Alimony and Income Equalization
There are many points of contention in a divorce action, from child custody to asset and debt distribution. After child custody, one of the most contentious issues in a divorce is alimony.
This is due in part to the ambiguity surrounding alimony in Utah.
If you are going through a divorce, well-meaning friends, family, and acquaintances will be happy to share a lot of disinformation with you and give you a lot of bad advice. I don’t want to sound elitist, but if you really want to understand how alimony works in Utah, the only way is to speak to a good divorce lawyer who knows the law and knows how it works.
In Utah, child support obligations are almost always calculated based upon a arithmetic formula set by the Utah Code; you simply plug in the income of the parties, how many children you have, how many overnights each party will have the children and the formula will provide a specific amount of child support. Alimony is not subject to plug n’ play formula, and the court is given broad discretion in awarding alimony.
Many will tell you that you should receive half of your spouse’s income as alimony. Others will tell you that you are “entitled” to alimony that ensures you enjoy to “the same standard of living as you did prior to the divorce.” False.
As a general matter of fact, it is almost impossible for most divorcing people to remain post-divorce at the same standard of living they enjoyed when together; divorce results in duplicate housing and other expenses that did not exist when the couple was together under the same roof.
The Utah legislature has established some statutory guidelines to assist the courts in analyzing alimony, and the Utah courts have further clarified these issues. Utah Code Section 30-3-5(8), lists seven factors the courts must consider in determining alimony, however in this analysis the court gives more weight to the first three factors (1) Financial need of the recipient spouse, (2) the earning capacity of the recipient spouse, and (3) the ability of the spouse to pay alimony.
So what happens when the spouse seeking alimony doesn’t have a financial need? In Dobson v. Dobson (294 P.3d 591, Utah Ct. App. 2012), the Utah Court of Appeals held that “regardless of the payor spouse’s ability to pay more, ‘the [recipient] spouse’s demonstrated need must … constitute the maximum permissible alimony award.’” (Dobson, quoting, Jensen v. Jensen, 197 P.3d 117 (Utah App 2008)). This means that the spouse paying alimony is not required to pay any more in alimony than what the recipient spouse needs. This means that if a payor spouse has the ability to pay more alimony, over and above the recipient spouse’s needs, the court cannot order the payor to pay more just because the payor could pay more.
To put this in a real world scenario, when parties are seeking a divorce they are required to fill out financial declarations that show their monthly income and expenses. If a spouse is seeking alimony, she must show that her monthly expenses are reasonable and that she does not have sufficient income to pay these reasonable expenses out of her own income. Need is not synonymous with income equalization.
In Dobson, the Utah Court of Appeals stated that “the court should undertake the last step [to equalize incomes] ‘with an eye towards equalizing the parties’ standards of living only if there is not enough combined ability to maintain both parties at the standard of living they enjoyed during marriage.” (Emphasis added)
Further, the Court of Appeals has stated “[i]ncome equalization, as imposed by the courts in divorce proceedings, is perhaps better described as ‘equalization of poverty.’ In other words, the courts will equalize the incomes of the parties only, in those situations in which one party does not earn enough to cover his or her demonstrated needs and the other party does not have the ability to pay enough to cover those needs.” (Emphasis added).
Parties in a divorce often artificially inflate their monthly expenses and underreport income to either increase alimony, or decrease the money available thereby decreasing the ability to pay alimony. Under controlling case law, a party should only get, at a maximum, alimony 1) in an amount to meet his/her reasonable monthly need, and 2) at an amount that the payor can afford. The goal of Utah alimony is not to equalize wealth, but to pay necessary expenses and then equalize poverty when needed.
Finally, you may not be news you want, but it’s news you need: an alimony award is different from an alimony payment. Just because a court orders your ex to pay you alimony does not mean you will receive it. If your ex refuses to pay or to pay in full, you can go to the court and ask the court for help in collecting, but unless you know how to do this on your own, you may find that the cost of collecting alimony exceeds the amount of alimony you receive. Worse, if you think that the solution is finding alternate and substitute sources for income to mitigate a failure or refusal by your ex to pay alimony, you risk losing your alimony if your ex can prove that you no longer have a need for it. Do not despair, however. Intransigent ex-spouses who refused to pay alimony are nothing new. If you run into this problem yourself, it’s worth it to consult a good divorce attorney to help you.