Do you LOVE your divorce lawyer? Be honest – because most people really don’t. But think about it: Your divorce lawyer is someone with whom you are going to be spending a LOT of time over the next few months to a year (or more, if there’s a lot of contention between you and the Mr. or Mrs.). And this person will, by the time it’s all said and done, know all of the most intimate details of your life – personal, romantic, financial, maybe even religious, if there are kids involved. This is the person who will help you figure out what you’re entitled to – and what your spouse is. This is the person who will help shape your relationship with your KIDS, by advocating for you, drafting motions and pleadings, negotiating with Hubby or Wifey. So take your time, ask questions, do your homework, sit down with an attorney that you’re considering hiring, and grill them. Get to know him or her. Interview him or her thoroughly – because after all, no matter what your job is, I can guarantee you’ll never hire for a position more important than your divorce attorney. (Shameless plug: FREE CONSULTATIONS! If you’re considering a split, give me a call. Come in and meet me. Put me on the spot. Because I want to be the divorce lawyer YOU LOVE.)
Okay, so you want to file for divorce in Indiana. You’ve gone online to figure out your estimated child support (https://mycourts.in.gov/csc/parents/), you have dutifully completed your required financial disclosure (http://www.indy.gov/eGov/County/Clerk/Forms/Documents/Marion%20County_Finanacial_Declaration_Form.pdf), and you have checked out the self-service legal center to get the forms you think you will need (http://www.in.gov/judiciary/selfservice/2350.htm), and you have watched the video about representing yourself in court (http://www.in.gov/judiciary/selfservice/2361.htm). And if you’re really smart, you’ve called a lawyer or two for a consultation just to make sure you’ve covered your bases and you know what you’re getting into. But have you done your spousal maintenance homework?
Spousal maintenance, aka alimony, aka spousal support, is alive and kicking in Indiana – and in some cases, you could be on the hook forever. So it’s important to do your homework before you file for divorce, so there are no crazy surprises when your divorce is finalized. This is particularly true because, unlike child support, spousal maintenance obligations can be extremely difficult (and expensive) to modify – if they can even be modified at all. And unlike child support (or your marriage!), they can last forever. (For a lively discussion of this point, check out this article: http://finance.yahoo.com/blogs/daily-ticker/end-permanent-alimony-forever-opponents-122909755.html).
Let’s take a closer look at spousal maintenance in Indiana:
What is spousal maintenance?
Spousal maintenance is an obligation to pay a certain amount of money to your ex, or soon to be ex, that is usually paid monthly, weekly, or every pay period, and is typically (but not always) for a defined period of time. And the person receiving the money is entitled to use it however he or she sees fit – whether he or she needs it or not. There’s generally no obligation for the recipient to account for how the money is spent, so you very well might end up footing the bill for your ex to wine and dine his or her next Romeo or Juliet. Something to think about.
When can spousal maintenance be ordered?
Spousal maintenance is governed by Indiana Code Section 31-15-7. Under that statute, maintenance can be ordered during a period of legal separation, during the pendency of a divorce (the time period between filing the petition for dissolution and when the divorce is actually finalized), or at the final dissolution.
The judge has the authority to order spousal maintenance in three circumstances:
1. If your spouse is disabled (physically or mentally) and, consequently her ability to support herself is materially affected. This is called disability maintenance. Note that your spouse doesn’t have to be completely unable to work – if she can only work part-time, or is otherwise unable to earn what she would be able to make if she were not disabled, the judge can order spousal maintenance. Most of the time, it’s harder to convince the judge to order spousal maintenance for mental impairments than it is for physical ones, and generally the person seeking the maintenance will have to show some strong proof that she needs it. But if the judge does award maintenance in this situation, the maintenance can be for any length of time the judge sees fit, for a temporary period of time or for forever. In some cases, you could still be paying maintenance even if your ex remarries.
2. If your spouse has custody of a child who is disabled, and because of having to care for the child, your ex’s ability to support herself is materially affected. This is called caregiver maintenance, and like disability maintenance, it can be temporary or permanent.
3. If the court determines that, because of her education level, her job history, or some other reason, your spouse needs a little extra help getting back on her feet, the judge can order rehabilitative maintenance. This form of maintenance can be for no more than three years, and is most often awarded where one party has been the homemaker while the other party was the breadwinner and, because she has been out of the workforce for a significant period of time during the marriage, she needs additional training, education, or simply more time to find a job to support herself. Sometimes this can be tied to a specific thing – like, you could be required to pay for your spouse to finish her college degree, or take a certification course. Sometimes it’s just a weekly, monthly, or other periodic payment to help her get back on her feet. This is the only kind of court-ordered maintenance that is specifically limited in the statute to a certain period of time – no more than three years.
Even if the judge does not order spousal maintenance, spousal maintenance can still be imposed by agreement. This means that you and your spouse can negotiate over, and eventually agree upon, a spousal maintenance obligation, during the settlement process. If you agree to pay spousal maintenance and the judge approves your agreement, that obligation is enforced the same way a court order is enforced – through the contempt process.
Can spousal maintenance be modified or terminated?
Maybe. If the maintenance was imposed by court order, for one of the three reasons above, then it can be modified or revoked if a substantial change in circumstances has made the obligation unreasonable. So if your ex-Mrs. marries some rich guy, or your business goes under and you go from six figures to food stamps, you may be able to get the order modified. It’s a difficult process, however, and the burden of proof will be on you to prove that things have changed and now the obligation is unreasonable.
