of 17 /17
Spousal Support - Maintenance Scott Baroway Mediation Partners 720-889-2808 Baroway@gmail. com

Spousal Support / Maintenance

Embed Size (px)

Text of Spousal Support / Maintenance

Page 1: Spousal Support / Maintenance

Spousal Support - Maintenance

Scott Baroway Mediation Partners [email protected]

Page 2: Spousal Support / Maintenance



No legal advice is given in this website. Nothing said in this website shall in anyway constitutes legal advice. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. All information presented is for informative purposes only and should not be considered legal advice in any way. Additionally, no attorney-client relationship is established by viewing any information on this website. If you believe you are here to get legal advice in any way, you should leave now. THIS WEBSITE IS FOR GENERAL INFORMATION PURPOSES ONLY.

No Warranties or Guaranties are made regarding accuracy of the information provided.

Page 3: Spousal Support / Maintenance



State law A payment, other than equitable distribution

or child support, to a former spouseEnds upon death of former spouseMay ends upon remarriage and/or

cohabitation depending on agreementFederal tax law

Different requirements than under state lawImportant because of tax consequences

Page 4: Spousal Support / Maintenance

Colorado Maintenance Law (C.R.S. 14-110-114)


Permanent/Long Term May Be Awarded ONLY IF:

Lacks sufficient property to provide for reasonable needs, ANDIs unable to support self through appropriate

employment, OR Is custodian of child whose condition or

circumstances prevent employment outside of home

Page 5: Spousal Support / Maintenance



“Reasonable Needs” – depends on particular facts and circumstances of parties marriage.

“Appropriate Employment”- depends on parties economic circumstances and reasonable expectations established during the marriage.

Page 6: Spousal Support / Maintenance

Statutory Maintenance Factors


1. Actual need and ability to pay (financial resources avail)

2. Length of the marriage3. Age, physical and emotional health of parties4. Standard of living during the marriage5. Earning capacities, educational levels, vocational

skills and employability 6. Ability of paying spouse to meet own needs while

paying maintenance7. Parental responsibilities for children8. Time and expense to acquire education and training

to enable party to find appropriate employment.

Page 7: Spousal Support / Maintenance

Other Maintenance Factors


9. Tax Effects

10. Present Circumstances are controlling rather than historical

11. However historical may be consider to impute income

12. Duration of Maintenance Award1. Continuing or for definite period of time2. Incremental reductions ok if basis3. Expectation of retirement benefits ok to reduce 4. Improper speculation about future NOT allowed

10. Any other factors which the court may deem relevant

Page 8: Spousal Support / Maintenance

The Practical Problems In Determining Maintenance


No formula approach like child support or “rules of thumb” Except “temporary maintenance”

“Standards” have little place in the law of domestic relations

The law grants judges great discretion – rarely overturned on appeal

Page 9: Spousal Support / Maintenance

Maintenance Issues


Permanent vs. TemporaryRehabilitative v.

ReimbursementRetirementCohabitation / RemarriageChanges CircumstancesTaxability

Page 10: Spousal Support / Maintenance

Pre-Decred Maintenance(C.R.S. 14-110-114(2))


Combined Annual Income < $75,000/yrRebuttable Presumption for pre-decree


(40% of higher earners gross income –50% of lower earners gross income)

“Courts shall deviate if “inequitable or unjust”TEMPORARY MAINTENANCE ONLY

Page 11: Spousal Support / Maintenance

“Income” defined


From every source (Same as Child Support)Salaries, wages, tips (all), commissions, indep

contractor payments, bonuses, dividends, severance, pensions, royalties, rents, interest, trust income, annuities, capital gains, moneys from self employment for personal use, social security, workers comp, unemployment, disability, PI case, monetary gifts, prizes, ptsp distributions, reimbursed expenses from work if significant and reduce personal living expenses, alimony received, overtime if required by employer

Self Employment – Income after “ordinary business expenses” – must be real business expense

Lots of Rules and tests here – but no clear line to follow

Subtract maintenance or support paid to prior marriage or children if through court order.

Page 12: Spousal Support / Maintenance

Not Income


Child Support ReceivedMeans tested assistance – SSI, food

stamps, Colorado Work ProgramsIncome from additional jobs from 40+ week


Page 13: Spousal Support / Maintenance

Pre-decree Maintenance Example


Spouse A Spouse B5000/mo 2400/mo40% = $2000/mo 50% = $1200/mo

$2000 – $1200 = $800/mo – presumptive Temporary award

Page 14: Spousal Support / Maintenance

Permanent Maintenance


Awarded in long term marriagesLong term marriages can be as short as

10 yearsTypically 10-15 year marriages in the gray zoneVery fact dependent

Permanent alimony can end/be modifiedSubstantial change of circumstances, e.g.,

retirement, disability of either party

Page 15: Spousal Support / Maintenance



Depends on terms of agreementRemarriage ends permanent and

limited duration alimonyCohabitation not sufficient by itself to

reduce Depends on facts

How close to marriageHow much support provided

Page 16: Spousal Support / Maintenance

Tax Considerations


Alimony is deductible from income for the paying spouse and taxable to receiving spouse

Requirements areWritten divorce or separation instrumentSpouses cannot live together after divorceCash (or cash equivalents)Marriage relationshipMust file separate tax returnsMust terminate at deathMust not be child support

May be deemed child support if terminates or reduces as a result of a child contingencye.g., reduction of alimony on child’s 18th birthday

Review by tax professional may be warranted

Page 17: Spousal Support / Maintenance

Alimony Recapture–IRC 71(f)


Intended to prevent front loading of maintenance OR conversion of property settlement payments into deductible alimony.

If Alimony decreases or terminates during first three calendar years, some recapture (loss of deduction) – talk to accountant.