Chapter 11 Spousal Support and Health Insurance

• Library: Nolo's Essential Guide to Divorce (Nolo) (2020 Ed.)

CHAPTER 11 Spousal Support and Health Insurance

Basics of Spousal Support

Types of Spousal Support and How Long They Last

Temporary Support While the Divorce Is Pending

Short-Term and Rehabilitative Support

Long-Term or Permanent Support

Reimbursement Support

How Courts Set the Amount of Support

Need and Ability to Pay

Earning Capacity

Fault

Negotiating Support With Your Spouse

Evaluating Your Spouse's Resources

Evaluating Your Needs

Paying Spousal Support in a Lump Sum

Payments to Third Parties

Planning for Possible Disability or Death of the Supporting Spouse

Changing the Amount of Spousal Support Later

Tax Planning When You Pay or Receive Support

Basic Rules

If You Receive Support

Keeping Health Insurance in Force

Staying Insured Through Your Former Spouse With COBRA

Special Rules for Military Spouses

Of the many reasons that divorce is so stressful and difficult, making the money that's been supporting one household stretch to support two is high on the list. For women, in particular, concerns about making ends meet can cause a lot of anxiety. Despite the ever-increasing percentage of married women who work, women still earn about 80 cents for every dollar men earn (the number is even lower for women of color). Most women suffer financially in divorce. The prospect of returning to paid work after time spent at home raising kids can also be a source of worry.

Spousal support, also called "alimony" or "maintenance," is designed to help a lower-earning spouse make it through the divorce and the transition into a new single life. (Rules about continuing health insurance coverage after divorce exist for the same reason.) Depending on the length of the marriage and the degree to which one spouse was financially dependent on the other, support can last for many years. However, the nationwide trend is for courts to award spousal support in fewer and fewer situations, and for shorter times when they do award it, because it's so common for both spouses to work or at least be able to return to work. According to one expert, spousal support is awarded in fewer than 15% of divorces nationwide.

In recent years there has been a wave of so-called "alimony reform," with a number of states revising their support laws in ways that the proponents consider more in line with the current realities of how couples earn and work. For example, under a 2012 Massachusetts law, alimony (which is based on guidelines) ends when the recipient has been living with a new partner for more than three months, and also ends automatically when the recipient reaches retirement age for Social Security purposes. The law also places time limits on alimony for marriages that ended before the 20-year mark was reached. New Jersey recently adopted new alimony rules that provide that alimony can be terminated upon cohabitation, that alimony can't last longer than the marriage did, and that all support terminates upon the retirement of the payer or the recipient reaching age 67. In Indiana, spousal support can't last longer than three years unless the supported spouse suffers from a physical or mental incapacity or is caring for a child who does. In Texas, no marriage that lasted fewer than ten years justifies alimony, except under very limited circumstances.

One concern about these new rules is that a few states include provisions for retroactive modification of spousal support. That means that a recipient could be forced to pay back support that was already received. Because support is often negotiated as part of the entire settlement package when the divorce is finalized, opponents argue that it is unfair to allow for retroactive modifications—and it seems likely that judges would decline to implement those provisions in cases where the result would be an adjustment in the overall settlement.

A number of states have established (or are considering) guidelines for spousal support, similar to those already in place in all states for child support. Both payers and recipients may welcome the greater predictability that guideline formulas could bring to the process of negotiating support. Maine, New Jersey, Oklahoma, Pennsylvania, Colorado, Illinois, Massachusetts, New York, and Texas all have established guidelines. Some counties in California also provide guidelines, but these apply only to temporary support pending the completion of the divorce. Spousal support after the divorce is final is still a question for the judge.

Given all these changes, if you are managing your divorce on your own, you might want to pay particular attention to current law in your state. You may want to consult an attorney to get the lowdown on the rules that apply to your situation.

Basics of Spousal Support

Whether one spouse is entitled to support from the other after the divorce starts with the question of need. Will one spouse require financial help to maintain a standard of living comparable to what the couple had during the marriage? There's no hard and fast rule, but in general, the longer the marriage, the stronger the presumption that support is appropriate. A marriage of more than ten years is generally considered a marriage "of long duration" and usually carries with it a starting assumption that some support will be awarded. However, even after a long marriage, if you and your spouse both earn about the same amount and have roughly equivalent assets, a judge is unlikely to award support.

In any event, spousal support is still an element of some divorce settlements and judgments, and it's definitely something you should raise if you believe you will need it. Don't be too proud to ask—in most cases, if you aren't able to completely support yourself immediately after your divorce, it's because of sacrifices that you made while you were married. This goes for both men and women. Men who earn significantly less than their wives and need support are just as entitled to ask for it as women are.

20-20 hindsight ...
" I didn't even explore whether I could have gotten alimony," says one young divorced military spouse. "I thought I wouldn't need it and I didn't want to ask him for anything, and we really rushed through the whole thing, too. Now it turns out I could really use some help and I wish I'd thought about it more then."

In most cases, property is divided first, and then support is set. That's because who gets property is a factor in determining an appropriate level of spousal support. You and your spouse might decide, for example, that one of you gets more of the property instead of getting support. A judge could make the same decision, awarding one spouse the majority of the property and assets to ensure a comfortable future without a need for spousal support.

Of course, if at all possible, it's best not to leave those decisions up to the judge. Spousal support is as unpredictable as the rest of a contested divorce case, and you're both a lot better off working out an agreement yourselves than you are turning it over to a judge.

Where the High Road Leads What does it mean to take the high road where support is involved? It doesn't mean being noble and giving up your right to ask for support, nor does it mean turning over your whole paycheck to your lower-earning spouse. It simply requires that both of you take an honest look at your needs and abilities and try to come to a fair agreement that's structured in the most advantageous way for both of you. (There's more about how to think about that in "Tax Planning When You Pay or Receive Support," below.)

Types of Spousal Support and How Long They Last

Spousal support falls into two broad categories: short-term support and long-term or permanent support. "Reimbursement" support is a kind of long-term support. A spouse may also get temporary support after separation and before the divorce is final.

What type of support is ordered, and how long one ex-spouse must help support the other, are as much in the judge's discretion as is the amount of support. Some judges start with the assumption that support should last half as long as the marriage did, and then work up or down from there by looking at certain factors. (See "How Courts Set the Amount of Support," below.) Most states don't have guidelines for the duration of support, but some do—for example, in Texas and...