Alimony

Alimony, also known as spousal support, is a court-ordered payment made by one spouse to the other during and/or after a divorce. Initially, alimony emerged as a means to address the financial challenges faced by the financially dependent spouse, typically the one who dedicated their efforts to raising the couple’s family or managing household responsibilities while the other worked full-time. It aimed to ensure a smooth transition from a dual-income to a single-income household during divorce.

In today’s world, where dual-income households are more common, the relevance of alimony persists as it serves to prevent individuals from being left in dire financial circumstances or relying on state assistance post-divorce. This is particularly significant in high-net-worth divorces where income disparities between spouses can be substantial.

In such cases, one spouse may possess significantly higher earning capacity or accumulated wealth, while the other may have made sacrifices in their career or focused on family responsibilities. Alimony recognizes the contributions made by the financially dependent spouse during the marriage and aims to provide a fair and reasonable level of financial support after the divorce.

Understanding the concept of alimony becomes crucial for high-net-worth individuals going through a divorce. It is important to be aware of the factors that influence the determination of alimony, such as the duration of the marriage, the standard of living established during the marriage, the financial resources of each spouse, and the ability to earn income or acquire assets.

Seeking guidance from experienced family law attorneys specializing in high-net-worth divorces is essential. These professionals can offer valuable advice on the specific laws and regulations governing alimony in their jurisdiction and help develop a robust case that addresses the unique financial circumstances of high-net-worth individuals.

What different types of alimony are available in Florida?

In Florida, several types of alimony are available to address the financial needs and circumstances of divorcing spouses. The four main types of alimony recognized in Florida are temporary, bridge-the-gap, rehabilitative and durational.

It is important to note that Florida, as of July 1, 2023, no longer has permanent alimony. Further, the Florida legislature has made significant changes to Florida’s Alimony Statute 61.08 that is very important to understand. Some of the most important parts of the Alimony law overhaul include:

• The elimination of permanent alimony.
• Short term marriages are now considered marriages lasting less than ten (10) years vs. the prior definition of short-term marriages which were marriages lasting less than seven (7) years.
• Moderate term marriages are marriages which last between ten (10) to twenty (20) years vs. the prior definition of moderate marriages which were marriages lasting greater than seven (7) years, but less than seventeen (17) years.
• Long term marriages are marriages lasting greater than twenty (20) years vs. the prior definition of long term marriages which meant marriages lasting greater than seventeen (17) years.
• The length of any durational alimony awarded cannot exceed the following:
  • Fifty (50%) percent of the length of a short-term marriage.
  • Sixty (60%) percent of the length of a moderate term marriage.
  • Seventy-five (75%) of the length of a long-term marriage. *
  • The amount of a durational alimony award is determined by reasonable needs and cannot exceed thirty-five (35%) of the difference between the net incomes of the parties and the Court’s determination of reasonable need, whichever is less.
  • Though the Court must still use the “standard of living during the marriage” for purposes of determining the amount the obligee spouse may need, now the Court must consider the anticipated needs and necessities of life for each party after the entry of the final judgment as well.
  • The Court must also statutorily consider the income generated from both nonmarital and marital assets (and not liabilities) in weighing the alimony factors.
  • Courts can consider the impact of adultery in determining alimony and regardless of whether the adultery had or has a financial impact or not.
  • The Court’s ability to require an obligor to obtain life insurance to secure the alimony award can no longer be required absent the showing of special circumstances and written findings of the same, as well as the apportionment of the life insurance cost between the obligor and obligee. Finally, the Court must also issue written findings that the party whom is paying for the life insurance, whether it is one or both parties, that the part(ies) have the ability to do so.

*Though there are exceptional circumstances in which a court can take into consideration in exceeding the statutory limitations on the length of durational alimony which can be awarded.

The specific type of alimony awarded depends on the case’s unique circumstances and statutory factors. Couples can negotiate the terms themselves or have the court decide if they cannot reach an agreement.

