation of assets, and can agree the amount and duration are non-modifiable and non-terminable. This is often attractive because it ends the ongoing financial relationship and removes the risk of future proceedings, and it can be structured around the tax and liquidity picture. It also forecloses adjustment if circumstances change substantially, so the assumptions and the discount rate behind the number deserve real attention.

What are the tax consequences of spousal support now?

Under current federal law, spousal support paid under an agreement or order executed after 2018 is neither deductible by the payer nor taxable to the recipient. That is a change from the prior regime and it altered the economics considerably, because the payer no longer receives a deduction that effectively subsidized the payment. Orders entered before 2019 may still follow the old treatment depending on their terms. Because the payer no longer receives a deduction, the after-tax cost to one spouse and the after-tax benefit to the other now move together, which changes what a given number is actually worth to each side.