Understanding and Calculating Alimony in Alaska

In most divorces, money is a hot topic. Divorce-related financial issues often include marital property division, child support, and alimony.

In Alaska, the courts refer to alimony payments from one spouse to the other as "spousal support." The purpose of spousal support is to ensure that both spouses can handle the economic effects of the divorce.

In situations where one spouse earns more than the other, the court may order the higher-earner to provide financial payments to the lower-earning spouse during the divorce, and sometimes after the divorce is final.

Who Is Eligible for Spousal Support in Alaska?

Either spouse can request spousal support (ask for it in the initial divorce complaint or the answer to the complaint.) But, the court will only award support if the requesting spouse can demonstrate a need for financial assistance, and the other spouse can pay.

It's common for both spouses to experience a drop in economic status after a divorce, primarily due to the need to maintain two households on the same amount of income that formerly supported one. However, in situations where one spouse will experience financial hardship without some help from the other, the court will likely award support.

Temporary, Rehabilitative, and Reorientation Spousal Support

Alaska courts offer three types of spousal support: temporary, rehabilitative, or reorientation. Temporary relief is appropriate in cases where one spouse needs financial help during the divorce process. In many cases, the legal process can take up to a year to complete. Temporary support ensures that the lower-earning spouse can cover living expenses while waiting for the judge to issue a final judgment of divorce.

The purpose of rehabilitation support is to provide the lower-earning spouse with the financial backing to gain the skills, education, or job training necessary to become self-supporting after the divorce. A spouse who receives rehabilitation support must have a specific employment goal and must describe to the court how the support will facilitate reaching that goal. Rehabilitation support usually only lasts for as long as it takes the spouse to complete schooling or a training program to begin a new job.

The court reserves reorientation support for cases where one spouse needs help adjusting to a one-income household. Reorientation support is short-term (typically lasting one year or less) and most common in situations where the couple's marital property isn't enough to meet both spouse's financial needs after the divorce.

Factors for the Court to Consider in Spousal Support Awards

When setting spousal support, the judge will consider the following factors:

• the length of the marriage (short-term marriages are less likely to see spousal support awards in divorce)
• each spouses' age and health
• both spouses' ability to earn, including their educational backgrounds, training, employment skills, work experiences, length of absence from the job market, and, if applicable, custodial responsibilities for children during the marriage
• the financial situation of each spouse, including availability and cost of health insurance
• the conduct of the parties, including whether either spouse unreasonably depleted marital assets
• marital property division awards in the divorce, and
• any other factor the court determines to be relevant. (Alaska Stat. §25.24.160 (a)(2)(2018).)

It's important to understand that there is no formula for the court to determine spousal support, and the judge has broad discretion when creating a final award.

Payment of Spousal Support

There are a few ways to pay spousal support: lump-sum, property, or periodic payments. The most common payment method for spousal support is a regular payment (usually monthly) that the court removes directly from the paying spouse's paycheck.

When the court issues a support order, it typically includes an income withholding order. Income withholding orders instruct the paying spouse's employer to redirect the spousal support award to the recipient spouse. (Alaska Stat. §25.27.062 (2018).)

It's important to understand that failure to pay spousal support or not complying with the income withholding orders may result in the court charging you with contempt, which can result in fines, penalties, and possibly a jail sentence.

Most couples don't have a large reserve of funds after the divorce, so lump-sum payments are not as standard as periodic payments. However, in cases where the paying spouse can pay, the court may allow a one-time, lump-sum payment of spousal support, which will eliminate the need for an income withholding order and ongoing payments.

In any divorce, couples have the right to create an agreement regarding spousal support that works for them. If you and your spouse wish to handle spousal support (deciding the amount, duration, and payment method) without the court's help, you'll need to put your agreement in writing.

Changing or Terminating Spousal Support

Unless the couple agreed, in writing, that neither will seek a modification of the spousal support award in court, the court may modify spousal support awards in the future. However, the requesting spouse must demonstrate to the court that, since the last support order, there has been on ongoing material and substantial change in circumstances that requires a review.

If the recipient spouse remarries, the paying spouse can file a motion with the court requesting termination of support.

Spousal Support and the New Tax Law

For marriages finalized before December 31, 2018, spousal support payments were tax-deductible to the payer and reported as income for the recipient. However, if you finalized your divorce on or after January 1, 2019, the payments are no longer tax-deductible or reported as income for the recipient spouse.

Couples contemplating divorce must now take into consideration the tax ramifications of the new tax law before finalizing a divorce. Many judges will take into account the tax consequences of the new law when creating a final award.

It may be beneficial to speak with a tax attorney before signing your final settlement agreement or judgment of divorce.