Tuesday, December 9, 2014

Financial Implications of Divorce – Support and Alimony

Finances are of course one of the biggest concerns of a potential client during a divorce consultation. Depending on the client’s role, he or she will want to know, how much will I be receiving, or how much will I be paying? There are three important legal terms associated with separation and divorce that come into play: Spousal Support, Alimony Pendente Lite (“APL”) and Alimony. In order to qualify to receive or have to pay any of these obligations, both spouses must be “living separately” or their finances need to be separate.

 “Alimony” is money that is only paid after the entry of the divorce decree and is set forth in a legal divorce document, (either a Divorce Decree itself, or an agreement called a Post Nuptial Agreement or a Marital Settlement Agreement). Alimony in Pennsylvania is based on need, but in practice it is handled differently by the judges of different counties across the state and even different masters and judges within the counties. Some people have the idea that one year of alimony might be awarded for every three years of marriage. In practice, this is not necessarily true and in fact most divorce masters and judges tend to award what they perceive to be an appropriate amount of equitable distribution of current assets rather than award alimony. Additionally, it is not unusual for a master or judge to decline to award alimony unless a couple has been married for a significant amount of time, perhaps seven or eight years. If the parties cannot agree on the terms of alimony, the court will evaluate the needs of the parties and attempt to effectuate economic justice based on the factors set forth in the divorce law. Those factors include the reasonable needs of the parties, taking into account the lifestyle and standard of living established by the parties during the marriage, and the spouse’s ability to pay. Alimony commonly terminates if the recipient dies or remarries, but this can be modified by a court order or the agreement of the parties.

Spousal Support” is a payment on account of the care, maintenance and financial assistance of the dependent spouse, and is not actually dependent on a divorce action being filed. Spousal support can be awarded once the parties are separated; i.e. when the parties no longer hold themselves out to be spouses and typically have ended marital relations and separated their finances.

 Unlike spousal support, alimony pendente lite (“APL”) is only available when there is a divorce action pending between the parties; pendente lite is Latin for “during the litigation.” One cannot receive both spousal support and APL, although in certain cases counsel fees and costs can be awarded in addition to spousal support or APL. Both spousal support and APL, like are determined by using statewide support guidelines that take into account the parties’ incomes. Without child support issues, spousal support and APL are frequently 40% of the difference between the parties’ net incomes. It is important to note that spousal support, alimony, and APL payments are tax deductible for the payor and are considered taxable income to the recipient. 

The calculation of alimony, spousal support, or APL can be challenging and full of pitfalls for the unwary. Although the internet contains some Pennsylvania support calculators, consultation with an experienced family law attorney is advisable for people with questions about how much they might have to pay, or how much they might be entitled to receive.

Kristen Doleva-Lecher, Esquire is an attorney in the law firm of Wolf, Baldwin and Associates, P.C.. She practices primarily out of the Reading office, but the firm has additional offices in Pottstown and West Chester. She is a certified mediator and practices in the areas of family law and business representation. She may be reached by telephone at 610-374-2400 or by e-mail to kdoleva@wolfbaldwin.com.

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