Divorce is messy, divorce is costly – and it should be avoided wherever possible. Spouses should always attempt to mitigate their losses and one way to do this is to consider designing the divorce settlement to include alimony.
To many people, the idea of alimony can cause your blood to boil. This negative attitude generally comes from stories about celebrity divorces that require outrageous sums of money to be paid on a monthly basis.
Additionally, alimony causes spouses to have a constant reminder of the divorce every month when the alimony check comes due.
In Texas, the concept of alimony was frowned upon and in fact permanent alimony was banned for quite some time. Now Texas courts are allowed to order “Spousal Maintenance” in certain circumstances:
- Requesting spouse is victim of family violence, or
- Spouses have been married for at least 10 years and the requesting spouse lacks funds or ability to earn to meet his/her “minimum reasonable needs.”
Spouses in Texas, however, can agree to “contractual alimony” if spousal maintenance is not available or acceptable to the parties.
Alimony can help shift some of the cost of the divorce to Uncle Sam. This is because you are shifting income from a higher earning spouse to a lower earning spouse.
In order to qualify for alimony a four-pronged inquiry must be satisfied:
- The alimony payment is received under a divorce or separation instrument
- The instrument does not designate the payment not categorized as alimony (rather a property settlement)
- Persons are not members of same household when payment is made, and
- Requirement to make payments terminates on death of payee spouse.
There is a lot more to alimony and each situation needs special consideration. Nevertheless, it should be considered!