How to Determine Spousal Support
Spousal support, unlike Child support, is not precise nor is it predictable. The approach to calculating amounts for alimony and child support differs substantially. Statutory factors and the discretion of the trial court determine the amount of alimony, unlike the formula based Child Support Guidelines. For alimony, the trial court reviews economic circumstances of the parties and the ability of the supporting spouse to pay, considering all the statutory provisions and the circumstances of the parties. The 1995 statute codifies appellate interpretations of the pre-1995 law and the focus of the 1995 statute is economic. The 1967 statute directed the court to set alimony “as the circumstances render necessary . . .” N.C. Gen. Stat. §50-16.5, whereas the 1995 statute refers in factor (15) to “[a]ny other factor relating to the economic circumstances of the parties that the court finds to be just and proper.” N.C. Gen Stat §50-16.3A(b)(15). The standard for review of a trial court’s decision is abuse of discretion. The claim for alimony may be heard on the merits prior to the entry of a judgment for equitable distribution, and may be reviewed by the court after the conclusion of the equitable distribution claim.
Post Separation Support
The Post Separation Support (PSS) statute has a narrower focus than the Alimony statute with a much shorter list of statutory factors for the court’s consideration than the alimony statute. PSS is intended as an expeditious enquiry focusing on immediate needs and there is no catchall phrase. The verified pleading, verified motion, or affidavit of the moving party shall set for the factual basis for the relief requested.
A post-separation support award in Wake County “is a temporary measure, it is interlocutory, it does not affect a substantial right, and it is not immediately appealable.” Rowe v. Rowe, 131 N.C.App 409,507, 507 S.E.2d 317 (1998).
- §50-16.2A Post Separation Support.
(b) In ordering post separation support, the court shall base its award on the financial needs of the parties, considering the parties’ accustomed standard of living, the present employment income and other recurring earnings of each party from any source, their income-earning abilities, the separate and marital debt service obligations, those expenses reasonably necessary to support each of the parties, and each party’s respective legal obligations to support any other persons.
The Alimony Statute has a better-defined, yet lengthier set of factors for consideration than the Post Separation Support Statute. The court awards alimony upon a finding that one spouse is a dependent spouse, that the other spouse is a supporting spouse, and that an award of alimony is equitable after considering all relevant factors. The court exercises discretion in its review and although the amount awarded is neither absolute nor unreviewable, the clear abuse of discretion standard is a difficult hurdlefor appeal.
Alimony — § 50-16.3A. The alimony statute has a set of sixteen (16) factors for the court to review in determining alimony upon a finding that one spouse is a dependent spouse, that the other spouse is a supporting spouse, and that an award of alimony is equitable after considering all relevant factors. The fifteenth factor includes a catchall phrase of “[a]ny other factor relating to the economic circumstances of the parties that the court finds to be just and proper.” Section 50-16-3A(b) directs the trial court to “consider all relevant factors” when making the determination of alimony. Although pre-1995 statute, case law finding “the trial court must at least make findings sufficiently specific to indicate that the trial judge properly considered each of the factors… for a determination of alimony” is still good law. Lamb v. Lamb, 103 N.C.App. 541, 545, 406 S.E.2d 622,624 (1991) (quoting Skamarak v. Skamarak, 81 N.C.App. 125, 128, 343 S.E.2d 559, 561 (1986).
The Statutory Factors for Alimony Determination:
- The marital misconduct of either of the spouses. Nothing herein shall prevent a court from considering incidents of post-date-of-separation marital misconduct as corroborating evidence supporting other evidence that marital misconduct occurred during the marriage and prior to date of separation;
- The relative earnings and earning capacities of the spouses;
- The ages and the physical, mental, and emotional conditions of the spouses;
- The amount and sources of earned and unearned income of both spouses, including, but not limited to, earnings, dividends, and benefits such as medical, retirement, insurance, social security, or others;
- The duration of the marriage;
- The contribution by one spouse to the education, training, or increased earning power of the other spouse;
- The extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child.
- The standard of living of the spouses established during the marriage;
- The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs;
- The relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support.
