There are different types of alimony and spousal support payments. A trial court may award either periodic alimony / spousal support, or alimony / spousal support in gross. Periodic spousal support payments “are subject to any contingency, such as death or remarriage of a spouse . . . .” In contrast, spousal support in gross is paid as “either a lump sum or a definite sum to be paid in installments.” and spousal support in gross is nonmodifiable. Periodic spousal support, on the other hand, is subject to modification however, it can be rendered nonmodifiable if the parties explicitly agree to waive the right to seek modification of the award, and include that waiver in the judgment of divorce.
Periodic alimony and spousal support payments.
A periodic alimony or spousal support award is a monthly payment of support paid from one spouse to another spouse. All periodic alimony or spousal support payments terminate upon death of a party which is why a good lawyer will insist the payments are secured by a life insurance policy. Although there is no requirement that periodic alimony terminate on the remarriage of a party, it is not uncommon to find a provision to do so.
The statutory right to modify spousal support is set forth in Michigan Compiled Laws section 552.28, but the statute does not address proper cause or change of circumstances which is a requirement to modify. The requirement for a change of circumstance to modify spousal support is found in case law. Obtaining new (or better) employment, collecting social security or otherwise improving been held to be a sufficiently changed circumstance to modify spousal support.
Parties may agree to waive the statutory right to petition for modification Staple v. Staple. When reaching an agreement for non-modifiable alimony or spousal support, there is something typically bargained for or given in exchange for the agreement, such as a discounted award or a guaranteed term.
A court may consider the following factors in awarding periodic spousal support payments.
(1) the past relations and conduct of the parties;
(2) the length of the marriage;
(3) the abilities of the parties to work;
(4) the source and amount of property awarded to the parties;
(5) the parties’ ages;
(6) the abilities of the parties to pay alimony;
(7) the present situation of the parties;
(8) the needs of the parties;
(9) the parties’ health;
(10) the prior standard of living of the parties and whether either is responsible for the support of others;
(11) contributions of the parties to the joint estate;
(12) a party’s fault in causing the divorce;
(13) the effect of cohabitation on a party’s financial status; and
(14) general principles of equity.
See: Parish v. Parish, Ianitelli v. Ianitelli and Thames v. Thames.
Alimony in gross spousal support payments.
Alimony in gross (spousal support in gross) is a lump sum payment made in installments and is non-modifiable. A spousal support in gross payment is similar to a money judgment or a loan and may include interest paid over a term of years. However, care must be taken in the Judgment to provide that the payment is for the support of another and not a property settlement.
Alimony and Bankruptcy protection
Unlike a loan or money judgment an award of alimony (periodic, in gross or any other “domestic support obligation”) provides protection against the payer filing for bankruptcy. Specifically, 11 U.S. Code section 523 (a)(5) prohibits a party from discharging a “domestic support obligation” in a a bankruptcy proceeding.
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