Basics of Maintenance

Maintenance is set forth in the Equitable Distribution Law, DRL, Section 236, Part B. Prior to the enactment of DRL Section 236 was enacted, the statute used the term “alimony”.

The statutory factors, pursuant to Domestic Relations Law Section 236(B)(6), relative to the consideration of maintenance are as follows:

(1) the income and property of the respective parties including marital property distributed pursuant to Domestic Relations Law Section 236(B);
(2) the duration of the marriage and the age and health of both parties;
(3) the present and future earning capacity of both parties;
(4) the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary therefor;
(5) reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage;
(6) the presence of children of the marriage in the respective homes of the parties;
(7) the tax consequences to each party;
(8) contributions and services of the party seeking maintenance as a spouse, parent, wage earner, and homemaker, and to the career or career potential of the other party;
(9) the wasteful dissipation of marital property by either spouse;
(10) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
(11) any other factor which the parties or the Court expressly find just and proper.

In resolving the issue of the appropriate amount of spousal maintenance, the parties in the settlement, or a court in trial, must have regard for the standard of living of the parties established during the marriage, whether the party in whose favor maintenance is granted lacks sufficient property and income to provide for his or her reasonable needs, and whether the other party has sufficient property or income to provide for the reasonable needs of the other and the circumstances of the case and of the respective parties.

The court is charged with looking at all sources of income and property that the parties are able to receive in equitable distribution. Income derived from separate property may also be considered by the court. Maintenance (similarly to child support) is determined on the basis of earning capacity, not necessarily earnings! It is, therefore, well within the purview of the court to impute income to one or both parties in determining the basis for the award of maintenance.

The court is required to look at the present and future earning capacity of both parties so be sure to address for both not only their current situations, but respective abilities to be self-supporting in the future, their ability to continue to earn in the future, and for what period of time, skills and training, and future prospects. The ability to be self-supporting is very fact sensitive and requires careful analysis. Do not just think of Factor #4 as relating to a spouse in a long-term marriage who has not worked in over 20 years, is in mid-to-late 50s, etc., but apply facts to a spouse with young children, still nursing, etc. Self-sufficiency depends upon the ability to achieve a lifestyle equal to that enjoyed during the marriage.

It is the responsibility of the attorneys for the parties to make the court aware of the tax consequences to a payor spouse and payee spouse. Expert
testimony will be needed to provide the court with the tax impact upon each party of various maintenance scenarios, to allow the court to determine which amount most meets the demonstrated needs of the payee and the ability of the payor to make the payments.

Most often considered under the catch-all factor #11 is the issue of fault. While fault may not be considered in the equitable distribution of the marital estate unless it is egregious, there is no such standard applicable to fault as it relates to an award of maintenance. While marital fault does not preclude an award of maintenance, it is a relevant factor that can be considered. Maintenance can be directed by the court or can be provided for in a “valid” agreement between the parties. An award of maintenance is ultimately in the discretion of the court. The overriding purpose of spousal maintenance is to enable the receiving spouse to achieve financial independence.

The reason for imposing a time limitation upon a maintenance award is usually to give the supported spouse a reasonable period of time in order to learn or update work skills and enter the workforce with a view to being self-supporting. The court may award permanent maintenance. DRL Section 236(B)(9). Permanent, or non-durational, maintenance may be appropriate where one spouse’s energies during the marriage were primarily devoted to homemaking and childrearing to the detriment of being able to become self-sufficient and maintain the pre-divorce standard of living. The court cannot make an open-ended award in terms of the amount that is to be paid; there must be a set number.

On the other hand, durational maintenance is that which is required for a fixed period of time to allow the receiving spouse to become self-supporting and in recognition of the pre-divorce standard of living. Maintenance terminates upon the death of either party or upon the recipient’s valid or invalid marriage. DRL Section 236(B)(6)(c).

Maintenance is deductible by the payor spouse and is includable in the recipient spouse’s income. However, if a payment is not true maintenance, the IRS will not allow it as a deduction. A person’s marital status is determined, for tax purposes, as of the end of the calendar year. IRC Section 143(a)(1). Therefore, a person who weds on December 29th is considered married for the whole year and, conversely, a person whose divorce is finalized on December 29th cannot file as a married person. A divorce becomes final on the date the judgment is filed in the county clerk’s office. However, the parties can agree, or the court can order, that the maintenance payments are not taxable to the recipient and not an adjustment to the income of the payor. 26 USCA Section 71(b)(1)(B). The court must have a clear rationale for ordering the payments non-taxable.

Where maintenance and child support are both payable, the amount of maintenance must first be deducted before calculating child support. Family Court has jurisdiction to provide support to a spouse, rather than a former spouse.

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