The question of alimony comes up for nearly every divorcing couple. Who gets it? Who has to pay it? How much will it be, and how is that determined? Like I always say, every case is different, but there are some things that tend to stay consistent in most situations. Let’s take a look.
Alimony vs. Maintenance
First of all, in many states, the term “alimony” is no longer used. Instead, it is now called “maintenance,” but it still refers to the same thing: monies paid on a monthly basis from one ex-spouse to another after the divorce is finalized.
In 2019, most people still don’t recognize the phrase “maintenance,” and it is generally still referred to by the public as “alimony.” For the sake of using the correct terminology in this article, I will call it maintenance.
The Formula to Calculate Maintenance
Since I practice in Colorado (and have for decades), I can only write about the laws in this state; the guidelines for calculating maintenance may vary from state to state. In Colorado, there is a formula, though it is not legally binding on the Courts, meaning they are not required to strictly follow this formula when determining how much, if any, maintenance is due.
That said, the Courts often prefer to use the formula probably because they feel it is less likely to be appealed. Even though it’s not necessary, in my opinion, most Courts will generally follow it.
And here is the general core question that determines maintenance: Can the former spouse afford to live a lifestyle that approximates that of the lifestyle she or he had in the marriage without additional financial assistance?
If the answer is yes, the party does not receive maintenance. If the answer is no, he or she does.
Ordinary vs. Contractual Maintenance
There are two types of maintenance: ordinary and contractual. Ordinary maintenance is always modifiable, and it is the most common kind of maintenance the Court will assign.
Contractual maintenance cannot be ordered unless both parties agree to it because it cannot be modified, ever.
So, if you get divorced and you agree to $5000 a month in maintenance, under ordinary maintenance, you can go back to the Court and request that it be changed as your life situation changes through the years. But if you and your former spouse agree to contractual maintenance, no matter how your situation changes, the $5000 per month will always have to be paid, no exceptions.
Most divorce agreements provide that maintenance terminates upon the death or remarriage of the receiving person, even in cases of contractual maintenance.
Years ago I had a client who was a small business owner in town. When he got divorced from his wife, business was booming: his brick and mortar store was constantly crowded and people even wanted to franchise his popular brand.
Everything seemed ideal until he got into a turf war with a competing business across town. Word got out that he did some unsavory things in the heat of competition, and his business went from a goldmine to an empty building, and eventually he ended up filing for bankruptcy.
Unfortunately for him, he had agreed to contractual maintenance with his former spouse. Even in the instance of filing for bankruptcy, contractual maintenance is binding.
If you are preparing for a divorce, it’s best to get legal counsel on all matters, including maintenance. It can save you time, money and heartache in the future. Would you like help? Call us at 303-449-1873 to set up a free consultation.