Alimony: A payment or payments that a family court may order one spouse to pay to the other spouse in a separation or divorce. The purpose of alimony is to avoid one party suffering unfair and disproportionate economic consequences in the separation or divorce. In most cases, the person paying the alimony can claim credit for the payment of the alimony and the recipient is taxed on the alimony as if it were income.
Do Alaska courts award alimony in divorce cases? Yes, under the right circumstances. Alaska Statute Sec. 25.24.160 provides in part:
(a) In a judgment in an action for divorce or action declaring a marriage void or at any time after judgment, the court may provide
. . .
(2) for the recovery by one party from the other of an amount of money for maintenance, for a limited or indefinite period of time, in gross or in installments, as may be just and necessary without regard to which of the parties is in fault; an award of maintenance must fairly allocate the economic effect of divorce. . . .
Some of the factors the court will consider in evaluating how to fairly allocate the economic effect of the divorce are (1) how long the parties were married and their lifestyle during marriage; (2) age and health of the parties; (3) earning capacity, education, training and skills of the parties; (4) who had the custodial responsibilities for the children; (5) availability of health insurance; (6) whether one of the parties has wasted marital assets; and similar factors.
The two most common types of alimony in Alaska (also referred to as “spousal support” and “maintenance”) are rehabilitative and reorientation alimony. Rehabilitative alimony may be awarded by the court to minimize the financial impact of divorce on a financially disadvantaged party by helping them complete job training or education so they can find adequate employment. It may be awarded to a spouse who exits a marriage with few job skills and little earning capacity and is designed to support the recipient spouse while they receive job training or other education aimed at improving their ability to become self-supporting. It is to be ordered only for a short duration and may be ordered even with an adequate property division.
Reorientation alimony may be awarded to allow the requesting spouse an opportunity to adjust to the changed financial circumstances accompanying a divorce. It is ordinarily awarded only when the property settlement from the marital estate will not adequately meet the parties’ reasonable needs. Because it is intended only to help a party adjust to life as an unmarried person on a single income, it is only awarded for relatively short periods of time.
Reorientation and rehabilitative alimony are not mutually exclusive. Both forms of alimony may be awarded under the right set of circumstances. But alimony is the exception in Alaska – not the rule. Where a court is faced with two parties, one of whom is significantly financially disadvantaged, and where the parties have property, retirement accounts, bank accounts and similar assets that are either liquid or can be liquidated, and which are sufficient to meet the near-term needs of the financially disadvantaged spouse, alimony is unlikely to be awarded.
The preference in Alaska is to resolve the financial concerns arising from a divorce by means of the property division. Our courts have taken the position that whenever possible, a trial court should provide for the needs of a divorced spouse through a disproportionate division of marital assets; awards of spousal support are disfavored and only appropriate when the marital estate is insufficient to meet the needs of a disadvantaged party.
Alaska courts start with the presumption that a 50/50 division of the marital estate is equitable. That opinion can change, however, depending on the circumstances of the parties. Is one party sick or otherwise in need of support? Does one party lack the ability to support themselves financially due to a lack of education or training? A 50/50 award may not fairly spread the financial impact of the divorce between husband and wife.
Disproportionate awards may run anywhere from 51/49 to 70/30 or greater, though awards that spread the gap between the spouses’ apportionment beyond 65/35 are rare. The thinking is that by providing the financially disadvantaged spouse with a greater share of the marital estate, the spouse will be able to better navigate the changes associated with divorce and becoming a one-income household. But what if there are no marital assets? Then alimony may fill the gap.
On behalf of Hughes White Colbo & Tervooren, LLC posted on Friday, June 30, 2017.