- The property brought to the marriage by either spouse;
- The contribution of a spouse as homemaker;
- The relative needs of the spouses;
- The federal, state, and local tax ramifications of the alimony award;
- Any other factor relating to the economic circumstances of the parties that the court finds to be just and proper;
- The fact that income received by either party was previously considered by the court in determining the value of a marital or divisible asset in an equitable distribution of the parties’ marital or divisible property.
In order to determine how much income is available and what the accustomed standard of living of the parties has been, most courts require both parties to submit a financial affidavit to the court, usually on a form required by the particular jurisdiction. In addition, most courts have local rules or Family Court Rules which require parties to provide certain documents to show income. The majority of districts require parties to provide:
- The most recent W-2 or 1099
- Three to five years of income tax returns for the individual and for any business in which a party has a greater than 5% interest
- Three most recent pay stubs
- An employer wage affidavit showing present salary and benefits
It is important to fill out the financial affidavit to show the standard of living on the date of separation as accurately as possible. For the best way to accurately determine financial information, please see our article on “How to fill out a financial affidavit.” Take the time to review your expenses and determine if the amounts are correct. There are some categories which are often under or over stated. Consider trips you have taken in the past 5 years, who actually paid for them? Was part of it a work benefit or award? Did a family member pay? Was it something you and your spouse had saved for for years? Are you still paying for it on a credit card or loan? Are there factors other than your separation which would affect your ability to take a vacation such as a child starting college or a decrease in income? Are there going to be new expenses which will arise due to a change in lifestyle such as a party entering the workforce, or a party needing furniture?
The court when calculating cash flow/expenses of the respective parties then weighs this comprehensive information, reducing it to a monthly flow of financial information, comparing the monthly needs of the parties and any changes that have occurred since date of separation. The basic formula for determining cash flow is income minus expenses, taking into account any assets, which may not be income producing, but will incur a liability to a party nonetheless. This category, like all other categories, is within the discretion of the court to consider all relevant factors. In order to provide a sufficient base in which to determine the actual expenses of a party, you should provide certain documentation including the expenses for the last twelve months. While an alimony award is based on the standard of living of the parties for the last few years of the marriage, it is often not possible to maintain that standard. The more easily verified information you provide the court, the more likely it is that the court will be able to fashion an award of support actually based on the true needs of the parties and the ability of each party to provide income. Some documents you would need to produce in order for the court to craft an appropriate order include:
- The standard during the last year of the marriage, based on actual receipts.
- The expenses as of the date you will proceed to court, based on actual after separation expenses and;
- A good faith estimate on projected expenses (for instance the party is staying with parents until there is a certainty as to the amount of alimony to be awarded, or until the house sells, or some other factor).
Parties should be as realistic and complete as possible. If you are too extreme in setting expenses, the court will tend to disbelieve the entire affidavit. While most people live a bit beyond their means, a disproportionately large budget not supported by either an explanation or a correspondingly large amount of debt is suspect.
HOW MUCH IS “TOO MUCH?”
Prior to the 1995 law there was no provision about the discretion of the court although case law supported that the amount of alimony was within the discretion of the judge. The 1995 amendments codified judicial discretion and now provide that “the court shall exercise its discretion in determining the amount, duration, and manner of payment of alimony.” N.C. Gen Stat. § 50-16.3A(b).
Relevant Case Law
One case prior to the 1995 statute and still good law found it was improper for the trial court in a divorce case to order the husband to make such excessive alimony and child support payments that the husband would be unable to meet his own necessary expenses, would exhaust his entire income, and would be forced to invade his accumulated capital in order to make payments. Beall v. Beall, 290 N.C. 669, 228 S.E.2d 407 (1976).
It is very difficult to have an award of alimony successfully appealed on the amount of support awarded as the standard is “abuse of discretion” which means that if there is any evidence on which the court could have based it’s award, the award will most probably be allowed because the judge, as the trier of fact was much more able to observe the clients and listen to the evidence than an appellate court could. For this reason, it is important to provide the court with as much objective information as possible. While alimony is to be based on need, not fault, the factors the court is to consider will necessarily place information before the court which may color its judgment. It is not possible for any person, judge or not, to be totally objective in any ruling in family court. For this reason, settling a matter before it gets to court is often a good idea. It is important to remember that the payor spouse will probably undervalue the monthly needs of the other party and the receiving spouse will probably overvalue and pad that party’s expenses. The correct amount or duration of support is generally between the two extremes presented.