Michigan divorce law provides a statutory basis for Alimony / Spousal Support when the assets awarded to either party are not sufficient to support them. There are eleven factors taken into consideration when determining if Alimony / Spousal Support should be awarded in a Michigan divorce.
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Factors Considered When Determining if Alimony / Spousal Support should be Awarded in a Michigan Divorce
1. The past relations and conduct of the parties.
2. The length of the marriage.
3. The ability of the parties to work.
4. The source of and amount of property awarded to the parties.
5. The age of the parties.
6. The ability of the parties to pay alimony.
7. The present situation of the parties.
8. The needs of the parties.
9. The health of the parties.
10. The prior standard of living of the parties and whether either is responsible for the support of others.
11. General principles of equity (fairness).
Parish v. Parish 138 Mich App 546 (1984)
It is important to note, that the fault of a party or basis for the breakdown of the marriage, is a relevant factor in awarding alimony/spousal support notwithstanding the notion that Michigan is a no-fault divorce State.
The Michigan Court of Appeals in the case of Myland vs. Myland stated that Michigan divorce law prohibits the use of a rigid and arbitrary formula that fails to account for the parties unique circumstances.
Notwithstanding the Myland case, most courts, mediators and attorneys use guidelines in evaluating a spousal support claim. There are two leading guideline computer programs. One by Springfield publications prognosticater, and another by MarginSoft, written by former Washtenaw County referee, Craig Ross. Some Judges have there own guidelines in determining alimony. These formulas vary.
Modifiable vs. Non-Modifiable
A Michigan divorce court can only order modifiable alimony. However, parties can agree on a non-modifiable award pursuant to the Michigan Court of Appeals case of Staple v. Staple. Caution should always be considered when evaluating a non-modifiable award. For example, if you lose you job, you are still obligated to pay. On the other hand, if your health fails or your income falls, you may be stuck with inadequate support.
Most alimony or spousal support payments are tax deductible to the person paying and tax deductible to the person receiving support. This is governed by Internal Revenue Codes section 71 and section 215.
Addressing potential tax issues in your negotiations can avoid problems in the future. For example, many lawyers believe that alimony payments are always tax-deductible to the person paying and taxable as income to the recipient. This is not the case. In order to qualify for the taxable or tax-deductible status certain requirements must be met. These requirements are often overlooked.
Under I.R.C. sec 215, payments made for alimony are allowed as a deduction. However, in order for payments to be tax deductible, the eight requirements of I.R.C. sec, 71 must be met.
The eight requirements of I.R.C. sec. 71 are:
1. The payments must be made in cash; (e.g. providing a car is not deductible)
2. The payments must be to a spouse or on behalf of a spouse;
3. The payments must be made pursuant to a divorce or separate maintenance instrument;
4. The payments must not be designated as non-qualifying by the payor or non-taxable to the recipient;
5. Spouses may not be members of the same household;
6. The payment must terminate at the recipient spouse’s death;
7. Spouses may not file a joint return; and
8. The payment cannot constitute child support.
The mere use of the word “alimony” or “spousal support” does not make the payment taxable or tax deductible. The proper application of I.R.C. sec. 71 is required.
For a detailed explanation of these issues straight from the IRS visit: http://www.irs.gov/taxtopics/tc452.html
There are many creative ways to both, maximize or minimize a parties’ alimony or support award or obligation in a Michigan divorce, including tax effecting assets, discounting, buy-outs of an obligation, trading assets or debts in exchange for more or less alimony/spousal support and proper application of the alimony/spousal support factors.
Your attorney should be competent in creative solutions to maximize his or her client’s entitlement or exposure. Many attorneys run “Guidelines” to estimate a client’s exposure or obligation for support. While “Guidelines” are appropriate in analyzing child support, Alimony/Spousal support is much more complex.
A confidential consultation is the best mechanism to privately discuss your options.
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Articles on Michigan Alimony and Michigan Spousal Support by the Divorce Guy.
