What is spousal maintenance?
In Texas, spousal maintenance, often incorrectly referred to as “alimony,” is the ongoing financial support payments made by one spouse to the other after the dissolution of a marriage. These support payments do not come out of the division of the marital estate, but rather from the future income of the paying spouse after the divorce.
Spousal maintenance is not guaranteed in Texas. Certain statutory requirements must be met to establish eligibility, and after eligibility has been established, the court has wide discretion is whether to order spousal maintenance payments, for how long, and in what amount.
Who can get spousal maintenance?
The spouse who is seeking maintenance must meet a two-part test. To be eligible, part-one and one of the following four situations under part-two must be met.
Part-One: The seeking spouse must show that after divorce he or she will not have enough property to meet his or her minimum reasonable needs (i.e., living expenses).
Part-Two: To meet the second part of the test, the seeking spouse has to show one of the four situations:
- The marriage lasted for 10 years or longer; or
- The seeking spouse has an incapacitating mental or physical disability that prevents him or her from being able to earn sufficient income to meet his or her reasonable minimum needs; or
- A child of the marriage has a physical or mental disability that prevents the seeking spouse from earning sufficient income to meet his or her reasonable minimum needs; or
- The non-seeking spouse has been convicted of family violence. The act of family violence occurred within two years of the suit for divorce and was made against the seeking spouse or their child.
How much spousal maintenance may be ordered?
If the seeking spouse meets the eligibility requirements for spousal maintenance, this does not mean the court will necessarily order the payments. The court still has discretion in ordering spousal maintenance. The court will look to various factors to determine if an award of spousal maintenance is appropriate, including but not limited to efforts the seeking spouse has made to meet his or her minimum needs through employment.
Once the court decides to award spousal maintenance, the next question is how much should payments be? The maximum amount of spousal maintenance that is allowed, is set by statute in Texas. The maximum amount the paying spouse may be ordered to pay is the lesser of $5,000 per month or 20% of his or her monthly gross income. The court may order the maximum amount, no amount or an amount the court believes is reasonable within the guidelines of the applicable statute.
How long does spousal maintenance last?
Texas courts limits spousal maintenance to the shortest reasonable time it takes the seeking spouse to earn sufficient income to provide for his or her minimum reasonable needs. The duration of the maintenance payments often depends on the length of the marriage or the reasons for the awarded maintenance.
The following are the statutory time limits on spousal maintenance awards:
- If the award was based on an act of family violence, the maintenance may last up to five years.
- If the award was based on a marriage of 10 to 20 years, the maintenance may last up to five years.
- If the award was based on a marriage of 20 to 30 years, the maintenance may last up to seven years.
- If the award is based on a disabled spouse or child, the maintenance may last as long as the disability is present.
How is spousal maintenance different from alimony?
Alimony is an ongoing obligation for the support of an ex-spouse that is available in some states that do not have our community property laws as a means of compensating and supporting the non-earning spouse after divorce. Alimony in those states can be rehabilitative, which is similar to the purpose of spousal maintenance in our state, or it can be an ongoing obligation that does not expire unless the receiving spouse remarries, depending on the applicable laws of each state.
Alimony cannot be ordered in Texas courts, but parties can contract to pay alimony. Contractual alimony, which could not be ordered by the court, is not subject to modification by the court as would spousal maintenance.
How are spousal maintenance and alimony treated for taxes?
Spousal maintenance and alimony are typically included as income to the recipient, who must pay taxes on the amounts received, and are excluded from the income of the paying party for taxation. When negotiating spousal maintenance or contractual alimony, parties should be cognizant of the recapture rules in the Internal Revenue Code that allow for the shifting of taxation on payments back to the paying party should those payments reduce more than a certain amount from one year to the next during the first three years of payment. Discussion of these issues with a knowledgeable attorney and a Certified Professional Accountant or other tax advisor is recommended to ensure the tax consequences are fully understood.