Temporary Alimony

Temporary alimony provides financial support to a spouse in need during the divorce proceedings. To receive temporary alimony, the requesting spouse must demonstrate both financial need and the other spouse’s ability to pay. This type of alimony helps the lower-earning spouse maintain financial stability throughout the divorce process and typically ends once the divorce is finalized.

Bridge-the-Gap Alimony

Florida is one of the few states that offer bridge-the-gap alimony. This type of alimony assists the recipient spouse in meeting short-term financial needs while transitioning from a married to a single status. Bridge the gap alimony requires that the party requesting this type of alimony be able to identify a legitimate short-term need. For instance, it can help cover living expenses or bills while waiting for the marital home to sell or while seeking full-time employment after the divorce. Bridge-the-gap alimony cannot exceed a duration of two years and terminates upon the death or either party or the supported spouse remarries. The length or amount of this type of alimony can not be modified.

Rehabilitative Alimony

Rehabilitative alimony is a common type of alimony in Florida. It is awarded when one spouse has the potential to become self-supporting but requires time and financial assistance to acquire the necessary education, training, or work experience to enter or re-enter the workforce. Before the court grants rehabilitative alimony, the spouses must create a clear and defined rehabilitative plan for the court’s review. Under the new law, effective July 1, 2023, this type of alimony cannot exceed five (5) years. Rehabilitative alimony can be modified or terminated in accordance with Florida’s modification statute 61.14 upon a substantial chance in circumstances, noncompliance with the rehabilitative plan or if the spouse receiving the alimony completed the plan prior to the end date of the term awarded.

Durational Alimony

Durational alimony is similar to rehabilitative alimony in that the court sets a specific time limit for the alimony payments. However, a rehabilitative plan is not required. Durational alimony is appropriate when the supported spouse needs financial assistance for a set period after the divorce.

Length of durational alimony which can be awarded:

Under the new law, the length of durational alimony which can be awarded by a Court cannot exceed the following guidelines, except in exceptional circumstances.

• Fifty (50%) percent of the length of a short-term marriage (10 or less years).
• Sixty (60%) percent of the length of a moderate term marriage (10 to 20 years).
• Seventy-five (75%) of the length of a long-term marriage. (20 or more years)
• No award for durational alimony is permitted for marriages lasting less than three (3) years.

The length of a durational alimony award can not be modified, except in exceptional circumstances and cannot exceed the length of the marriage, except as set forth in the statute.

Under exceptional circumstances, the Court may extend the length of a durational alimony award beyond the statutory limitations set forth above provided the party is able to show by clear and convincing evidence that an extension of the length of the alimony award is needed based on the following factors:

• Those initial set forth in Fl. Stat. 61.08(3):
  • The duration of the marriage
  • The standard of living established during the marriage and the anticipated needs and necessities of life for each party after the entry of the final judgment.
  • The age, physical, mental and emotional condition of each party, including whether either party is physically or mentally disabled and the resulting impact on either the obligee’s ability to provided for his or her own needs or the obligor’s ability to pay alimony and whether such conditions are expected to be temporary or permanent.
  • The resources and income of each party, including the income generated from both nonmarital and marital assets.
  • The earning capacities, educational levels, vocational skills and employability of the parties, including the ability of either party to obtain the necessary skills or education to become self-supporting or to contribute to his or her self-support prior to the termination of the support, maintenance or alimony award.
  • The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child care, education, and career building of the other party.
  • The responsibilities each party will have with regard to any minor children whom the parties have in common, with special consideration given to the need to care for a child with a mental or physical disability.
  • Any other factor necessary for to do equity and justice between the parties, which may include a finding of a supportive relationship as provided for in Fl. Stat 61.14(1)(b) or a reasonable retirement as provided for in Fl. Stat. 61.14(1)(c)1.
  • And the following factors:
    • The extent to which the obligee’s age and employability limit the obligee’s ability for self-support, either in whole or in part.
    • The extent to which the obligee’s available financial resources limit the obligee’s ability for self-support, either in whole or in part.
    • The extent to which the obligee is mentally or physically disabled or has been diagnosed with a mental or physical condition that has rendered, or will render, him or her incapable of self-support, either in whole or in part.
    • The extent to which the obligee is the caregiver to a mentally or physically disabled child, whether or not the child has attained the age of majority, who is common to the parties. Any extension terminates upon the child no longer requiring caregiving by the obligee, or upon death of the child, unless one of the other factors in this paragraph apply.

