Alimony is support for one spouse after a divorce is finalized. It is a “squishy” area of the law and is different from spousal support or alimony pendente lite. There are no formulas to calculate alimony and no hard and fast guidelines to determine if a spouse will receive alimony and if so, how much and for how long. I’m addressing alimony as defined in the Divorce Code, which may be different than alimony decision-making in private agreements between divorcing spouses.
Alimony is based on need. If an individual is able to meet his or her own reasonable expenses without receiving alimony, then alimony should not be an issue under the Divorce Code. If an individual is unable to meet his or her own reasonable expenses without receiving alimony, then the court uses a list of 17 factors to determine if alimony should be awarded and if so, how much and for how long. Section 3701(b) of the PA Divorce Code lists the relevant factors and you can easily find those at:
As a general rule, alimony is modifiable in both amount and duration based on a change of circumstances in the future. Divorcing spouses may reach agreements that include non-modifiable alimony, which provides more definite terms for planning purposes, but also has risks for both parties because they’re making assumptions about the future that may or may not be accurate.
Alimony is generally taxable to the receiving spouse as income and tax-deductible for the paying spouse. That provision is subject to certain IRS requirements. If there is a significant difference in spouses’ incomes, there could be a net tax benefit to paying alimony, since the individual paying the alimony may save more in taxes by deducting it from his or her income than the receiving spouse pays in taxes by adding it to his or her income.
Unless the individuals agree otherwise, alimony ends upon the receiving spouse’s remarriage or cohabitation with another individual of the opposite sex. It also ends upon either party’s death.
Alimony can be a complicated issue with significant obvious and hidden implications for both individuals. Talk with an attorney (preferably me) before making any decisions about alimony.