Alabama Alimony Laws and Spousal Support
What Is Alimony: Alabama Alimony is financial support the court awards to one spouse who needs assistance, paid by the other spouse that has the ability to pay. Alimony is intended to preserve the economic status of both parties as it existed during the marriage. It can be awarded in a lump sum (alimony in gross) or as periodic payments for a determined period of time. The requirement to pay may end earlier in Alabama under certain circumstances, such as the death of either spouse, remarriage of the receiving spouse, or cohabitation of the receiving spouse. can agree to alimony within a marital agreement prepared by the parties (either on their own or through mediation) and include it within the divorce proceedings. Otherwise, the trial court can determine at its discretion, whether alimony is warranted.
Alimony in Gross: Alabama Alimony paid in one lump sum gives a present value to a spouse’s rights to alimony and is similar to a division of property. As an award for a fixed lump sum, similar to a property settlement, alimony in gross is not modifiable (fixed after 30 days from final divorce decree) and is not cancelled by remarriage.
When considering the amount and appropriateness of lump sum alimony payments, the Alabama trial court may ignore the receiving spouse’s separate estate. In addition, a lump sum alimony payment may be a nontaxable transaction.
Periodic Alimony: Alimony paid as regular support payments over a period of time differs from alimony in gross in that it can be modified and will end upon remarriage or cohabitation of the receiving spouse or death of either spouse. Periodic Alabama alimony is tax deductible by the payer spouse and included as income by the receiving spouse.
Factors Considered by the Court: An award of alimony is completely discretionary in Alabama and is only awarded on a showing of need by one spouse together with the ability to pay by the other spouse. There is no statutory formula to calculate the amount of alimony (as with child support).
The factors the Alabama trial court considers in determining whether to award alimony are:
Alimony can be awarded to either party by the court even if they did not request it in the divorce proceedings. Alimony is rarely awarded in marriages of less than twelve years and is generally reserved for situations where one spouse has been economically dependent upon the other for most of a long term marriage.
“Rehabilitative” or temporary alimony is sometimes awarded in shorter term marriages, where one spouse needs support for a limited amount of time (perhaps two to three years) until they are able to transition back into the job market.
Retirement Earnings or Pensions: In order for the trial court to include retirement benefits in the estate of either spouse, Alabama Code requires the parties to
The non-covered spouse may not begin receiving these benefits until the covered spouse either begins to receive his or her benefits, or reaches the age of sixty five.
Termination of Alimony: Periodic Alabama alimony terminates based upon the length awarded by the court. The support also terminates upon the death of either spouse, or the remarriage or cohabitation of the receiving spouse. Cohabitation sufficient to terminate alimony requires a showing of permanence, including such factors as sharing a dwelling, ceasing to date others, payment of the receiving spouse’s debts or purchase of clothes for the receiving spouse by the cohabitant, delivery of mail, voter registration, etc.
In Alabama, the court will not allow parties to mutually agree that alimony continue despite remarriage or cohabitation.
Modification of Periodic Alimony: A fundamental change in circumstances is required to modify alimony. Rarely is alimony adjusted upward based upon the payer’s increased income. More often, alimony is decreased based on the payer’s decrease in income due to circumstances beyond their control.
Violation of Periodic Alimony: If a paying spouse fails to make alimony payments, the receiving spouse may enforce the court ordered alimony award by filing a petition to have the paying spouse held in contempt of court. There is no state agency in Alabama to assist with collection (as with collection of child support), thus the receiving party will have to pursue enforcement through an attorney or pro se.
In Alabama, the court may garnish the payer’s wages up to 25% of the weekly disposable earnings or the amount by which the payer’s disposable earnings exceeds thirty times the minimum wage.
Bankruptcy: If the payer spouse files for bankruptcy, payment of alimony will still be required. Under Federal bankruptcy code, alimony is non-dischargeable.
Tax Considerations: Usually, periodic Alabama alimony is deductible by the payer spouse and is recognized as income by the receiving spouse. In order to be considered alimony by the IRS and have these tax consequences apply, certain requirements that must be met. Alimony in gross is considered property distribution and has no tax implications. Under Section 71 of the Internal Revenue Code, it is possible to explicitly designate payments as non-alimony and avoid these tax implications.
A tax professional should be consulted to understand the ramifications of this option. A tax professional should be consulted if a payer’s alimony payments decrease or terminate within the first three calendar years of the divorce, in order to understand the rule of Recapture, which may change how the payer spouse deducts payments and how the receiving spouse claims the alimony as income.
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