What is the Difference Between Alimony & Spousal Maintenance?
Although most people refer to alimony and spousal maintenance interchangeably, they are not the same. Texas law does not recognize alimony, believing that a spouse’s duty to provide for their partner financially ends when you sign the divorce papers. However, Texas law does promote periodic spousal maintenance.
If you are looking to receive spousal maintenance or are in the position of having to pay spousal maintenance, you need an experienced Southlake alimony attorney from Mims Ballew Hollingsworth | Family Law to guide you through the process.
What Factors Determine Spousal Maintenance Payments?
Texas Family Code §8.051 does state that a spouse may be eligible for spousal maintenance if the spouse requesting maintenance would lack sufficient property, including the spouse’s separate property, upon the dissolution of the marriage.
According to Texas law, the spouse requesting maintenance is eligible to receive spousal maintenance if the spouse:
- is unable to earn sufficient income to provide for their basic needs due to a mental or physical disability;
- has been married to the other spouse for at least 10 years and is unable to provide financially for themselves to care for their basic needs; or
- is taking care of a special needs child, which prevents the spouse from being able to provide financially for themselves to care for their basic needs.
There are several factors that the court will consider in determining spousal maintenance payments, such as:
- the ability of each spouse to care for themselves independently;
- each spouse’s employment skills;
- the duration of the marriage;
- the age, employment history, and earning ability of the spouse seeking maintenance;
- the contribution of each spouse to the education or training of the other spouse;
- whether each spouse brought the property into the marriage; and
- marital misconduct.
These are only a few of the factors that are considered by the court in determining maintenance payments. This list is not exhaustive.
How Long Can Spousal Maintenance Last?
The length of the marriage will determine how long the spousal maintenance distributions will last:
- For couples married at least 10 years: no more than five years;
- For couples married at least 20 years but no more than 30 years: no more than seven years; and
- For couples married for at least 30 years or more: no more than 10 years.
Although Texas courts can order spousal maintenance, they will never order it for an indefinite time period. The courts aim to have spousal maintenance last for the shortest time possible.
Court-Ordered v. Contractual Alimony
Although Texas courts do not recognize alimony, couples can enter into private contractual agreements promising alimony payments to each other upon the dissolution of their marriage. This is known as contractual alimony.
While court-ordered alimony can be enforced by courts (not recognized by public policy in Texas), contractual alimony is each party entering into a valid contract and establishing a party’s duty to pay alimony. Regarding contractual alimony, both sides need to agree to the terms of the contract, but no parameters apply.
A divorcing couple can lay out the terms of alimony in a prenuptial, post-nuptial, or in the Final Decree of Divorce. The Final Decree of Divorce is a binding legal document that lays out all the decisions related to the divorce.
A benefit of contractual alimony is that both parties may agree to higher maintenance payments than indicated by statutory requirements. A downside is if one party does not stick to the contract, the court will only enforce the minimum amount required by statute.
What is the Maximum Amount Allowed for Court-Ordered Spousal Maintenance in Texas?
Texas Family Code § 8.055 establishes the maximum allowable amount in spousal maintenance. A spouse is only obligated to pay the lessor of:
1) $5,000, or
2) 20% of their monthly gross income
Gross income is calculated by adding up everything a spouse earns monthly. This would include:
- Wages, overtime, and tips;
- Interest, dividends, and royalty income;
- Self-employment income;
- Net rental income; and
- All other income actually being received.
Tax Implications for Alimony or Spousal Maintenance
According to the 2017 Tax Cuts and Jobs Act, there is no longer a requirement to pay taxes on alimony. The spouse paying alimony can no longer deduct alimony or maintenance payments on their taxes, and the spouse being paid alimony does not need to claim it as income.
The Internal Revenue Service issued a clarification that as of January 1, 2019, the above terms apply to all divorce or separation agreements after December 31, 2018.
This also applies to any divorce or separation agreements finalized on or before Dec. 31, 2018, and modified after December 31, 2018, as long as the modification:
- Amends the alimony or separate maintenance payments; and
- Provides the payer spouse cannot deduct the payments and the receiving spouse cannot include the payments as income.
Future Modifications or Termination of Spousal Maintenance
According to Texas law, in order for a spouse to receive a modification of their spousal maintenance, there must be a “material and substantial” change in circumstances. This change in circumstances could apply to either the spouse receiving maintenance (recipient) or the spouse providing maintenance (payor).
In order for the recipient spouse to receive a maintenance modification, they must file a motion with the court. A hearing will be scheduled in order to determine if they qualify for a modification to their payments.
Maintenance payments will be discontinued in the following circumstances:
- The recipient remarries or is living with a new partner;
- The payor has lost their job or has an unforeseen increase in expenses; or
- The recipient’s financial situation has changed, either through receiving an inheritance or becoming gainfully employed, allowing them to financially support themselves.
In order for maintenance to be terminated, the payor must request payments be discontinued by the court. It can be a lengthy process. The experience of a divorce attorney is essential in seeking any type of change to spousal maintenance.
Contact a Knowledgeable Alimony Attorney in Southlake and Nearby
Divorce presents a variety of unknowns. One of them should not be your financial security. If you are going through a divorce, you need the knowledge of the divorce attorneys at Mims Ballew Hollingsworth⏐Family Law. Contact us today to find out how we can negotiate the best outcome for you.