Alimony in Alabama
There are two general kinds of alimony in Alabama divorces: 1) one constituting support of the spouse (referred to as "periodic alimony"); and 2) the other representing a property settlement (referred to as "alimony in gross") between the spouses. Parties considering a divorce should consult an experienced Alabama divorce attorney.
Periodic alimony refers to payments that are made periodically for the support and maintenance of the other spouse. Periodic alimony has been described as "an allowance for the future support of the recipient payable from current earnings of the obligor." The purpose of periodic alimony is to preserve the economic status quo of the parties as it existed during the marriage, where possible. It is available to both sexes when warranted. Payments of periodic alimony are taxable to the recipient and deductible for the payor if they meet certain requirements: a) Payments must be in cash; b) Payments are made under a written divorce or separation order or agreement; c) Payments are made to or in behalf of a payee spouse; d) Payor and payee spouse are not members of the same household; e) Payment obligation of payor spouse terminates on death of the payee spouse; and f) The order or instrument does not eliminate the tax consequences of the payments. The determination of the amount of the award is discretionary with the court; however, case law has given us certain standards to evaluate: a) The standard of living during the marriage; b) The parties' future prospects; c) The parties' potential for maintaining their standard of living after their divorce; d) The parties' ages; e) the parties' health; f) The length of the marriage; g) The source or sources of their common property; and g) The conduct of the parties with reference to the cause of the divorce.
As a practical matter, periodic alimony is generally awarded in a divorce from a lengthy marriage where one party stayed at home for a good portion of the marriage developing few or no job skills. Ala. Code '30-2-51 (1975) requires an evaluation of the separate estate of the party requesting alimony to determine whether it is insufficient for his or her maintenance. The payor's separate estate is only taken into account when it has been commonly used by both spouses during the marriage. Many courts and practitioners have used the concept of "rehabilitative alimony" to provide periodic alimony for a specific period of time in order to allow the payee spouse to "get back on his or her feet" and become self-supporting. This may be appropriate when the payee needs to update his or her certifications or licenses or look for a job. The practitioner needs to ensure that the decree or agreement clarifies this intent to limit the periodic payments to a specific amount of time. In order to retain the same tax treatment, this alimony must be subject to the same terminating events as above. Many jurisdictions have informal "rules" for determining the amount of alimony
A material change in circumstances of one or both parties may warrant an increase or decrease in the amount of periodic alimony. However, the voluntary change in income status by the payor does not necessarily warrant a reduction, as the issue is ability to earn and not actual earnings. Periodic alimony terminates upon the recipient's remarriage or cohabitation with a member of the opposite sex. Periodic alimony is also terminated at the death of either party. By case law, alimony may be terminated upon the attainment of self-support by the recipient. Periodic alimony obligations for support are not dischargeable in bankruptcy.
Alimony in gross is part of the property settlement of the divorce and is designed to compensate the recipient for the loss of inchoate property rights in the spouse's estate and constitutes a termination of the parties' property rights. In order to be classified as alimony in gross, the amount and time of the payment must be certain, and the right to the payments must be vested and not subject to modification. It may take the form of a lump sum payment, a number of payments over a specified period of time, or both. Alimony in gross is part of the property settlement and, thus, is not modifiable in subsequent proceedings. However, alimony in gross is subject to discharge in bankruptcy. Thus, the practitioner may want to reserve the issue of periodic alimony even when an award of same is not contemplated in order to provide a mechanism to protect the recipient in the event that a bankruptcy is filed.
The court should consider the following when awarding alimony in gross: a) Earning abilities of the parties; b) Their probable future prospects; c) The source of the marital property; d) The contribution of each to its attainment; f) The duration of the marriage, g) The extent of the offending party's fault; and h) The compensation to the recipient for the loss of future support and statutory inchoate property rights. Examples of situations warranting alimony in gross include an ongoing business run by one party where its value is dependent on his or her continued management. The other spouse may receive payments over time to compensate him or her for the marital interest. This is not support but, merely, termination of the business interest and compensation therefor. Alternatively, when a home was owned by one party but substantially improved during the marriage, the other party may be compensated for that improvement value.