Alimony Case Studies in Divorce:
The following alimony case studies are examples and may give you some idea of what kind of factors a court may consider in your alimony case:
Permanent Alimony (under the law prior to September 2014): Long-Term Marriage with Stay-at-Home Parent
The following is a fairly typical example of a case in which a court might have ordered permanent alimony under the law predating September of 2014. The case involves an 18-year marriage, which most courts would have considered "long-term," particularly since one spouse was a stay-at-home parent throughout most of the marriage. As always, keep in mind that court results often differ markedly even in cases with very similar facts:
Jennifer and Peter were married for 18 years before their divorce case went to court. At that time Peter was 52 years old and Jennifer was 48. They had three school-aged children, Alicia, age 16, John, age 13, and Stephanie, age 10. Jennifer is a college graduate. She has no health problems but has not worked outside of the home since Alicia's birth. Peter, who is also in good health, earns approximately $180,000 per year plus an annual bonus. The bonus is not guaranteed and varies in amount, but has averaged about $25,000 per year for each of the past three years.
Peter argued in court that Jennifer should be able to support herself now that the children were all in school. He also argued that his annual bonus should be left out of any alimony determination, because it was not guaranteed.
The court determined that Jennifer was able to seek full-time employment but that due to her lack of recent job experience, she could expect to earn only about $25,000 per year. The court imputed this amount to her as part of the alimony calculation. Rather than include Peter's bonus income in the base alimony award, the court added it on as a percentage amount, ordering him to pay Jennifer $50,000 per year, plus 28% of any future bonuses. The entire amount would be permanent alimony, and therefore taxable to Jennifer as income and tax deductible for Peter.
Open Durational Alimony (under the law as reformed in September of 2014): Long-Term Marriage with Stay-at-Home Parent
How would Jennifer and Peter's case be analyzed under the reformed law?
The first major difference is that their 18-year marriage would no longer be considered "long-term." Under the reformed law, open durational alimony (alimony without a defined ending date) has replaced permanent alimony, but a court cannot order open durational alimony after a marriage lasting less than 20 years without finding "exceptional circumstances." Jennifer could ask the court to consider circumstances such as her age, the degree of her economic dependency during the marriage, and the sacrifices in earning power she made during the marriage, but unless the court specifically finds her circumstances to be "exceptional," she can only receive "limited durational alimony" for a maximum term of 18 years.
If Peter and Jennifer had been married for 20 years or longer, the court could award open durational alimony. The next major difference under the reformed law, however, is that regardless of whether the duration of the award was left open or set at 18 years, if Peter reached full retirement age at 67, he would be permitted to terminate the payments at that time—after only 15 years—unless Jennifer could convince the court that the payments should not end. She could argue, for example, that she needed the payments to continue because her own income was low, that she would not reach full retirement age for another four years, and that Peter could still afford to make the payments. Under the old law, she would not have been required to initiate these arguments. If Peter retired at age 67, it would have been up to him to request a reduction or termination of the award and to demonstrate why he was unable to continue making payments.
Limited Duration Alimony: Intermediate Length Marriage with Higher-Earning Wife
The following case demonstrates that alimony awards are not restricted according to gender. Many women now earn significantly more than their husbands. The same factor analysis applies even when the tables are turned.
Jacob and Eva divorced after 12 years of marriage, when Eva was 40 and Jacob 42. They had two children together, Elise, who is currently six years old, and Willie, who is currently two. Neither Jacob nor Eva has any health issues. Eva earns a high income at a job involving frequent travel. She spends a total of between one and two weeks per month away from home on business. Her current annual salary is approximately $350,000.
Jacob currently works part-time from home earning approximately $30,000 per year. He drives Elise, who is in the first grade, and Willie, who attends day care for three hours each morning, to and from school and other activities. He also cares for the children at home in the afternoons.
After full analysis of all relevant alimony factors, the court awarded Jacob limited duration alimony (taxable to Jacob and tax deductible for Eva) in the amount of $100,000 per year for eight years.
Notably, under the law predating September of 2014, some courts might have considered a marriage of 12 years to be a long marriage justifying an award of permanent alimony rather than a marriage of "intermediate length," calling only for durational alimony. "Intermediate" was never a specifically defined length of time; courts tended to base such decisions on other relevant factors, such as the age, health, and future earning power of each spouse. Under the reformed law, after a marriage of 12 years, an alimony award would be limited to a maximum term of 12 years, barring exceptional circumstances.
Limited Duration Alimony: Intermediate Length Marriage with Two Working Parents
As the following case demonstrates, alimony awards do not just follow marriages in which labor was divided along strictly traditional lines, with one spouse tending the home and children while the other earned the income. Even when both spouses have been continuously employed throughout a marriage, some level of alimony may be appropriate due to significant disparities in income:
Sylvia is currently 32 years old and Marshall is 39. They were married for eight years. Both Sylvia and Marshall have college degrees and are in good health. They have one child, Matthew, who is currently in kindergarten. Sylvia took a few months of maternity leave immediately after Mathew was born, but has otherwise been fully employed throughout the marriage. She currently earns about $45,000 per year. Marshall has also been fully employed throughout the marriage and is currently earning $75,000 per year.
The court ordered Marshall to pay Sylvia limited duration alimony of $10,000 per year (taxable for Sylvia as income and tax-deductible for Marshall), for a period of four years.
No Alimony: Shorter Marriage with Equal Earning Power
As illustrated by the following case, alimony is not always necessary or appropriate. While this couple was married for only six years, significant alimony would have been unlikely even if the marriage had been considerably longer, due to the very similar earning power of each spouse. On the other hand, if the marriage had continued and David, who now has an MBA, experienced a substantial increase in income while Sarah's income remained the same, the outcome may have been different. The outcome also may have been different had David relied on Sarah's income rather than on student loans for tuition and living expenses while earning his graduate degree. In the former case, Sarah might have been entitled to reimbursement alimony:
Sarah and David divorced after six years of marriage. At the time of the divorce, Sarah was 32 and David was 33. Both were in good health and they had no children together.
David is a college graduate who also recently earned an MBA. His current income is $110,000 per year. He has substantial student loan debt, which he will be solely responsible for after the divorce. Sarah is also a college graduate, currently earning about $95,000 per year.
The court declined to award alimony to either spouse, finding that both Sarah and David were fully self-supporting.