Amount of durational alimony which can be awarded:

• The amount of the durational alimony is determined by reasonable needs and cannot exceed thirty-five (35%) of the difference between the net incomes of the parties, whichever is less.
• Net income is calculated in accordance with Fl. Stat. 61.30(2) and (3) and excludes spousal support paid between the parties during the dissolution proceedings.

Durational Alimony terminates upon the death of either party, the remarriage of the obligee and may be modified or terminated based on substantial change in circumstances in accordance with Fl. Stat. 61.14, which includes entering a supportive relationship.

High-net-worth individuals should familiarize themselves with the different types of alimony so they can make informed decisions and effectively navigate the divorce process. By understanding the various forms of alimony available, they can better anticipate the potential financial obligations and arrangements that may arise.

Factors Influencing Qualification for Alimony and the Type of Alimony you Qualify for.

In high-net-worth divorces, several factors play a crucial role in determining eligibility for alimony. First, the Court must determine that a spouse has the need for alimony and that the other party has the financial ability to pay the alimony. Once the Court establishes need and ability, the Court turns to the following factors in order to determine what kind of alimony should be awarded. These factors are carefully evaluated by the court and may include:

• The duration of the marriage
• The standard of living established during the marriage and the anticipated needs and necessities of life for each party after the entry of the final judgment.
• The age, physical, mental and emotional condition of each party, including whether either party is physically or mentally disabled and the resulting impact on either the obligee’s ability to provided for his or her own needs or the obligor’s ability to pay alimony and whether such conditions are expected to be temporary or permanent.
• The resources and income of each party, including the income generated from both nonmarital and marital assets.
• The earning capacities, educational levels, vocational skills and employability of the parties, including the ability of either party to obtain the necessary skills or education to become self-supporting or to contribute to his or her self-support prior to the termination of the support, maintenance or alimony award.
• The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child care, education, and career building of the other party.
• The responsibilities each party will have with regard to any minor children whom the parties have in common, with special consideration given to the need to care for a child with a mental or physical disability.
• Any other factor necessary for to do equity and justice between the parties, which may include a finding of a supportive relationship as provided for in Fl. Stat 61.14(1)(b) or a reasonable retirement as provided for in Fl. Stat. 61.14(1)(c)1.

Source: Fl. Statute 61.08

These factors are examined on a case-by-case basis, and their significance may vary depending on the unique circumstances of each divorce. High-net-worth individuals should be aware of these factors and prepare accordingly. Similarly, consulting with experienced family law attorneys specializing in high-net-worth divorces is crucial. They can provide tailored guidance and legal counsel based on your case’s specific circumstances.

Expert Guidance by The Campbell Law Group

At The Campbell Law Group, we understand the complexities surrounding alimony in high-net-worth divorce cases. With our expertise in both business and family law, we provide essential guidance and representation during this challenging time. Our dedicated team serves clients throughout Florida, including Broward, Palm Beach, and Miami-Dade counties, with professionalism, integrity, and a commitment to achieving the best possible outcome.

If you are navigating a divorce involving alimony, trust The Campbell Law Group to advocate for your rights and provide the comprehensive legal support you need.

Frequently Asked Questions

How is alimony different from equitable distribution?

Alimony refers to the financial support payments made by one spouse to the other during or after the divorce to address economic disparities. It is intended to provide ongoing financial assistance to the recipient’s spouse.

