Whenever people are contemplating divorce, one factor that often crosses people’s minds is alimony. Whether you suspect you will have to pay alimony to your ex-spouse, or you think you should be receiving alimony, it can become a source of stress if you don’t understand how the process of determining someone’s alimony obligation works. So, we’ve created a comprehensive breakdown of the process for determining Alimony.
What is Alimony?
In general, Alimony (sometimes called Spousal Support) is money paid to financially support an ex-spouse. Alimony can be ordered to be paid to a spouse either during the divorce proceedings, and/or after a divorce is finalized. Alimony is distinct from child support, in that child support is money paid to another parent for the purpose of financially supporting a child. Under Tennessee Law, a court can award Alimony in any divorce or legal separation (however, Tennessee Courts will not award alimony for people who were not married prior to separation, such as live-in partners or boyfriend/girlfriend scenarios).
Who Gets Alimony?
A spouse can be granted an award of Alimony by showing that they are “economically disadvantaged” in comparison to the other spouse. The two main things that judges consider when awarding Alimony are:
- The ability of one spouse to pay support to the other, and
- The need of the other spouse for support.
In reality, the economically disadvantaged spouse is commonly the stay-at-home parent, who courts have said deserves alimony to compensate them for their intangible but real contributions to the family unit such as raising children. However, there are several other factors and circumstances that dictate whether a party should receive Alimony. Tennessee statutes outline several other factors that courts will consider, including:
- The relative earning capacity of each spouse, including past and present income;
- The education and training of each spouse which contributes to their income (such as having a professional or vocational degree);
- The duration of the marriage;
- The age and mental condition of each spouse;
- The physical condition of each spouse (meaning whether either of the spouses is disabled or has some conditions that impede their ability to work);
- The need to stay at home rather than work after the divorce because there are minor children that require a custodian;
- The separate assets own by each spouse that can be used to support each spouse;
- The assets that are to be divided between the spouses as a result of the divorce;
- The standard of living established by the spouses during the marriage;
- The extent that each party contributed to the standard of living (who brought in income, who stayed home with the kids, whether one party took on responsibilities so the other could go to school, etc.);
- The reason for divorce such as adultery (the court is not required to, but can, consider this);
- The potential tax consequences on an award of alimony; and
- Any other factors that the judge believes is necessary to considering the relative need one spouse and the relative ability of the other spouse to pay.
When the judge goes through these factors, some are going to weigh in favor of an Alimony award, and some will weigh against it. However, judges generally agree that the financial need of the spouse asking for Alimony is given greater consideration than the other factors. Judges are given wide discretion in awarding Alimony because one of their goals is to prevent parties from severe financial distress or poverty following a divorce.
If a judge determines that an award of Alimony is appropriate after weighing all of the factors, the next step is that the judge must determine what type of alimony best suits the parties’ needs.
What are the Different Types of Alimony?
Determining the type of Alimony that is appropriate is done on a case-by-case basis. Things that will affect the type of Alimony include the overall amount of money it would take to put. the spouses at equal footing financially after the divorce is finalized, whether Alimony will be paid in a lump sum after the divorce or paid to one spouse periodically, and the general life circumstances of each party at the time of the divorce. Courts will still rely on the factors listed above, however there are four general classifications of Alimony recognized in Tennessee: Rehabilitative; In Futuro; Transitional; and In Solido.
Rehabilitative Alimony
Rehabilitative Alimony is awarded for the purpose of helping the poorer spouse to eventually achieve a comparable standard of living to the one that they enjoyed prior to divorce. Rehabilitative Alimony is typically seen in cases where once spouse wants to get or complete a college degree or start a new business after the divorce, to the extent that the spouse will eventually be able to support themselves individually. Rehabilitative Alimony can take the form of a lump sum payment, or in regular scheduled payments. To get Rehabilitative Alimony, the spouse must be able to show a real, articulable plan, along with evidence that the spouse will intend to follow through with that plan. Good examples include a letter of admission to a school or university, or a business loan commitment from a bank or credit union.
