Understanding and Calculating Alimony in Wisconsin

Alimony, (which is referred to as spousal maintenance in Wisconsin) is a payment from one spouse to the other to help lessen the financial hardship that often accompanies divorce.

Alimony by Agreement or Court Involvement

Alimony, (which is referred to as spousal maintenance in Wisconsin) is a payment from one spouse to the other to help lessen the financial hardship that often accompanies divorce. It is meant to assist the more financially-dependent spouse. Either spouse may request maintenance from the other, regardless of how the marriage ended.

A court’s involvement in the process isn’t always necessary. Many divorcing spouses find that they can agree on the amount and length of payments without court intervention. They can then memorialize their agreement(s) in a contract that’s commonly referred to as a marital settlement agreement. On the other hand, if one spouse wants alimony but can’t get the other to agree, then a court will have to decide whether to award alimony, how much the payments should be, and how long they will continue.

Family Support

If there are children involved, then child support will also be part of the divorce. Where a spouse requests alimony and is also entitled to child support, the court has the option to order family support. Family support simply combines the two payments – alimony and child support – into one. The court will still need to calculate the two different obligations separately, however.

Factors Considered for Alimony

In Wisconsin, there is no formula to determine the amount or frequency of alimony payments. Payments could be for a limited time or last indefinitely. To order a fair award, the court looks to a list of factors that include the length of the marriage, the spouses’ ages, physical and emotional health, and how their property (both marital and individual) has been divided.

The court also considers both spouses’ educational levels, whether one spouse contributed to the education or earning power of the other, and the earning capacity of the spouse seeking maintenance. In terms of earning capacity, the court will want to know the requesting spouse’s educational background, skills, training, work experience, time away from the work force, responsibility for the care of any children, and the time and expense necessary to get additional education or training to find appropriate employment.

The court also evaluates the tax consequences of alimony and whether the requesting spouse can achieve a standard of living reasonably close to the one enjoyed during marriage. In the event the spouses made any financial agreements before or during marriage – say one spouse dipped into a personal savings account to cover the launch of the other spouse’s business on the condition that the money be repaid – then the extent of the loan and whether it was paid back will be part of the court’s calculations, too.

In addition to these listed factors, the court is free to look at any other factor that is relevant to the requesting spouse’s need for alimony and the other spouse’s ability to pay. Child support payments, for example, are relevant to this calculation.

Changing or Terminating Payments

Generally, an alimony award is not made until the end of a divorce. So what is a spouse in financial need supposed to do during the divorce process? A spouse may request that some alimony payments be made on a temporary basis until the order for permanent support is in place. This will help the requesting spouse cover expenses and get through the difficult period of time right after the divorce has started through the final judgment. After the court makes an order awarding temporary or permanent support payments, either spouse may request a change in those payments.

While a spouse can ask for a change in alimony payments, the court isn’t going to modify them unless there has been a substantial change in circumstances – like the loss of a job or an increase in the cost of living. Likewise, if a spouse receiving alimony moves in with a new boyfriend or girlfriend and benefits financially from this living situation, then that could be enough to justify a decrease in payments. An inheritance, too, may convince the court to change payments. For example, if a spouse receiving alimony gets an inheritance large enough to bring this spouse’s standard of living back up to or above the one enjoyed during marriage, then the paying spouse likely has a good reason to seek reduction of payments.

Nonetheless, where the paying spouse experiences a substantial change in ability to pay, that alone may not be sufficient for a court to modify the amount of alimony if the support payments were based on a percentage of income. For example, if the paying spouse made $100,000 and the order for alimony required payment of 10% of income, then the payment would be $10,000. If this spouse’s salary were cut to $75,000, then payments would be only $7,500. While the reduction in salary might be substantial, it may not be necessary to change the payment structure because the amount due automatically decreases.

Payments terminate altogether when the receiving spouse remarries or when either spouse dies. In the event of remarriage, payments don’t stop automatically. It’s up to the paying spouse to give the court proof of the remarriage and get a court order before stopping payments.  

Taxes

Wisconsin follows the IRS structure for taxing alimony payments. The spouse paying alimony can deduct the amount paid per year. The spouse receiving alimony must declare that amount as income.

Sources

All of the following sections refer to the Wisconsin Statutes. You can read the law on spousal maintenance in Section 767.56 and on family support in Section 767.531. For more on modification and termination, see Section 767.59.

The Internal Revenue Service Publication 504, page 12, has more information on taxing maintenance payments.

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