New York spousal support or maintenance (formerly known as “alimony”), are payments made by one spouse to the other, pursuant to either a written agreement between the parties, or by court order. These payments are deductible from income to the payor for tax purposes, and includable as income to the recipient for tax purposes. Furthermore, such payments may terminate upon the recipient spouse’s remarriage, death of either party, cohabitation by the recipient (if agreed by the parties in the agreement), or the holding out by the recipient and another as husband and wife.
The most common issues arising in connection with New York spousal support payments include:
- What sum, if any, should be paid;
- For what period of time should such payments be made (i.e. one year, four years, lifetime);
- How often should such payments be made (i.e. once per week, bi-weekly, once per month); and
- Should such payments continue if the recipient spouse cohabits with an unrelated person for a certain period of time.
To answer these questions, New York Domestic Relations Law requires consideration of the following statutory factors, which were most recently modified in October 2010:
- the age and health of the parties;
- the present or future earning capacity of the parties, including a history of limited participation in the workforce;
- the need of one party to incur education or training expenses;
- the termination of a child support award before the termination of the maintenance award when the calculation of maintenance was based upon child support being awarded which resulted in a maintenance award lower than it would have been had child support not been awarded;
- the wasteful dissipation of marital property, including transfers or encumbrances made in contemplation of a matrimonial action without fair consideration;
- the existence and duration of a pre-marital joint household or a pre-divorce separate household;
- acts by one party against another that have inhibited or continue to inhibit a party’s earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;
- the availability and cost of medical insurance for the parties;
- the care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws provided during the marriage that inhibits a party’s earning capacity;
- the tax consequences to each party;
- the standard of living of the parties established during the marriage;
- the reduced or lost earning capacity of the payee as a result of having forgone or delayed education, training, employment or career opportunities during the marriage;
- the equitable distribution of marital property and the income or imputed income on the assets so distributed;
- the contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and
- any other factor which the court shall expressly find to be just and proper.
In addition, the standard of living enjoyed by the parties during the marriage plays a significant role as well whether the spouse who needs maintenance has the income or property to provide for his or her reasonable needs and whether the other spouse has sufficient income and property to provide for the spouse in need.
Unlike child support, to date, there is no standardized formula to calculate the appropriate amount and duration of spousal support or maintenance in New York. Spousal support determinations are made on a case-by-case bases and are fact sensitive. That said, spousal support is often viewed as “rehabilitative” in nature, which means that spousal support awards are crafted in such manner as to afford a recipient spouse the opportunity to acquire and develop educational or occupational skills sufficient to achieve financial independence. Once that period lapses, spousal support terminates. In certain instances, upon a showing that age, health, or other factors, preclude eventual self-sufficiency of the recipient spouse or an inability to maintain the pre-divorce standard of living, permanent or life-time spousal support or maintenance may be granted.
For example, a person in his/her mid-fifties, or older, who had never worked, or only worked part-time with limited income-generating ability, may be a candidate for lifetime maintenance. An infirm person, a disabled person, or someone who is not able to generate enough income to become self-supporting, may be a candidate for lifetime maintenance.
Where the disparity in the income is great between the two spouses (for example, where one spouse has an earning history of $100,000 and another spouse has an earning history of $15,000), a long-term award, and possibly a permanent award, might be warranted in view of the probability that the lesser income earning spouse would not be able to generate an amount of income which would enable that person to enjoy a standard of living that he/she enjoyed during the marriage.
Temporary Maintenance While a Case is Pending
The amount of the pendente lite award is not necessarily the same amount as the permanent or final award. Most pendente lite orders are awarded based upon affidavits by the parties and affirmations by the attorneys submitted to the courts, and not after a trial, or a hearing, where the parties have an opportunity to testify and are subject to cross examination. Accordingly, the pendente lite award may be adjusted either upward or downward following a trial.
In cases where a party may attempt to deceive the court, or actually lie in an affidavit, attesting that income is far less or far greater than the income actually provable at trial, the court has the authority to modify the pendente lite after the trial retroactive to the date of the application for temporary maintenance.
For cases that have been filed after the October 2010 law went into effect, the methodology for calculating temporary maintenance has changed.
Under prior law, the temporary spousal maintenance award was completely in the discretion of the court, which lead to inconsistent and sometimes inadequate support orders. Now, a statutory formula has been enacted which is applicable for families earning less than $500,000. For families earning greater than $500,000 the court still has great discretion.
Two calculations are performed in order to determine the presumptively correct support amount.
After the two calculations are performed, the court selects the lower sum and awards that sum to the non-monied spouse as annual temporary maintenance. However, judges do have discretion, and some have already used that discretion, to deviate from using the statutory calculations when they find that they create an “unjust” or “inappropriate” result.
Maintenance Distinguished from Child Support
When the person receiving maintenance remarries, or the support terminates by the terms of the agreement or court order, maintenance terminates but child support will continue until the children are emancipated.
Health and Life Insurance
In many situations the recipient spouse may not have a job or may not have a job that entitles such spouse to medical benefits. The payor spouse, who presumably is employed, would have the opportunity through Federal law, commonly referred to as COBRA, to secure medical insurance for up to thirty six months through the employer-sponsored health insurance policy for the benefit of his/her spouse. Responsibility for payment may be pursuant to court order after trial or by agreement of The Parties.
The obligation to maintain medical insurance and/or life insurance generally terminates upon the payor spouse’s fulfillment of the maintenance and/or distributive award obligation.
Where a spouse is unable to secure life insurance because of physical condition or age, other means should be found, if possible, to secure the financial obligations, i.e. – mortgage on property owned by the payor spouse.
These tax considerations for maintenance should be compared to tax considerations for child support where payments are not deductible from income by the payor and are not included as income to the receiving spouse.
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