Calculating Alimony in California – basic terminology and overview
Before discussing Calculating Alimony in California, let’s look at what alimony is and what types of alimony exist.
Alimony is the series of payments that a higher-paying spouse pays to the other spouse during and after the divorce process. The purpose of alimony is to ensure both spouses are on a balanced financial footing to allow each of them to live somewhat the same lifestyle as they did during the marriage.
Types of Spousal Support in California
There are two main types of spousal support paid in California. These include temporary spousal support and permanent spousal support.
Determining Temporary (PENDENTE LITE) Spousal Support
When there is a pendency of marital dissolution, a court may order either spouse to pay any amount to the other spouse for support. Family Code 3600. The same is true in a nullity proceeding if the party for whom support is ordered is found to be a putative spouse. Partner support may also be ordered between registered domestic partners.
A spouse can request for temporary support as early as the time a petition is filed until the final adjudication of the case on appeal or until the time for appeal has passed. A supported party may also seek an order for temporary support pending an appeal.
There are limitations on a court’s authority to order temporary spousal support to an abuser in a case involving domestic violence and a prohibition on such an award if the spouse seeking support has been convicted of attempted murder (or solicitation of murder) of the other spouse.
Purpose and Amount of Temporary Support
The main purpose of temporary alimony is to maintain the status quo of the parties until their property has been divided. The court makes sure an amount is awarded that can maintain the living standards and conditions of the parties in as close to the status quo position as much as possible pending their case resolution. In calculating alimony in California, the court considers the supported party’s needs and the supporting party’s ability to pay. The court may also look at the parties’ accustomed marital lifestyle in making a temporary alimony order.
Use of Support Guidelines
Most courts use a guideline to determine temporary spousal support based on the income and itemized deductions of each party. Local rules may state whether the court has adopted a particular guideline, or the adoption of a guideline may be by custom. Computer programs designed for the calculation of “guideline” child support also typically have adjustments for calculation of temporary spousal support under various guidelines. The guidelines also calculate additional support when a payor has fluctuating income and support is set on a base income the payor reliably earns each month.
Courts are not restricted by statutory guidelines in awarding temporary spousal, as such, they can award any amount. However, the court must equitably allocate the family income considering the needs of each party. The court may also consider other listed factors but it is not mandatory to follow these guidelines as it is the case with permanent spousal support.
Modification of Temporary Award
In the failure of a contrary written or oral stipulation in open court, temporary alimony can be modified by court at any time except to an amount that accrued before the date of filing of the notice of motion or order to show cause to modify or terminate.
Although there is some older authority to the contrary, current cases hold that a change in circumstances is required to modify a temporary spousal support order. A spouse can ask for modification if the paying spouse becomes disabled or ill and can no longer make the payment or if the supported spouse does not make any effort to become self-supporting.
Note that the court retains an inherent authority to reconsider a temporary spousal support order on its own motion, to correct an error.
Termination of Temporary Award
In the absence of a contrary written agreement or oral stipulation in open court, a court may terminate a temporary spousal support order at any time. A temporary spousal support order may also be terminated in case of any of the following events:
- Issuance of a judgment in the case
- Dismissal of the case
- Expiration of the order by its own terms;
- Death of either party; or
- Remarriage of the supported party
Calculating Alimony in California – Long Term Spousal Support
Permanent alimony refers to the spousal support provided for in a family law judgment. This alimony does not necessarily last lifelong. The permanency in these types of orders is that they last for some time after judgment has been made.
The difference between the two types of spousal support is that permanent spousal support is not superseded by an entry of judgment as is the case with temporary support.
Another difference is that in permanent support the court must consider all factors contemplated by the controlling statute.
Mandatory Considerations in Setting Permanent Support
Courts have wide discretion in setting the amount and duration of permanent spousal support. However, this discretion is limited as it must consider all factors listed in family code and may not use a temporary support guideline.
The award of permanent alimony must also reflect the prevailing facts and circumstances, based on the evidence drawn from these circumstances. Courts cannot speculate about the future when calculating alimony in California. In case the existing circumstances change in the future, the spouse can file for the modification of the amount and duration of support.
Family Code and Related Factors
When calculating permanent alimony in California, the court must consider all factors listed in the family code. A court’s failure to consider and weigh each factor in the family code is an abuse of discretion
Some of the factors in the family code that are considered when calculating alimony in California include;
- Earning capacity
- Goal to becoming self-supportive
- Contribution to the attainment of education or training
- Ability to pay
- Consideration of assets used for lifestyle
- “New Mate” Income Excluded
- Needs of Each Party; Effect of Child Support and Nonmarital Cohabitation
- Assets and Obligations of Each Party
- Duration of Marriage
- Age and Health
- History of Domestic Violence
- Immediate and Specific Tax Consequences
- Balance of Hardships
Income Tax Aspects of Spousal Support
For cases that were finalized before December 31, 2018, the paying spouse is required to include spousal support payments as a deduction. The spouse receiving the payments must also report the payment as income.
However, recently there have been changes to the Tax Cuts and Jobs Act that eliminated these requirements, which means the recipient spouse does not have to report the support payment as income. Parties may also expressly modify a pre-2019 existing agreement in order to adopt the tax treatment of the Act if they so choose.