Understanding and Calculating Alimony in Vermont

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Spousal maintenance (also known as alimony) is a payment from one spouse to the other to help the recipient spouse avoid financial hardship. It is not gender-based; either spouse may request maintenance from the other. The spouse who wants maintenance payments must request them before the divorce is final.

In Vermont, there is no formula for calculating spousal maintenance. When one spouse asks for maintenance payments, the court will calculate the amount and duration of payments based on the requesting spouse’s reasonable needs. The court’s doesn't always have to be involved in the process, however. The divorcing spouses could agree to maintenance payments when they complete their separation agreement. If they can’t agree, then the court will decide, using a set of factors to determine the requesting spouse’s resources and how long it will take before that spouse can become self-supporting.

Factors Considered for Payment of Spousal Maintenance

The court evaluates a spouse’s reasonable needs against the standard of living enjoyed during marriage. In other words, if a homemaker spouse lived an affluent lifestyle while married, then the court could order the obligated spouse (the one who has to pay) to make payments maintaining that affluent standard, or close to it, so long as it does not create an unreasonable hardship on the obligated spouse.

In addition to the marital standard of living, the court must consider the length of the marriage. The longer the marriage, the more likely one spouse has grown financially dependent on the other. Additional factors include the requesting spouse’s ability to self-support – meaning, the supported spouse's level of education, work history, and anything else that impacts financial independence – as well as what may be needed to care for any children of the marriage.

The court also looks at all of the requesting spouse’s financial resources, such as income, earning potential, and any property this spouse will have after divorce. Typically, the court orders spousal maintenance after dividing both the marital and separate property between the spouses. That way, it knows the spouses' income and other assets, as well as the debt obligations that each must carry.

The court may, however, award spousal maintenance where a simple division of property between the spouses is not enough to reach an equitable result. For example, where a husband took on extra work to put the wife through law school, the court could order the wife to make maintenance payments to the husband to make up for the increase in the wife’s earning capacity at the husband’s expense. On the other hand, if the wife chose to stay home and raise the children instead, then the court could order the husband to pay maintenance to compensate the wife where an award of property alone does not fairly represent her contribution to the household.

Types and Duration of Maintenance

In Vermont, spousal maintenance can be rehabilitative or permanent. Rehabilitative maintenance payments help the requesting spouse obtain education or training to find appropriate employment. These payments are temporary. The requesting spouse can’t be a student forever at the obligated spouse’s expense. Permanent maintenance payments continue until there is a court order that terminates or changes them. They may continue even after the recipient spouse remarries because remarriage does not always improve a spouse’s financial circumstances.

Although it may seem unfair that remarriage does not automatically terminate maintenance payments, that does not mean a husband, for instance, must keep paying the same amount of spousal maintenance to his ex-wife after she marries a wealthy real estate developer. Unless the final order provides otherwise, either spouse may ask the court to modify an order for spousal maintenance where there is a change in financial circumstances. This could be due to remarriage to a wealthy new spouse. It could also be where a spouse loses a job. It does not matter which spouse experiences the financial change, so long as it is real, substantial, and unexpected.

Taxes

If you are paying spousal maintenance, your payments are tax deductible. If you are receiving spousal maintenance, the IRS taxes what you receive as income.

Sources

You can read the law on spousal maintenance and on revising a current maintenance order in the Vermont Statutes Sections 15:752 and 15:758, respectively. For more on spousal maintenance and taxes, see Internal Revenue Service Publication 504, page 12.

If you want to learn more on how maintenance payments can impact division of property, read the cases Klein v. Klein 555 A.2d 382 (1988) and Downs v. Downs 574 A.2d 156 (1990). For an example of maintenance payments continuing after remarriage, see the case Johnson v. Johnson 580 A.2d 503 (1990).

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