Negotiating alimony gives you and your spouse control over the outcome, instead of leaving it up to a judge to decide for you.
You negotiate alimony by first reviewing the factors a judge would use to decide support, then gathering full financial information about your and your spouse's income, assets, and expenses. You can then use that information to calculate a reasonable amount before you sit down with your spouse or their attorney. Most alimony amounts are settled through negotiation, not in a courtroom. Negotiating alimony is typically faster and cheaper than going to court and leaves the decision in your hands instead of a judge's.
Know What a Judge Would Consider First
Before you start negotiating, look carefully at the factors judges consider when deciding alimony amounts. They may help you in your negotiations—and if you can’t agree, at least you’ll know what the judge will take into account.
Your mediator or lawyer can help you plan for the negotiation. If you’re using mediation or collaborative law to resolve your divorce case, you can work with the professionals to figure out how much spousal support is appropriate to ask for in your settlement agreement. If you’re in a contested divorce, your lawyer will help you come up with an amount to argue for based on what the judge is likely to consider.
Gathering Your Spouse's Financial Information for Alimony Negotiations
Whether you’re the one who’ll be receiving or paying support, you need information to negotiate effectively. Otherwise, you can’t feel comfortable that the support you agree to is adequate for your needs—or consistent with your ability to pay.
Almost all states require both spouses to make some financial disclosures as part of the divorce proceeding. This is true even if it’s clear which spouse will pay support—the recipient spouse’s resources help determine need, and the paying spouse’s resources determine ability to pay. If you’re certain that there’s nothing you don’t know about your spouse’s financial situation, or you trust your spouse’s word 100%, you won’t need to ask for more information.
Otherwise, make sure the following things are included in the forms you’re both required to fill out. And if they’re not, use discovery methods to get the additional information you need. You’ll need to know about:
- Your spouse’s separate assets. If your spouse has separate assets, you’re entitled to know their value. (Depending on where you live, the judge may consider them if called upon to decide a support amount.)
- Income and expense information. You definitely want a detailed monthly income and expense report—which should be one of the forms your spouse is required to give you—to show you where your spouse’s money is going. If the expense report shows $1,000 being spent every month on dining out, and all you can afford are microwave dinners, you’ll surely want to point this out. At the other end of the spectrum, if your spouse is seeking a large amount of support while you know that separate liquid assets are available for daily expenses, get the information that will prove it.
- Bonuses, overtime, and benefits. Don’t forget income from things like bonuses and overtime, even though they’re not completely predictable. If your spouse has regularly received a bonus or lots of overtime pay, you can average the amount received in the last few years and use that figure. Likewise, pay attention to things like stock options and the value of work-related benefits such as unused vacation pay and sick pay, company-paid vehicles, and health insurance benefits. All of these items have a measurable value that should be factored into a spousal support negotiation. You may need to ask for your spouse’s employee manual or other work-related benefits information to find out what the company’s policies are on accruing sick and vacation time, so that you know what’s there and what it’s worth.
Calculating How Much Alimony You Need
Given that you’ll be required to prepare a monthly income and expense disclosure anyway, use it to determine how much support you need. Look at the difference between your expenses and your income and then factor in whatever resources you have. Because, unlike child support, most states don't use guideline formulas for calculating alimony, all you can do is decide what you think you need and ask for it. That will get the negotiations started.
How Alimony Is Taxed
Bear in mind alimony tax rules. For agreements finalized in 2019 or later, alimony is not tax-deductible for the paying spouse, and the recipient doesn't pay tax on it either. That's different from the old rules, where the paying spouse got a deduction and the recipient reported the support as income. Factor this tax-neutral treatment into what you are asking for.
Building in a Cost-of-Living Increase
And remember, nothing’s getting cheaper. If you’re the person getting support, once you’ve settled on an amount, you might want to include a provision for increasing the amount each year—a cost-of-living adjustment (often shortened to COLA). You can tie the increases to the national or a local COLA index, or assume an annual increase of a specific percentage.
Adapted from Nolo’s Essential Guide to Divorce, by Emily Doskow.
