Contrary to what many people think, Texas does have what is commonly known as alimony. The Texas Family Code calls it spousal maintenance. However, the Texas Family Code narrowly defines when spousal maintenance can be ordered by the court. When clients want or need spousal maintenance, I suggest using the Collaborative Divorce process. Collaborative Divorce provides a transparent process that enables clients, their lawyers, and a joint financial professional to openly evaluate the needs of the spouses thoroughly examine the properties and the debts that the parties have, and develop viable options to help the clients successfully transition from a marriage to divorced individuals.
Texas Law on Court-Ordered Alimony (spousal maintenance):
Who Can Qualify for Court-Ordered Alimony in Texas?
Typically, for a party to qualify for spousal maintenance the couple has have been married for at least 10 years, and the spouse who is requesting the maintenance does not have the ability to earn sufficient income to meet his or her reasonable minimum needs. Typically, this would mean that one has been a stay-at-home spouse and the other spouse has been the income earner. Other qualifying guidelines include if the requesting spouse has a disability or there has been family violence; if there has been a conviction of family violence or a protective order has been rendered against the spouse who committed the violence, then spousal maintenance may be awarded. The variable is that awarding spousal maintenance is totally up to the discretion of the Court, and some judges still don’t like to award spousal support.
There is what is known as a “rebuttable presumption” that spousal maintenance is not warranted in a case unless the spouse seeking maintenance has exercised diligence in:
- Earning sufficient income to provide for his or her minimum reasonable needs; or
- Developing the necessary skills to provide for his or her minimum reasonable needs during a period of separation and during the divorce is pending.
In Texas, How Long Can a Court Order Alimony be Paid?
Unless the Court finds that the party requesting alimony has a disability or their spouse has committed family violence, the parties must be married at least ten years for the requesting party to qualify for alimony. . With a 10-year, a 20-year, or 30-year or more length marriage, the amount that a client may be entitled to receive increases and the length of time it can be ordered to be paid increases. If a spouse has a mental or physical disability that makes them unable to earn sufficient income to provide for their reasonable needs or if the requesting spouse is the custodian of a child of the marriage who requires substantial care and personal supervision because of a physician or mental disability that prevents the spouse from earning sufficient income to provide for that spouse’s reasonable needs, then the alimony may be ordered to continue for so long as the requesting spouse meets those criteria.
What is the Range of Court-Ordered Alimony (spousal maintenance) in Texas?
Alimony can be ordered by the Court to be the lesser of:
- $5,000.00 per month or
- 25% of the paying spouse’s gross income, which is defined by the Texas Family Code
What would disqualify a person from receiving Alimony (spousal maintenance)?
There are a number of factions that the Court can consider when deciding whether or not to award maintenance. One of the strongest considerations is if, at the end of the divorce, the portion of the estate that is being ordered to the spouse seeking alimony is sizeable enough to provide for that spouse’s minimum reasonable needs, the Court will not typically award alimony.
When Can Court-Ordered Alimony (spousal maintenance) be modified or terminated in Texas?
Court-ordered alimony can be modified in Texas if the paying spouse’s circumstances change, such as a loss of employment not the paying spouse’s fault.
Court-ordered alimony can be terminated in Texas if the Court finds that the person receiving alimony is cohabiting with another person with whom they have a dating or romantic relationship which meets certain other criteria.
So, what is the difference between Court-Ordered Alimony (spousal maintenance) and Contractual Alimony?
Contractual Alimony can be agreed to by the parties to a divorce without any basis or court-finding as required in Court-Ordered Alimony
Technically, if the alimony is contractual and set out in the decree it is part of the Court Order, but only if it is Court-Ordered based on the criteria set out above about Court-Ordered Alimony do the rules regarding the qualifications, modification and termination apply.
Historically, alimony was deductible from the paying party’s income and claimed as income on the receiving party’s tax return; however, with the most recent Federal Tax Code changes, alimony is not deductible by the payor or included as income on the person receiving the alimony’s tax return. This is a significant change in the motivation clients had to include alimony as a part of their divorce settlement.
If Alimony is no Longer Tax Deductible, Why Do Clients Agree to it Outside a Court-Order?
Particularly in cases handled through the Collaborative Divorce Process, clients have the flexibility to look at options including alimony, which will meet the needs of the clients despite the fact that it is no longer tax deductible.
For example, if there is a large estate that primarily includes retirement accounts and investments that cannot be withdrawn without significant taxes or penalties, alimony can be a great tool to use to enable the less income-earning spouse to have monthly income while they are going to school or waiting to retire and be able to take those investment funds or retirement without the penalties and significant taxes
Why is the Collaborative Divorce Process a Better Choice for Divorce?
The Collaborative Divorce process is so much better, because we look at the whole estate and then the impact, not only today, but also long term, for both spouses.
With the help of a financial professional on the Collaborative Divorce process team, we will look at short-term and long-term financial planning, including estate planning, and that enables us to be a lot more creative than when a Court is only able to look at the basic criteria of the Texas Family Code on this question.
I found that for some of my older women clients, they’re not looking so much to get a 60/40 split; this is not a numbers game for them. They’re thinking, ” How am I going to buy gasoline and pay my utilities and visit my grandkids? Where am I going to live? How am I going to keep the lights on?”
In a Collaborative Divorce, the clients and their team come up with a plan into which they’ve had input with a professional that they trust-the financial professional in the case–someone that’s a numbers person, someone that does this for a living, both clients usually leave with a much more satisfactory resolution of their case than if a Court makes all their decisions.
THEY, the Clients, have made their decisions with full information that they need to make an informed decision based on their own unique situation.
Clearly, with a divorce, the clients’ lives are going to change as they transition from a marriage, but when they work together in a Collaborative Divorce process there is typically a win for both sides because together they make an agreement that will enable them to come out of their marriage financially stable and secure as they move forward.