Alimony is a form of support paid by one spouse or former spouse to another spouse or former spouse as a result of divorce or anticipated divorce. Alimony can be paid periodically for a specified or an indefinite period of time, or it can be paid in one lump sum. A very important thing to note is that a claim for alimony MUST be filed prior to the entry of divorce judgment, or else you will lose any right to alimony payments you may have had.
The “supporting spouse” in the marriage or former marriage pays alimony to the “dependent spouse.” The “dependent spouse” is the spouse who is actually substantially dependent upon the “supporting spouse” for his or her maintenance and support, or is substantially in need of maintenance and support from the “supporting spouse.”
If the Court finds that one spouse is a supporting spouse and the other is a dependent spouse, it can order the supporting spouse to pay alimony to the dependent spouse if it finds that an award of alimony is equitable after considering all relevant factors. The following are some of the factors that the Court may consider in evaluating an alimony claim:
- The marital misconduct of either of the spouses;
- The relative earnings and earning capacities of the spouses;
- The ages and the physical, mental, and emotional conditions of the spouses;
- The amount and sources of earned and unearned income of both spouses, including, but not limited to, earnings, dividends, and benefits such as medical, retirement, insurance, social security, or others;
- The duration of the marriage;
- The contribution by one spouse to the education, training, or increased earning power of the other spouse;
- The extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child;
- The standard of living of the spouses established during the marriage;
- The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs;
- The relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support;
- The property brought to the marriage by either spouse;
- The contribution of a spouse as homemaker;
- The relative needs of the spouses;
- The federal, State, and local tax ramifications of the alimony award; and
- Any other factor relating to the economic circumstances of the parties that the court finds to be just and proper.
An important thing to note is that alimony is fault-based. As factor (1) above suggests, the Court may consider the “marital misconduct” of either spouse in evaluating an alimony claim. The alimony statute also specifically refers to a form of marital misconduct called “illicit sexual behavior.” If the Court finds that the dependent spouse participated in an act of illicit sexual behavior during the marriage and prior to the parties’ date of separation, alimony shall not be awarded. In other words, if the Court finds that you are the dependent spouse and that you cheated on your husband or wife before separating, you will be barred from an award of alimony under North Carolina law.
You and your spouse can also agree to alimony payment terms or lack thereof by contract rather than going to court and asking the Judge for alimony to be awarded. Such terms can be included in a Separation Agreement signed by the two of you, with provisions detailing the amount of alimony to be paid, the length of time it will be paid, and when the payments will terminate. You and your spouse can also agree by contract that alimony payments are waived and that neither of you will receive such payments from the other. Private agreements can be appealing because they are overall less costly than having to go to court. Additionally, it is always difficult to predict what a Judge may rule in your case, so private agreements eliminate the uncertainty you will feel in bringing your case to court.
You should consult with an accountant for tax advice regarding alimony payments whether you are the one making the payments or the one receiving them. Alimony payments are taxable as income to the person receiving them. Also, there are certain tax consequences associated with a decrease in alimony payment obligation or decrease in amount of alimony received over time. It is important to obtain tax advice while negotiating or presenting your alimony case.
Court-ordered alimony payments will terminate by statute when one of the spouses dies, the dependent spouse remarries, or the dependent spouse engages in “cohabitation.” Cohabitation refers to “the act of two adults dwelling together continuously and habitually in a private heterosexual relationship…or a private homosexual relationship” even if the two adults are not married. See N.C. Gen. Stat. § 50-16.9(b). However, these statute-provided termination provisions do not automatically apply to alimony payments agreed to by the spouses in a contract. In other words, unless your agreement specifically describes the conditions upon which alimony will terminate, alimony payments will continue under the terms of the contract even if the spouse receiving the payments remarries or cohabitates, and the Court of Appeals has stated that this is not against public policy.
Alimony is a very complicated part of the divorce process, and it is vital that you have an attorney on your side to guide you through the steps. To learn more about alimony and divorce, call our office at (919) 301-8843 to set up a consultation with one of our knowledgeable divorce attorneys.
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