Rehabilitative Alimony awards are often more generous than other types of Alimony. As such, Rehabilitative Alimony can be modified after the divorce has been entered, if the spouse seeking to modify can show a change in circumstances that warrant a change. Common examples include the paying spouse losing their job (but not quitting or voluntarily getting a decrease in pay), the receiving spouse quitting school or their new business, and others.
Alimony In Futuro
Alimony In Futuro, also known as Periodic Alimony, is the classic type of Alimony where one spouse makes payments of support and maintenance on an indefinite, long-term basis or until re-marriage of the spouse receiving payments, or death of either party. This type of Alimony is usually awarded in circumstances where the recipient is elderly or disabled. In previous years, parties that were extremely well off and had a strategic tax avoidance plan used this type of alimony in order to benefit from the ability to deduct alimony payments from their federal tax return. However, the Federal Tax Guidelines were changed in 2019 so that for divorces executed in 2019 and after, the paying spouse is no longer allowed to deduct alimony payments from their taxable income. Other than these limited circumstances, courts are usually not inclined to award this type of Alimony.
Alimony In Futuro is modifiable if the spouse seeking to modify can show a change in circumstances that warrant a change. The most common example of this is where the receiving spouse moves in with someone else (a family member, or significant other) and is receiving financial support from the third person. Also, Alimony In Futuro automatically terminates upon the death or remarriage of the recipient, or the death of the paying spouse.
Transitional Alimony
Transitional Alimony is awarded in circumstances where Rehabilitative Alimony is not appropriate, but the economically disadvantaged spouse needs assistance to adjust to the economic consequences of a divorce. Transitional Alimony is awarded as a sum of money that can either be paid in a one-time transaction (where the award lists the total sum of the payer’s obligation) or broken into periodic payments such as monthly payments (where the award lists a specific amount to be paid “per month” or “per week”) until the paying spouse has satisfied the total amount of the award. Transitional Alimony ends when the paying spouse has satisfied the total amount awarded in the final divorce.
While not impossible, it is much more difficult to modify or terminate Transitional Alimony once it has been awarded by the court. The standard for modification is the same, in that the party seeking to modify the obligation will have to prove a substantial and material change of circumstances. However, courts are less inclined to allow a modification because the award is based on an amount of money owed to the other spouse rather than the amount of time it takes to satisfy the award in full. However, where the receiving spouse moves in with a third person and is receiving financial support from the third person, the court does have discretion to modify if the receiving spouse does not need the amount previously awarded. Additionally, it will be difficult to modify a Transitional Alimony obligation even if it is the paying spouse’s economic circumstances that have changed rather than the recipients’.
Alimony In Solido
Alimony In Solido, also known as Lump Sum Alimony, is a form of long-term support. It is similar to Transitional Alimony, in that the overall amount is calculable on the date that the Alimony is awarded, and it can be made in one single transaction or dispersed into regular installments until the overall amount has been paid. However, there are a few key differences between Alimony In Solido and the other types of spousal support.
First, the award has to specifically state the overall sum of the obligation. Second, Alimony in Solido can also include attorney’s fees where appropriate, as the other types of Alimony and not intended to support spouses in this way. Third, and most importantly, Alimony In Solido is not modifiable, for any reason. This is the case even if the paying spouse loses their job, gets injured causing him or her to not be able to work, or experiences some other life altering event that substantially lowers their ability to pay. It is also nonmodifiable is something changes concerning the recipient spouse’s life such as re-marrying, getting a raise at work, or winning the lottery. The obligation remains the same. Further, even if the recipient spouse dies before the award is fully satisfied, his or her estate has a claim against you for the unpaid balance of the Alimony In Solido award.
In summary, Alimony can be a topic of stress and anger, but much of the stress and anger can be eliminated simply by having a better understanding of what alimony looks like, and what the process is to determine whether a spouse may owe Alimony following divorce. The goal of Alimony is to put both parties in a financial position that is similar or identical to the position the parties held during the marriage, and to ensure that each party going through divorce is equitably compensated for their own contribution to the marriage, financial or otherwise. There are options for every situation, and attorneys will simply seek for an outcome that is as fair as possible between two spouses.
We talk with people every day who have questions about divorce and alimony. Give us a call at 865-637-6550 and let one of our experienced attorneys talk with you and answer your questions!