Equitable distribution, on the other hand, involves the division of marital assets and debts between the spouses. It focuses on the fair distribution of property, financial resources, and liabilities acquired during the marriage.

Can the court order temporary alimony during the divorce proceedings for high-net-worth individuals?

The court can order temporary alimony, also known as temporary spousal support, during the divorce proceedings for high-net-worth individuals. Temporary alimony provides financial support to the financially dependent spouse while the divorce is pending. It helps maintain their standard of living and covers immediate expenses until a final alimony determination is made.

How are business assets and income taken into account when calculating alimony in high-net-worth cases?

Business assets and income are considered when calculating alimony in high-net-worth cases. The court assesses the value of the business and its potential income, as well as the contributions of both spouses to the business during the marriage. The court may consider factors such as the ownership interest, profits, and the impact of the business on the overall financial situation of both spouses. Business assets and income can play a significant role in determining the appropriate amount of alimony to be awarded.

Is there a maximum limit on the amount of alimony that can be awarded to a high-net-worth individual?

Under the new law, the Court must determine the reasonable needs of the recipient spouse and the parties standard of lifestyle during the marriage. However, there is a limitation on the amount of alimony which can be awarded to a spouse based on their reasonable needs. The recipient spouse’s reasonable needs cannot exceed thirty-five (35%) of the obligor spouse’s net income.

Can a prenuptial agreement affect the award of alimony in high-net-worth divorces?

A prenuptial agreement can affect the award of alimony in high-net-worth divorces. If a prenuptial agreement is in place and valid, it may include provisions regarding alimony, such as the amount, duration, or even the waiver of alimony altogether. The terms of the prenuptial agreement will generally govern the award of alimony, provided that the agreement meets the legal requirements and is deemed enforceable by the court.

How is alimony impacted if one spouse owns significant non-marital assets in a high-net-worth divorce?

The impact of significant non-marital assets on alimony in a high-net-worth divorce can vary depending on the specific circumstances and applicable laws. While non-marital assets are generally not subject to division in equitable distribution, they may still be considered when determining the need for alimony or the recipient spouse’s financial resources. The court may consider the overall financial situation of both spouses, including the non-marital assets, to arrive at a fair and equitable alimony award.

Can the paying spouse modify or terminate alimony if their financial circumstances change significantly after the divorce?

The paying spouse may seek a modification or termination of his or her rehabilitative or durational alimony if their financial circumstances change significantly after the divorce and to the extended permitted. For instance, under the new law, the length of durational alimony typically cannot be modified, unless the recipient spouse dies or remarries in which case the durational alimony terminates. However, a party can move for modification or termination of his or her rehabilitative or durational alimony amount under certain circumstances. However, this typically requires a substantial change in circumstances, such as a loss of income, unemployment, a significant decrease in earnings or a significant increase in the recipient spouse’s income or the recipient spouse enters a supportive relationship. The paying spouse would need to file a motion with the court and demonstrate that the change in circumstances justifies a modification or termination of the alimony obligation.

Can alimony be awarded to a high-net-worth individual with significant personal wealth and income?

Alimony can be awarded to a high-net-worth individual who has significant personal wealth and income if the court determines that there is a need for financial support by the other spouse and that the paying spouse has the ability to pay. The court will consider various factors, including the standard of living during the marriage, the financial resources of each spouse, statutory factors and any other relevant circumstances, to determine if alimony is warranted and in what amount.

How can high-net-worth individuals protect their assets from excessive alimony payments?

High-net-worth individuals can take certain measures to protect their assets from excessive alimony payments. One way is through the execution of a prenuptial or postnuptial agreement that clearly outlines the terms and conditions regarding alimony. These agreements can establish limitations on the amount and duration of alimony or even waive alimony altogether. Additionally, engaging in proper financial planning, consulting with experienced attorneys, and presenting a comprehensive financial picture to the court can help ensure that alimony awards are fair and reasonable based on the individual’s circumstances.