It’s no secret that divorce is stressful and emotional, but many couples can avoid long, drawn-out divorce trials by negotiating major divorce-related issues without the help of the judge. However, even the most settlement-minded couples often reach an impasse when they start discussing ongoing financial support, which is one of the most contested topics in divorce.
Spousal maintenance—sometimes also called “alimony” or “spousal support”—is money that one spouse pays to the other for financial support either during or after the divorce (or both.) In some marriages, one spouse earns a higher income which leaves the other without many options after a separation. When the lesser-earning person is unable to pay for regular living expenses, the judge may require the other spouse to contribute financially to ensure that neither party is destitute during or after a divorce.
The type of spousal maintenance award in Arizona depends on where you are in the divorce process. Judges can award temporary support during the divorce —also referred to as “pendente lite”—meaning it’s pending until the divorce is over. Judges will order pendente lite support if one spouse needs the other’s financial help for regular living expenses and to otherwise remain financially stable during the divorce process. An award of temporary support during the divorce does not guarantee a post-divorce award later.
When the court enters the final judgment of divorce, the judge will specify if support will continue. The judge can order a temporary maintenance award, meaning financial support will continue for a fixed amount of time after the divorce. When courts award temporary, post-divorce, support, the goal is for the recipient spouse to use the financial assistance to boost job skills, gain essential education requirements, and otherwise better prepare themselves to be financially independent.
Temporary support (sometimes called “rehabilitative maintenance”) allows the lower-earning spouse time to get back on solid financial footing after the divorce, especially in situations where the recipient spouse gave up a job during the marriage to raise a family or to improve the other’s career.
Arizona also offers permanent maintenance, but the courts reserve it for extreme cases. Even after a long marriage, the courts view support as rehabilitative, meaning eventually the recipient spouse should become financially independent. However, in some rare cases, the court may order permanent spousal maintenance if the lower-earning spouse is unable to become self-supporting due to illness, disability, or age.
Before the court can award any maintenance, the requesting party must demonstrate a need for support and the other’s ability to pay. The court will determine a “need” for support if the requesting spouse:
Whether a spouse can become self-sufficient through employment requires the judge to evaluate each case individually. For example, if you are caring for a very young child or your child has an illness or disability that makes it difficult to maintain full-time employment outside of the home, the court may order your ex-spouse to pay maintenance for a more extended period.
After the court finds that spousal maintenance is appropriate, the judge must set the amount and duration of the award and will consider the following factors before deciding:
Spousal maintenance is different from child support in that there is no set formula. Recently, some courts in Arizona have experimented with using methods to compute a starting point for spousal maintenance, but any Arizona judge who consults a formula must still consider all of the factors outlined above. After taking such factors into account, a judge has broad discretion in deciding what amount to award, or whether to award any amount at all.
It’s important to understand that couples can agree to the type, amount, and duration of spousal maintenance through an agreement, which eliminates the need for the judge’s evaluation.
Temporary support continues until the judge finalizes the divorce and creates a new maintenance award.
Post-divorce support will continue for the duration that the judge sets in the final judgment. Typically, maintenance ends automatically if:
In rare cases, the court will order the paying spouse to provide lump-sum cash or property to the recipient. Lump-sum payments typically relieve the paying spouse from future maintenance payments.
Most maintenance payments are periodic, meaning the supporting spouse pays either bi-weekly, monthly, or any other term the court sets. Typically, the court will issue an income withholding order, which requires the paying spouse’s employer to withhold the support payments directly from the employee’s wages. The funds are routed through a special division of the court and then to the recipient. (A.R.S. §25-322.)
If the paying spouse fails to make required payments, the recipient can ask the court for help recouping the missing funds.
Couples may enter into their own agreements either waiving maintenance entirely or creating a non-modifiable provision that prohibits either spouse from seeking a modification.
Unless they make such an agreement, or unless the final divorce order says otherwise, either spouse may ask a court to modify or terminate periodic payments due to a substantial and continuing change of circumstances.
If the judge finalized your divorce before December 31, 2018, spousal maintenance payments are tax-deductible to the payer and taxable income to the recipient.
However, for any divorce concluded after December 31, 2018, significant changes to the Tax Cuts and Jobs Act will impact your bottom line. Beginning on January 1, 2019, spousal maintenance payments are no longer a tax-deductible expense for the payer and the recipient will no longer pay taxes on the payments.
The new update to the tax law theoretically removes the incentive for paying spouses—the tax deduction—which may result in a more complex divorce process.
For couples going through a divorce, it might be beneficial to speak with a tax and divorce attorney before negotiating spousal maintenance, as the changes could impact your taxes, retirement, and future savings.