Alimony & Inheritance

By Stephanie Reid

Alimony is also known as spousal support or spousal maintenance, depending upon the jurisdiction, and is designed to allow the recipient spouse maintain a standard of living similar to that enjoyed during the marriage once the couple is divorced. In most jurisdictions, inheritances are not considered marital property during the distribution phase of a divorce case, but can significantly affect alimony awards post-divorce. Alimony payments can be increased, decreased or terminated due to significant changes in the financial status of either party.

Alimony is also known as spousal support or spousal maintenance, depending upon the jurisdiction, and is designed to allow the recipient spouse maintain a standard of living similar to that enjoyed during the marriage once the couple is divorced. In most jurisdictions, inheritances are not considered marital property during the distribution phase of a divorce case, but can significantly affect alimony awards post-divorce. Alimony payments can be increased, decreased or terminated due to significant changes in the financial status of either party.

Determining Alimony Amounts

Alimony payments are determined during the divorce proceedings and are generally based upon a series of factors set forth in the state's divorce code. A judge will review the financial status of both spouses to determine an alimony award that will both maintain the recipient spouse's pre-divorce lifestyle and fit within the paying spouse's ability to pay. Other factors considered may include the duration of the marriage, employability of both spouses, spouses' ages, health and responsibilities to minor children, contributions each spouse made to the marriage, tax consequences and available income of both spouses.

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Inheritance Before Divorce

States use one of two methods when dividing property during divorce. Nonetheless, each method treats inheritances as separate property not subject to division. In "community property" states, marital property is split evenly between spouses. States that practice "equitable distribution" award marital assets in a manner that is fair and just based on the circumstances of the marriage. While an inheritance is not subject to distribution, it is considered by the court when determining each spouse's financial situation. For example, interest earned from a reinvested inheritance is considered part of a spouse's financial picture and may be considered when determining that spouse's need for alimony.

Inheritance After Divorce

If a party receives an inheritance after divorce, the court can, on motion, adjust or terminate alimony payments. Alimony payments are intended to provide support to an ex-spouse with a lower earning potential than the other spouse. If the recipient spouse receives a sizable inheritance, the paying spouse may request a reduction or termination of payments. Likewise, if the paying spouse receives an inheritance, the recipient spouse may petition for an increase in alimony based on the paying spouse's increased ability to pay. In either situation, the court will look for a substantial change in financial circumstances to justify the modification.

Expected Inheritance

Not every jurisdiction has addressed this issue, but those that have hold that an expected inheritance is not appropriate to consider when determining alimony awards. An expected inheritance is an amount of money a party expects to receive upon the death of a benefactor. Ex-spouses have attempted to include this speculative amount in motions to increase alimony and courts have held that it is proper to consider the expected amount, but not to require payments out of that amount until the inheritance is actually received. A motion for modification would be necessary in this situation.

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How to Determine Alimony in SC

References

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How is Alimony Calculated in a New York Divorce?

Marriage is as much about money as it is about love. When two people depend on each other financially, especially over an extended period of years, New York takes the position that neither of them should have to suffer economic hardship because the marriage ends. Alimony – also called spousal support or maintenance in New York – diverts some income from the spouse who earns more to the spouse who earns less. As a result, they can share a comparable lifestyle post-divorce.

How to Calculate a California Alimony Payment

There is no guaranteed formula available for calculating an alimony payment in California. However, you can make a fairly educated guess at what your alimony payments might be by analyzing the guidelines used by California courts. You also can get an estimate of your alimony payments by using an online alimony calculator, but alimony calculators will not consider many specific details that may be pertinent depending on your circumstances.

Financial Gifts in a Divorce

In many cases, if you personally receive money as a gift, it will not be affected by a divorce. Generally, gifts made to one spouse are considered "separate property," meaning it belongs solely to the spouse who received it, even if received during the marriage. However, courts may consider the financial resources of each spouse, including separate property, when determining the terms of the divorce. While divorce laws and property division vary by state, courts may have discretion to divide separate property in a divorce depending on the circumstances.

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