Keep in mind that the parties to a divorce are free to agree on any amount and duration of spousal support, and spouses who are willing to fairly analyze their respective needs during divorce mediation will succeed in reaching a workable compromise. That said, reaching a fair settlement is often aided by a general understanding of how a judge in California might approach the topic of spousal support. Unlike child support, which is almost always set by a fairly simple set of calculations, spousal support is subject to much greater discretion by the judge.
Spousal support that is paid between the date of separation and the date of divorce is called temporary spousal support. As a general rule, it is almost always higher than permanent spousal support. This is because temporary spousal support is simply calculated based on income, while permanent spousal support is calculated based upon a far broader array of criteria. Indeed, a judge will typically rely solely on a local schedule to come up with the temporary spousal support figure. Truthfully, this might be the only reasonable choice given the short amount of time a judge has to come to a decision - often a hearing of 20 to 30 minutes.
When it comes to determining the amount of permanent spousal support, a judge is not permitted to rely solely upon a schedule. Instead, a judge is required consider a wide range of factors, including the income of each spouse, living expenses, the standard of living enjoyed by the couple during marriage, the future earning capacity of each spouse, and the degree to which one spouse has contributed to the education, licensing, or training of the other.
Notably, California courts are not permitted to consider the income provided by a new partner when calculating spousal support. This does not mean, however, that a higher earning spouse who happens to meet a wealthy new partner can stop working and therefore stop paying spousal support. While the higher earning spouse may no longer need to work to support his or her standard of living, a judge can impute income based upon earning capacity. In other words, a higher earning spouse's refusal to work based upon changed circumstances typically won't change the need to pay spousal support.
While linking up with a wealthier partner and declining to work won't save a paying spouse from the obligation to make support payments, a spouse who receives support should note the effect cohabiting with a new partner can have on spousal support. In California, the law presumes that when a party receiving spousal support moves in with someone of the opposite sex, his or her need for spousal support decreases. This notion is not based upon the income of the new roommate, but rather on the simple fact that sharing living expenses with another person reduces the monthly income required to sustain the same standard of living.
Another factor that a judge will consider when setting spousal support payments is taxes. Alimony is deductible to the paying spouse and taxable to the recipient spouse as income. This can be an incredible advantage when one spouse earns virtually all of the income. The net effect is that the recipient spouse starts at zero and "climbs up" the income tax table, while the paying spouse is able to greatly reduce his or her taxable income. To illustrate how this is can benefit both parties, consider the following example:
John and Jane Smith have been married eight years. John earns $180,000 a year as a consultant, while Jane is a homemaker. Upon divorce, in addition to child support, John agrees to pay Jane spousal support of $60,000 a year for four years.
Now break out those federal tax tables and do some quick match. The amount of tax John pays (filing jointly) on $180,000 is much greater than the sum of the tax John and Jane pay (filing separately) after divorce. Filing separately, Jane declares $60,000 as income, while John's taxable income drops to $120,000. Although the calculations will clearly vary depending on the income tax brackets in effect when the support is received, the net federal tax savings is likely to be on the order of $10,000. Further California state tax savings will only add to the benefit.
As you might expect, a judge will consider the impact of this beneficial tax deduction to the paying spouse when calculating a reasonable spousal support figure. This is in direct contrast to child support, which is tax neutral. In the example cited above, $60,000 a year might sound like a lot of spousal support, but the net cost to John of that support is really closer to $ 40,000 thanks to a huge tax break from Uncle Sam.
When it comes to fixing the duration of spousal support, a judge has three basic alternatives:
Indefinite - This award of spousal support can't be modified unless a change of circumstances is established. It's up to the parties to seek a modification or termination. This is most commonly awarded when the parties have been married a long time (more than 10 years).
Fixed Period - This award specifies a set period of months or years for spousal support. Upon the expiration of the term, spousal support is terminated.
Conditional Termination (aka, a Richmond order ) - This award terminates on a specified date unless prior to that time the recipient successfully petitions a judge to extend support. Typically the petition must demonstrate that certain assumptions made by the first judge never materialized (and the failure of these assumptions to materialize was not the recipient's fault). This type of award is often called a Richmond order, based on the name of the underlying case that established the concept - Marriage of Richmond.
The length of a marriage is the most important factor a judge will use when determining the duration of spousal support. In California, a marriage of over 10 years is a considered a marriage of "long duration." A marriage of long duration requires either an indefinite or conditional termination award of spousal support. In special circumstances, a judge can find that a marriage of less than 10 years is a marriage of long duration as well, but this is not common.
A marriage of less than 10 years is typically known as a marriage of "short duration." A marriage of short duration requires either a fixed period award of spousal support or a conditional termination award. Prior to 1989, a judge was permitted to make an indefinite award of spousal support in a marriage of short duration, but thanks to several cases, this is no longer true.
The standard period of spousal support in a marriage of short duration is one-half the length of the marriage. In other words, if the spouses were married six years, spousal support would continue for three years. The California Legislature has decreed that this is a "reasonable" amount of time for a spouse to become self-sufficient.
Effect of Loss of Employment or Reduction in Salary
First of all, as noted above, a spouse who is obligated to pay spousal support cannot reduce or eliminate support by voluntarily quitting work. A judge can react by simply imputing income to the out-of-work spouse. However, if the paying spouse is legitimately fired and is unable to find employment for many months, a judge may reduce spousal support accordingly. Likewise, if the paying spouse receives an involuntary reduction in pay, he or she can petition the court for a reduced support order.
If a paying spouse voluntarily takes a new job which involves a reduction in pay, a judge is free to impute income at the previous salary without finding that the paying spouse acted in bad faith. In one key case, a pharmacist walked away from his job to attend medical school. Even though the Court of Appeals found that his action was a good-faith attempt to increase his earning capacity, the court held that it was permissible to impute income at his prior salary for spousal support purposes. The Supreme Court of California upheld this line of reasoning. To summarize, a paying spouse who voluntarily reduces his or her income may find that a judge simply imputes income to him or her at the level previously earned.
Increasing Spousal Support
Unlike child support, an increase in the paying spouse's income has no effect on spousal support. This intuitively makes sense, as the goal of spousal support is to allow the receiving spouse to enjoy a standard of living similar to that enjoyed during marriage. However, if the receiving spouse suffers a reduction in income or an increase in expenses and the court still has jurisdiction over the matter, it may be appropriate for a judge to increase spousal support. Of course, the party seeking modification must show a change in circumstances warranting such an increase.