When spouses separate, one party often may need financial assistance or support from the other spouse for a period of time. Alimony is the payment of support by the supporting spouse to the financially dependent spouse. Payments for spousal support can be made in a lump sum or periodic payments typically paid on a monthly basis. To be awarded alimony, a spouse must show the court that (1) he or she is a “dependent spouse;” (2) the other spouse is a “supporting spouse;” and (3) an award of alimony is equitable based on all relevant factors. A “dependent spouse” is one who is substantially dependent upon the other spouse for maintenance and support or who is substantially in need of maintenance and support from the other spouse. N.C. Gen. Stat. §§ 50-16.1A(2), 50-16.3A. A “supporting spouse” is one upon whom the other spouse is actually substantially dependent for maintenance and support or from whom such spouse is substantially in need of maintenance and support. N.C. Gen. Stat. § 50-16.1A(5). In addition, certain acts of adultery by either party during the marriage may either bar or guarantee alimony.
Post Separation Support
When spouses separate, one spouse may need financial assistance or support prior to an award of alimony. Post separation support is spousal support to be paid before the court awards or denies alimony. An award of post separation support, once granted, ends on the earlier of one of two dates: (1) the date designated by the court in its order awarding post separation support, or (2) the date on which the court enters an order awarding or denying alimony. A dependent spouse is entitled to post separation support if the court finds that the resources of the dependent spouse are inadequate to meet his or her reasonable needs and the supporting spouse has the ability to pay the post separation support.
In awarding post separation support, the court considers the financial needs and circumstances of the parties, including the parties’ standard of living during the marriage, the financial needs of the parties, the earning capacity of the parties, the present employment income of each spouse, and the debt obligations of the spouses. The court considers marital misconduct by both parties in determining whether to award post separation support and in calculating the amount of post separation support.
Amount and Duration of Alimony
The amount of an alimony award and the length of time it will last are completely within the discretion of the court. The amount of alimony awards vary greatly; there is no formula which determines the alimony amount. Generally, the court considers the financial needs of the dependent spouse and the supporting spouse’s ability to pay the alimony. Under N.C. Gen. Stat. § 50-16.3A, the court considers the following sixteen factors to determine the amount of an alimony award and how long it will be awarded:
- The marital misconduct of either spouse;
- The relative earnings and earning capacity of each spouse;
- The ages and physical, mental, and emotional conditions of each spouse;
- The amount and sources of earned and unearned income of each spouse;
- The duration of the marriage;
- The contribution of one spouse to the education, training, or increased earning power of the other spouse;
- The extent to which finances of a spouse will be affected by a spouse serving as a custodian of the minor child;
- The standard of living during the marriage;
- The relative education of each spouse and the time or training necessary to enable the dependent spouse to find employment;
- The relative assets and liabilities of the spouses;
- The property brought to the marriage by both spouses;
- The contribution of a spouse as a homemaker;
- The relative needs of the spouses;
- Federal, State and local taxes implicated in an alimony award;
- Any other factor relating to the economic circumstances of the spouses; and
- The fact that income received by a party was previously considered in determining equitable distribution of the marital assets.
Divorce has tax repercussions for both spouses. Generally, payments of alimony and post separation support are taxable income to the dependent spouse and deductible from the taxable income of the supporting spouse. Thus, payments of alimony are included in the gross income of the dependent spouse in an amount equal to the alimony paid during the taxable year. Such payments are deducted in computing the supporting spouse’s adjusted gross income.