Untangling finances in a high-net-worth divorce is often complex, with multiple properties, investments, business shares, overseas assets and even high-value collections to sort and divide equitably. Sometimes, too, comes the question of spousal support, or alimony, particularly if the couple has been married for some time and one partner earns significantly more than the other.
How alimony works
Alimony is meant to provide some financial support to the lower-earning spouse in a marriage. It could be unfair for a spouse accustomed to a certain quality of life to sacrifice their lifestyle at the marriage’s end.
For couples with relatively equal earnings, alimony will most likely be unnecessary, since marital property may be split equitably while the individuals’ earning power remains the same. However, in situations where one partner earns much more than the other, alimony may be awarded in the form of a lump sum payment, a property transfer, or monthly payments.
While some states rely on a formula for determining alimony, high earners are typically excluded from it. Georgia courts go on a case-by-case basis, considering (among other things):
- The length of the marriage
- The earnings or potential earnings of each spouse
- Standard of living
- The age and health of each spouse
- Time for education or training to obtain employment
- Non-financial contributions each person put into the marriage (for example, if one spouse supported the other through medical school or left a career to raise children)
Couples may determine their own alimony agreement, working with their respective divorce lawyers and sometimes a mediator. If they are unable to come to an arrangement, the court can award alimony, deciding how much alimony will be granted and for how long. Allowing the court to determine alimony is a risk for both sides. The higher earner could end up with a burdensome payment, or the supported spouse could receive an award that won’t provide enough to maintain a similar quality of life.
Except in the case of extremely high-net-worth couples or those who have been married for many years, alimony is rarely indefinite. Sometimes support covers the years while one parent is still at home with young children. In other cases, a spouse with a professional career put on hold to care for kids is given time to reenter the workforce. Alimony ends when the supported spouse dies, remarries, or lives with a new partner. A job loss or career change for the higher-earning spouse can also lead to adjustments. Ultimately, alimony is determined upon the needs of the recipient spouse and the payor spouse’s ability to pay.
What not to do when alimony is a possibility
Unfortunately, misconceptions about how alimony is determined and awarded sometimes lead to poor decisions.
If you desire to receive alimony, watch your spending during the divorce. Spending more will not inflate your expenses or warrant a higher alimony award. Instead, the court may decide that you are trying to dissipate marital assets and award you less. You may even end up having to repay your spouse.
If you expect to be the supporting spouse, it is also a bad idea to hide any assets. Your spouse’s attorney may work with a forensic accountant to locate all of your assets and accurately assess the value of the marital estate. You may wind up losing the hidden asset’s value and create a bad impression with the court.
Schedule your consultation today
Determining alimony can be challenging, especially when there is a significant difference between what each spouse earns. The divorce attorneys at Marple Rubin have years of experience working with clients who have complex financial issues. We can help you move through the process thoroughly and quickly. Contact us today to schedule a consultation to move your divorce forward as effectively as possible.