If you are going through a divorce in Connecticut, you may have questions about whether alimony applies to your circumstances. Below is a look at how the court makes decisions about whether to award alimony, as well as the amount and duration of payments.
What factors are used to determine if alimony should be awarded?
In Connecticut, alimony is governed by Connecticut General Statutes Sections 46b-82 and 46b-83, depending on when the alimony is awarded. Under Connecticut law, the Connecticut family court may order one party to pay the other party a specific amount of alimony or spousal support for a specified length of time. The decision is left to the discretion of the court, which takes a number of factors into consideration.
These factors include the length of the marriage; the cause of its breakdown; the parties’ age, health, station and occupation; the amount and sources of their income; their earning capacity, vocational skills, education, and employability; the value of their estate; health-related and other special needs of the parties; and how the property was divided in the divorce. While the court must consider all of these factors, it does not have to assign them equal weight, and it has broad latitude in determining alimony awards.
There are instances in which alimony may be appropriate in either long-term or short-term marriages. These include instances such as when there is a disparity in earnings or earning capacity between the spouses, when there exist health concerns for the lesser earning spouse, and/or when a party has made employment-related choices based upon the family’s plan that have resulted in lesser present and future earnings for that spouse.
How is the alimony amount calculated?
Unlike child support awards, which are based on a formula, there is no specific formula to calculate alimony payments. With alimony, the court will look at the total after tax income available for the family’s use and will divide it in a manner the judge deems to be equitable and fair. The judge has wide discretion in reaching his or her decision.
Typically, the court will divide the total cash available for living expenses for the family according to some percentage basis. The more the payer of alimony earns, the less the alimony recipient usually gets percentage-wise. For instance, if one party earns $100,000 after taxes, and the other party is a stay-at-home parent, that total is more likely to be split equally or nearly equally so that both households have sufficient funds. But if the alimony payer earns $1 million, it’s less likely that the sum will be evenly divided between the two households.
Aside from actual earnings, the court will look at what the parties are capable of earning. For people who have been out of the workforce for a number of years, consideration will be given to what kind of work they can do if they return to the workforce, what upskilling or education they would need, what would be a reasonable amount of time for them to return to the workforce, and what their earning capacity would be. We may work with vocational experts to determine earning power, which should be taken into account when formulating alimony. The court will not order someone to go to work and make the amount they have the ability to earn. However, the court may say, “You’re capable of earning that amount; you can choose not to earn it and not obtain a job. It’s your individual choice.” However, the recipient’s earning power will impact the alimony award nevertheless.
The court will also consider the alimony payer’s earning capacity. Sometimes, current circumstances do not accurately reflect the payer’s earning history. Someone with a high earning history may lose their job in the middle of the divorce proceedings and temporarily have significantly lower income, for instance. Or someone may try to intentionally minimize their current income as part of the divorce planning, so that their alimony obligations will be lower. For instance, a self-employed individual may be able to suppress income temporarily. In both situations, the court will consider earning history when determining its award.
How is the alimony duration calculated?
While alimony can be a lifetime award in some rare cases, a periodic alimony award is much more common. Often, the purpose of periodic alimony is to allow the recipient the time needed to become self-sufficient or to reach a certain milestone. For example, the court may look at how long it will take someone who is out of the workforce to update their skills and/or finish certain educational requirements, or for their children to become school-age, old enough to stay home alone, able to drive, or graduate from high school, so that the alimony recipient can return to work full-time.
If parties are older, the court may look at how long the recipient has until the party will reach normal retirement age, is able to begin drawing down on retirement assets without a penalty, and/or is eligible for Social Security.
Can alimony orders be modified after the divorce?
Yes. Alimony automatically terminates with the death of one of the parties, the remarriage of the recipient, or the end of the specified term. For instance, if the alimony term was six years, payments automatically stop at the six-year mark; no one has to return to court to terminate the alimony order.
In addition, alimony can be modified if the recipient begins residing with another adult – whether a romantic partner, roommate, parent, adult child who moves back in – who contributes financially to the household, and said contributions positively impact the alimony recipient’s financial circumstances (“cohabitation”). In these circumstances, the person paying alimony could try to modify the alimony award – to either decrease the amount being paid, suspend the obligation or terminate the obligation – by filing a motion. The payor has the burden of establishing cohabitation and the impacts on the recipient’s financial circumstances. If that burden of proof is met, the court may reduce, suspend, or terminate the alimony payments.
Alimony can be modified when there are substantial changes in circumstances for the payer, such as if they lose their job through no fault of their own, as in a mass layoff, or if they are no longer able to work or do their previous job due to health reasons. In those cases, the payer could move to have the alimony order reduced, suspended for a period of time, or terminated. However, until they have a court order that says otherwise, the payer is required to continue making alimony payments, whether they have sufficient income to do so or not. Once the motion is filed, however, the payer can get retroactive relief back to the time that the motion was properly served (via Marshal) upon their ex-spouse.
A change in the recipient’s circumstances, such as a drastic increase in medical costs or an inability to work due to health reasons, could also lead to the upward modification of alimony orders.
An increase in the payer’s income alone, after the divorce, is not a basis in itself for modifying the alimony orders.
What are the tax considerations of alimony?
Alimony awards created after January 1, 2019, are paid by the payor to the recipient with net after-tax dollars. This means the person who is paying alimony will pay taxes on his or her income at his or her higher tax bracket, and then pay the alimony recipient with those net after tax dollars.
Alimony awards created prior to January 1, 2019, were paid by the payor to the recipient with pre-tax dollars. If your alimony award was created prior to this date, the payor could deduct the alimony payments from the payor’s taxable income, and the alimony recipient paid taxes at the recipient’s lower tax rate on the alimony payments received. By moving the taxability to the lower tax bracketed person, more dollars were generally kept to be used for the divorced parties’ combined living expenses, with less taxes being paid to the government.
Alimony orders issued prior to January 1, 2019, are grandfathered in and therefore subject to the prior tax rules. If parties in that situation modify their alimony orders in the future, they may be able to maintain their tax-advantaged status (of tax deductibility for the payer and taxability for the recipient) as long as this is specified in the modified orders. You should work with an experienced Connecticut family attorney to ensure that your alimony modifications are properly done.
The family law attorneys at Ruel Ruel Burns Feldman & Britt serve as trusted advisors and represent clients in divorce – in the conference room and courtroom – and appeals in Connecticut. If you are considering a divorce or seeking a modification or appeal of your alimony, divorce or child custody orders, contact our family law attorneys at 860-206-9096 or online.