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Alimony

A legal obligation by an individual to provide their former spouse with financial support before or after marital separation or divorce

What is Alimony?

In family law, alimony (also called spouse maintenance in Australia, aliment in Scotland, maintenance in the UK and Canada, and spousal support in the United States) is a legal obligation ordered by the court on an individual to provide the individual’s former spouse with financial support before or after marital separation or divorce. Note that alimony is awarded only at the discretion of the court if a particular case meets certain requirements.

 

Alimony

 

History of Alimony

Although it may not be obvious, there is a long history of alimony in family law. Related laws can be found in the Babylonian Code of Hammurabi and the Byzantine Code of Justinian. However, up until the 20th century, alimony was awarded only in case of marital misconduct. It is because existing laws required proof of wrongdoing of either party (i.e., marital misconduct).

However, the introduction of no-fault divorces (i.e., divorces in which the party that files for divorce is not required to provide evidence of wrongdoing of another party) changed the procedures of awarding alimonies. In addition, the accelerated emancipation of women in the 20th century encouraged the courts to remove gender bias in their rulings. Previously, alimony could be awarded only to a woman in case of the husband’s misconduct.

 

Factors in Awarding Alimony

Nowadays, the courts consider various factors in awarding alimony. Some of the factors include the following:

  • Income of each spouse
  • Potential future income of each spouse
  • Spouses’ standard of living during the marriage
  • Length of marriage
  • Age of each spouse at the time of divorce
  • Mental and physical health conditions of each party
  • Presence of fault or marital misbehavior that triggered the divorce

 

Nevertheless, the factors listed above are not absolute, and they can vary among jurisdictions. Such factors affect the amount awarded, as well as they set the time period in which one spouse will receive alimony.

Generally, alimony payments are treated as a taxable income for the receiver while for the payer, the expenses are tax deductible.

 

Alimony vs. Child Support

Alimony must not be confused with child support. As mentioned above, alimony is awarded to compensate one spouse for their financial disadvantage. However, the award of child support is based solely on the existence of a child or children.

As a result of divorce, one parent will obtain primary custody over a child or children. In other words, he or she will be primarily responsible for the child’s or children’s caregiving and day-to-day custody. At the same time, the court may order the non-custodial parent to provide the custodial parent with financial support to cover the expenses for the child’s custody.

 

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Contingent Beneficiary
  • Indemnification
  • Probate
  • Social Security

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!