If it was imposed by agreement rather than by court order, though, you will face a number of hurdles if you try to modify your obligation. The court only has the authority to modify the obligation if the court would have had the authority to impose it in the first place – so if you are considering agreeing to pay maintenance because your spouse is disabled, caring for a disabled child, or needs temporary assistance getting back on her feet, you’d better make sure that’s spelled out in your settlement agreement. Otherwise the court will not be able to modify the maintenance obligation at all. Also, if it appears that the payments were really part of the property settlement (like you agreed to pay her maintenance for 10 years in exchange for her keeping her hands off your pension), you will not be able to modify that maintenance.
To put a finer point on this: There was a recent Indiana case where Husband had agreed, over 10 years ago, to pay spousal maintenance to his wife until death. At the time, he was making six figures, and she suffered from rheumatoid arthritis and was unable to work. Husband faithfully paid the maintenance for over a decade, rain or shine, even though both he and Wife eventually remarried other partners. When Husband was forced to take an early retirement for medical reasons, his income was reduced to a fraction of what it once was. He petitioned the court to modify the maintenance. The problem: Nothing in the record indicated that he’d agreed to pay the maintenance on the basis of Wife’s medical condition. I’ll spare you all of the nitty-gritty, but the upshot was that the court did not allow Husband to modify the maintenance, even though Wife’s financial situation was significantly better than his own, so he is still on the hook for $500 a month. Meanwhile, he has had to drain his savings, has gotten behind on his bills, and is truly in dire financial straits. Moral of the story: No matter how guilty you feel about the divorce, no matter how much you still feel responsible to take care of your soon-to-be ex, talk to a lawyer before you agree to pay spousal maintenance – or before you head into that final hearing, especially if your spouse is disabled or has a disabled child. There is a time and a place for spousal maintenance, but make sure you completely understand what you’re getting into before you’re saddled with an obligation you may be paying for the rest of your life.
As always, if you have a question, feel free to leave it here, send an email to me at email@example.com, or call me for a free consultation at 317-460-8969. Thanks for reading!
Do you have kids? Do you have an ex (or a soon-to-be ex)? If so, then you have some figuring-out to do, because it is tax time, and who gets the tax credits for the kids is one of the most fought-about issues in divorce and custody cases.
Fortunately, the Indiana Child Support Guidelines (http://www.in.gov/judiciary/rules/child_support/) offer some guidance on this question. Here is what the Guidelines have to say about the right to claim the minor tax exemption for your kids:
Tax Exemptions. Development of these Guidelines did not take into consideration the awarding of the income tax exemption. Instead, it is recommended that each case be reviewed on an individual basis and that a decision be made in the context of each case. Judges and practitioners should be aware that under current law the court cannot award an exemption to a parent, but the court may order a parent to release or sign over the exemption for one or more of the children to the other parent pursuant to Internal Revenue Code § 152(e). To effect this release, the parent releasing the exemption must sign and deliver to the other parent I.R.S. Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents. The parent claiming the exemption must then file this form with his or her tax return. The release may be made, pursuant to the Internal Revenue Code, annually, for a specified number of years or permanently. Judges may wish to consider ordering the release to be executed on an annual basis, contingent upon support being current at the end of the calendar year for which the exemption is ordered as an additional incentive to keep support payments current. It may also be helpful to specify a date by which the release is to be delivered to the other parent each year. Shifting the exemption for minor children does not alter the filing status of either parent.
The noncustodial parent must demonstrate the tax consequences to each parent as a result of releasing the exemption and how the release would benefit the child(ren). In determining when to order a release of exemptions, it is recommended that at minimum the following factors be considered:
(1) the value of the exemption at the marginal tax rate of each parent;
(2) the income of each parent;
(3) the age of the child(ren) and how long the exemption will be available;
(4) the percentage of the cost of supporting the child(ren) borne by each parent;
(5) the financial aid benefit for post-secondary education for the child(ren); and
(6) the financial burden assumed by each parent under the property settlement in the case.
That is an awful lot of information to consider, so let me break it down for you: The court in your case doesn’t have the authority to award an exemption to anyone, BUT it DOES have the power to order that one parent RELEASE the exemption to the other parent. The default is that the exemption goes to the custodial parent, unless the court orders it released to the other parent. Releasing the exemption involves the custodial parent completing a form (http://www.irs.gov/pub/irs-pdf/f8332.pdf) and giving it to the noncustodial parent. The noncustodial parent then attaches the form to his or her tax return when filing.
So, who’s going to be entitled to claim the kids, anyway? Again, the default is that the custodial parent gets the exemptions. But if you are the noncustodial parent, you may be able to get a court order for the release of the exemption to you. To do so, you will need to file a petition with the court (the same court that handled, or is handling, your divorce/paternity/custody case). You will have to prove that you having the exemption would be beneficial to the kids. The court is going to look at factors including the dollar value of the exemption to you vs. to the other parent, each parent’s income, the age of the child(ren) and how many more years an exemption will be available for him/her/them, the percentage of the cost of supporting the kids that each parent is paying, the financial aid benefit for the kids’ college expenses, and, in cases of divorce, the financial burden each of you was left with under the terms of the property settlement. So be prepared to tell (and show) the judge exactly why you think it’s better for the kids that you get the exemption.
And remember, noncustodial parents are only allowed to claim the exemption if they are at least 95% current on their child support obligation – so make sure you’re paid up before you claim the kids.
If you have any questions about this topic, or about divorce, custody, support, or other family law issues, here’s how to get a hold of me:
- Phone: 317-460-8969
- Email: firstname.lastname@example.org
- Web: http://www.floodfamilylaw.com
Remember, we offer free same-day consultations with Indiana divorce and custody lawyer Kate Flood, so please call. We don’t bite. 🙂