- Alimony and tax considerations: http://www.thedivorceguy.com/alimony-and-tax-considerations/
- Veterans benefits: http://www.thedivorceguy.com/the-veterans-benefit-myth-va-benefits-and-divorce/
Michigan Divorce Cases and Statutes on Alimony and Spousal Support
Michigan Compiled Laws (MCL)
Michigan Court Rule (MCR)
Michigan Court of Appeals (Mich App)
Statutory authority for spousal support in Michigan
MCL 552.23(1): The court may award spousal support as is just and reasonable if the property award is insufficient for the suitable support of either party.
MCR 3.211(B)(4): If spousal support is not granted, the judgment must either reserve the question or state that neither party is entitled to spousal support. If the Judgment is silent, the is is reserved for possible later consideration.
Parish v. Parish 138 Mich App 546 (1984), Factors to be considered in awarding alimony or spousal support.
Uniform Support Order: SCAO forms FOC 10b and FOC 10c. Any provisions regarding spousal support (alimony) must be prepared on a Uniform Support Order. The Uniform Support Order governs if the terms of the judgment or order are in conflict.
Uniform Interstate Family Support Act. This act permits enforcement of an income withholding order by filing it with the State.
Interstate Income Withholding act. Only the FOC can request income withholding from another jurisdiction.
Past relations and conduct of the parties:
Sparks v Sparks, 440 Mich 141 (1992) The Court must make findings on each spousal support factor. The conduct of a party during the marriage may be relevant in an award of spousal support or alimony. Fault is only one factor and should not be assigned disproportionate weight.
Hanaway v. Hanawy, 208 Mich App 278 (1995), The trial court is in the best position to determine the extent to which each party’s conduct contributed to the breakdown in the marriage in evaluating alimony and spousal support claims in Michigan.
Johnson v Johnson, 346 Mich App 418 (1956), The length of the marriage is a relevant factor in evaluating alimony and spousal support claims in Michigan.
Ability to work:
Sullivan v Sullivan, 175 Mich App 508 (1989), A temporary award of alimony or spousal support in Michigan is not fair when there is serious doubt about a party’s ability to support herself after an award of temporary support.
Goal is to balance incomes:
Magee v Magee, 218 Mich App 158 (1996), The objective of an award of spousal support or alimony in Michigan is to balance the incomes and needs of the parties in a way that will not impoverish either party.
Pension benefits maybe distributed through a Michigan divorce property division or spousal support:
Demman v. Demman 195, Mich App 109 (1992), Age is a factor in determining spousal support or alimony awards in a Michigan divorce.
Un exercised ability to earn income:
Knowles v Knowles, 185 Mich app 497 (1990), The ability to pay spousal support includes the un-exercised ability to earn income if income.
Health of the parties:
Lesko v Lesko, 184 Mich App 395 (1990) Health is relevant to the ability to work and to the person needs of a spouse seeking spousal support or alimony in Michigan.
Modification of Michigan alimony or spousal support
Crouse v Crouse, 140 Mich App 234 (1985) Spousal support is modifiable upon showing of a change in circumstances. Moving party must show by a preponderance of the evidence.
Staple v Staple, 241 Mich App 562 (2000), parties can waive the statutory right to modify spousal support.
MCL 552.28 creates the statutory right to modify spousal support.
Ackerman v Ackerman 163 Mich Ap 796 (1987) Remarriage in and of itself is insufficient to terminate spousal support, however it is pertinent.
Crouse v Crouse 140 Mich App 234 (1985) Cohabitation with an unrelated person does not constitute a de facto marriage and justify the termination of Michigan alimony or spousal support.
Change in need
Aussie v Aussie, 182 Mich App 454 (1990): Changes in need including the loss of a home, legal expenses, and unforeseen costs are sufficient factors to extend the period of Michigan alimony or spousal support.
Change in ability to pay
Boyer v Boyer, 30 Mich App 623 (1971) Ability to pay is relevant to a determination if Michigan alimony or Michigan spousal support should be increased or decreased.
By: Daniel Findling
The Divorce Guy, Michigan Divorce Attorneys and Specialists