Alimony & Spousal Support
In New York, the family court has original jurisdiction over proceedings for support and maintenance. The Supreme Court has ancillary jurisdiction if the support is part of pending matrimonial proceedings. Your attorney will be able to determine the proper venue for bringing the support issue to the judicial system.
When a support and maintenance action is brought before the Supreme Court, the court assigns a “referee” to the case. A referee is an attorney assigned by the court to conduct trials on the issues surrounding support and maintenance. These referee-attorneys do not represent either party but instead are making an impartial decision, as would a judge. The decision made by the referee will then confirmed by the judge who signs off on the judgment during the divorce proceedings.
If the support case is filed in family court, the matter is assigned to a “support magistrate” who is specifically trained to handle this particular area of the law. In effect, the support magistrate functions as the judge in deciding support and maintenance issues.
Generally speaking, each spouse is obligated to support the other if he or she has the capability and the other spouse does not have the ability to provide for his or her own reasonable needs.
Upon the dissolution of a marriage, the New York equitable distribution law is used to determine how the marital property and income will be fairly divided. The equitable distribution system is designed to recognize that during the marriage both spouses made contributions whether of a monetary nature or not. The equitable distribution and “spousal support” or “maintenance” replaced alimony in how one spouse may support another post-divorce.
How Long Support Lasts
Maintenance is a gender-neutral term, meaning it can pertain to either spouse. The maintenance period of a divorce is only supposed to last until the other spouse can become self-supporting. However, because many ex-spouses will never be able to regain the standard of living he or she enjoyed during the marriage, it is possible for the maintenance period to continue long-term or for the lifetime of the ex-spouse. Maintenance always ends when the spouse paying it dies. Because of this, it is often required during the divorce proceedings that the supporting spouse take out a life insurance policy on their self for the benefit of the spouse receiving maintenance.
Factors in Calculating Support
The maintenance factors include:
- Income and property of the spouses
- Duration of the marriage
- The age and health of the spouses
- present and future earning capacity of both spouses
- The ability of the spouse wanting maintenance to become self-supporting and the amount of time and training it would take to achieve this.
Additional factors include the reduced or lost lifetime earning capacity of the spouse seeking support because they delayed or lost education or career opportunities by taking on familial responsibilities during the marriage. As well as child custody, tax consequences, contributions of the spouse seeking support, the earning capacity of the other spouse, any wasteful use of marital property by either spouse, any transfer of marital property without fair compensation and any other factor the court decides to consider.
Generally speaking, although New York is a “fault” state, the spouse at fault for the divorce usually will not be barred from receiving support, unless the fault was particularly shocking or outrageous.
Tax Consequences
There are income tax consequences of maintenance. The recipient must pay the income tax on maintenance. Maintenance is a deduction to the payer. The court will take this into consideration when determining how much maintenance to award. This is important because, if the recipient’s tax bracket changes as a result, he or she may actually end up, after taxes, with less. The 2009 tax brackets are 10%; 15% plus $835; 25% plus $4,675; 28% plus $16,750; 33% plus $41,754; and, 35% plus $108,216.
If the payer fails to pay the full amount of maintenance awarded by the court, the recipient only pays tax on the amount actually received and the payer only pays tax on the amount actually paid. If the tax returns of the payer and recipient do not match it is likely that both returns will be flagged for an audit.
Your attorney may direct you to discuss the tax ramifications with your accountant and or a tax attorney, particularly for divorces involving high net worth.
Prenuptial or Separation Agreements
If there is a prenuptial agreement or separation agreement wherein the parties have agreed to “opt-out” of the equitable distribution system, the court will then rely on provisions contained in those contracts to determine how the marital property will be divided. As long as the opt-out provision is not unconscionable, it is usually upheld.
Maintenance ends when the spouse receiving maintenance remarries, unless the separation agreement says otherwise. The maintenance would continue if that is what was agreed upon in the separation agreement. Conversely, the separation agreement may state that if the spouse receiving maintenance cohabits with someone else. If so, then the support would terminate.
