Financial Support 101
It is crucial for anyone considering a divorce to have a clear picture of what they want out of their new lives. Sometimes achieving this picture requires financial support, in the form of alimony (often called spousal support) and/or child support.
Alimony and Spousal Support
Alimony is a periodic payment by one spouse to the other, either during or after a divorce. The court may award alimony to a spouse who shows financial need or if the court determines it is appropriate for other reasons. The purpose of an alimony award is to allow each spouse to maintain the standard of living the parties became accustomed to during the marriage. However, the ultimate goal is to provide the recipient spouse the ability to become self-supporting; thus, the court expect both spouses to become self-supporting within a reasonable amount of time after divorce.
How Do Courts Determine Alimony?
Either party to a lawsuit for divorce or separation may agree to pay alimony or be court-ordered to do so. There is no legal obligation to pay spousal support by one party to the other until there is a court order.
Alimony can only be awarded before the final ending of the marriage. Failure to make a claim for alimony as part of a divorce means that a party cannot come back later after the marriage has ended and start an alimony claim. That being said, in certain jurisdictions (namely, Virginia), the court may order a “reservation” of the right to seek spousal support, which extends the period that a spouse may ask for support beyond the date of divorce.
If there is a signed agreement containing provisions for alimony payments, the court is likely to be bound by that agreement, meaning the court will not be able to change the agreement as part of a divorce. As with many other issues that could come up in a divorce case, the parties can agree on many support terms that a court otherwise have the authority to do on its own. As an example, the court only has the authority to award alimony as a periodic payment from one spouse to the other. If the parties resolve alimony by written agreement outside the court, however, they could specify payment of a mortgage or other expense as alimony.
Types of Alimony
Alimony pendente lite (alimony before the divorce becomes final) - A court can award this type of alimony between the time a divorce case is filed (and a request for alimony is made) and the time the divorce is final. The purpose of this type of alimony is to maintain the status quo during the divorce.The main considerations for the court in a pendente lite hearing are the needs of the spouse seeking alimony balanced against the financial ability of the other spouse to provide support. A pendente lite alimony award does not necessarily mean that alimony will be given after the divorce.
Rehabilitative alimony - This is the type of alimony most likely to be awarded. Usually it is associated with a time-limited goal such as going back to school. For example, a court may award rehabilitative alimony for the two years that it takes a spouse to go back to school and finish a degree program that will enable that spouse to be self-supporting.
Indefinite alimony - This is a relatively rare type of alimony awarded with no specific end point. Indefinite alimony is usually awarded if (because of your age, an illness, or a disability) one spouse cannot make reasonable progress toward becoming self-supporting; or, there is a substantial difference between the parties’ respective financial situations. An indefinitely alimony award may be modified, extended, or ended in the future. This may happen if one of the ex-spouses asks the court to consider the alimony amount in the future and circumstances have changed.
Amount of Alimony Awarded
The court will consider a long list of factors in deciding on whether to award alimony, the type of alimony, and how much alimony should be awarded. These factors include, among other factors:
1) The ability of the parties seeking alimony to be wholly or partly self-supporting;
2) The time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment;
3) The standard of living that the parties established during their marriage;
4) The duration of the marriage;
5) The contributions, monetary and non-monetary, of each of the party to the well-being of the family;
6) The circumstances that contributed to the estrangement of the parties;
7) The age of each party;
8) The physical and mental condition of each party;
9) The ability of the party from whom alimony is sought to meet that party's needs while meeting the needs of the party seeking alimony;
10) Any agreement between the parties;
11) The financial needs and financial resources of each party.
Although the court is not required to use a formal checklist, it must demonstrate consideration of all necessary factors, including any that are not expressly listed in this section. Such "other factors" can be defined as any factors that the court may deem necessary or appropriate in order to arrive at a fair and equitable award of alimony.
When Does Alimony End?
