Maintenance
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MAINTENANCE
By Sat Tara Kaur Khalsa, MS, LPC
In a divorce there are several things that need to be either agreed to or decided by the Court. The big issues are: parenting time, child support, property division and maintenance (also known as alimony). Unlike child support, there is no statutory formula. In some cases the total amount of maintenance paid over the years can be hundreds of thousands of dollars.
If the Court is making the decision, it will consider these factors:
a) The financial resources of the person who is asking for maintenance. This includes marital property that could generate support, the ability to earn a living and, in some cases, the impact of child support.
b) The time necessary to pursue education or training to find appropriate employment and that person’s future earning capacity. Appropriate employment refers to employment that is suited to that individual and takes into account the expectations expressed during the marriage.
c) The standard of living during the marriage.
d) The duration of the marriage.
e) The age and physical and mental condition of the person requesting maintenance.
f) The ability of the person being asked to pay maintenance to meet their needs while paying maintenance.
Some Important Facts to Know About Maintenance:
1) Even when there is a valid marital agreement giving up maintenance, the Court may review the agreement for conscionability. For example, the Court can set aside a prenuptial agreement if it seems grossly unfair.
2) The statute (C.R.S. 14-10-114) provides little guidance on this issue and it is therefore left to the discretion of the Judge. Opinions can vary widely, making litigation highly unpredictable.
3) If the paying spouse is not currently able to pay maintenance, the Court can require they pay a nominal amount until a later time when they can pay a larger amount.
4) The two big factors are: amount of maintenance and the duration during which it is to be paid. The Court can reserve the option of adjusting maintenance in the future.
5) Maintenance can be modifiable or non-modifiable (contractual). The Court can only order modifiable maintenance. By agreement, those seeking a divorce can negotiate and agree to non-modifiable maintenance.
6) The person seeking to modify maintenance must show that the change of circumstances is so substantial and continuing that the original terms were unfair.
7) Maintenance is a taxable event. It is a tax deduction for the person paying and is taxable income to the recipient.
8) There are complicated tax rules regarding maintenance and child support that should be reviewed with a financial expert to avoid possible later disqualification of the tax deduction.
In summary, maintenance can be an important issue in your case and can make a significant impact in your future financial well-being. Many people over-estimate or under-estimate a realistic settlement range. It is important to receive sound advice about this issue.
Sat Tara Kaur Khalsa, MS, LPC Copyright 2009, all rights reserved
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