Unless agreed to otherwise, alimony ends on (1) the date designated by the court; (2) the death of either party, (3) the recipient’s marriage, or (4) if the court finds that termination of alimony is necessary after a modification hearing.
Parents going through a break up or divorce have a legal duty to support their child based upon their ability to provide that support. Child support cases range from very simple matters involving routine application of child support guidelines, to very complex cases involving the imputation of income to a party who is voluntarily unemployed or underemployed, sometimes even through the use of expert testimony.
Determination of Child Support Obligation.
Ideally, parents will reach an agreement on the amount of child support to be paid and by whom. If they are unable to reach an agreement, then either parent may ask the court to determine the appropriate amount of child support.
Maryland, Virginia, and D.C. all have child support guidelines in place, which provide a formula for calculating child support based on a proportion of each parent's gross income. These guidelines are applied unless a party can show that application of the guidelines would be inappropriate in a particular case, at which point the court makes a determination based upon the needs of the children, among other factors.
The guidelines generally take into account each parent’s income, the support by either parent of other children (such as by prior marriages), day care expenses and health care costs.
What Counts as Income for Child Support Purposes?
For purposes of calculating child support, the guidelines take into account the actual gross monthly income of both parties, before taxes. Actual gross income has a very broad definition. Actual income may include: salaries, wages, commissions, bonuses dividend income, pension income, interest income, trust income, annuity income, Social Security benefits, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, alimony or maintenance received, and expense reimbursements. It is important to note that the child support guidelines take into account all income, not just taxable income.
Voluntary Reduction of Income.
If a parent voluntarily leaves a higher paying position to take a lesser paying job, then the court can still calculate support based on that parent’s higher income at the former job. In this case, the court can say the parent is voluntarily underemployed, and will impute income to that parent. If a parent simply quits his or her job, or is fired as a result of misconduct or bad behavior, then the court has the ability to say that parent is voluntarily unemployed, and continue to calculate child support based on the income from that job.
Alternatively, in either situation, the court can determine what the underemployed or unemployed parent is capable of earning, and impute that amount of income to them. Usually the court will require a vocational expert testimony to make this determination.
When Does Child Support Begin?
Child support is normally paid by the non-custodial parent (i.e. the parent who does not primarily live with the children) to the custodial parent. When there is a court order, it will outline when child support starts and when it is due. When there isn’t a court order, however, the non-custodial parent should still provide some amount of support for the children. Remember that both parents have an ongoing duty to financially support their children. Keep in mind that if a party files for child support with the court, any award that is made will be retroactive to the date the petition was filed. If no support is paid between the time of a child support filing through the date child support is ordered by the court, then there will an arrearage.
What is Included in a Child Support Order?
There are several parts to most child support orders. First, the non-custodial parent will almost always be ordered to make a monthly money payment to the custodial parent, starting on a certain date. It is important to note that the payment is made to the parent, and not the children, with the idea that the funds will be used to pay for the needs of the children.
Second, the order will specify the method by which child support is paid. There are several options here, including payment directly to the custodial parent, payment by automatic funds transfer, payment by earnings withholding, and payment through the Office of Child Support Enforcement.
Third, the order will typically identify the amount of any arrearage, which is the amount of child support that has accrued, but not been paid, from the date of filing a child support petition through the date of a child support order.
Modification of Child Support in Maryland.
Although child support is ordered by the court, and there is a specific amount, frequency, and termination date, child support is always modifiable when there has been a material change in circumstances. If circumstances change, such as income, daycare costs, medical insurance, emancipation, or anything else, then it is crucial to speak with an experienced child support attorney to determine whether it is advisable to seek a modification.
Contact a KGO Alimony and Child Support Attorney
Krum, Gergely, & Oates, LLC is an award-winning law firm located in Rockville, Maryland, with years of experience handling financial support proceedings throughout Maryland, D.C., and Virginia. If you are facing a case involving alimony or child support, contact a KGO Family Law attorney today for a consultation to discuss your specific situation.