Alimony and Spousal Support in North Carolina
When a married couple separates, one spouse may be able to file a complaint with the court seeking spousal support from the other party. North Carolina courts will award spousal support only to a dependent spouse. Generally, a spouse is dependent if he or she earns insufficient income to maintain the standard of living enjoyed during the marriage because of the loss of the other spouse's income.
Determining spousal support is complex, involving numerous relevant factors assessed by the judge (see the alimony “relevant factors,” listed further below). In North Carolina, judges do not follow a set of alimony guidelines based on a numerical formula. Thus, alimony cannot be determined using an “alimony calculator.” To determine alimony, a judge will start by considering the reasonable financial needs of each party, including the income that each party individually earns (if any) and whether each party has a deficit or surplus of money each month, after paying for their own reasonable financial needs. What constitutes a reasonable need depends on the lifestyle established during the marriage and can vary widely depending on the individual circumstances. Due to these complexities, you should consult an experienced North Carolina family law attorney before signing any agreement that could affect your rights to spousal support.
Types of Spousal Support in North Carolina
There are two types of spousal support in North Carolina. The first, called "postseparation support," is temporary and is designed to provide for the dependent spouse's support until a final order of alimony is entered. Postseparation support is typically a monthly amount of money the supporting spouse pays to the dependent spouse. Postseparation support may also include medical coverage, mortgage payments, use of a vehicle, or other necessities a dependent spouse may need. Since postseparation support is temporary, an award of postseparation support automatically ceases upon the entry of an award of alimony.
The second type of spousal support, called "alimony," is support that is awarded by the court to the dependent spouse for a period of time that is most often (but not always) longer in duration than an award of postseparation support. Generally, the length of time that alimony is ordered to be paid depends on the length of the marriage, among other relevant factors considered by the judge. Alimony can be paid in a lump sum, periodically over a specified time period, or for the life of the dependent spouse. Even if alimony is awarded for the lifetime of the dependent spouse, the supporting spouse that is paying alimony may petition the court to change the award if the circumstances later change (for example, if the supporting spouse has a loss of income).
Postseparation Support Hearing
If claims for both Postseparation Support and Alimony have been filed by one of the parties, the court will hold two separate hearings to determine spousal support. The first, the postseparation support hearing, is sometimes scheduled at the same time as temporary child support and temporary child custody claims. The temporary hearing is typically short, as the court limits the amount of time permitted. Because of this, the evidence presented to the judge is generally limited to the basic financial information of each party. At this hearing, a judge sitting without a jury will hear the evidence and decide whether one spouse is the dependent spouse and the other spouse is the supporting spouse, and what amount of support is reasonable. In deciding, the judge considers the incomes and expenses of both parties. In Wake County, the parties are each required to submit a Financial Affidavit which details his or her average monthly income and expenses. The judge will also hear testimony from each party to support and explain the expenses and income that are included on the Financial Affidavits. The judge will compare the parties' incomes and expenses, and will decide the financial needs of each party, each party’s accustomed standard of living, and the ability of the supporting spouse to pay spousal support.
During a North Carolina postseparation support hearing, if the judge determines that the resources of the spouse seeking support are not adequate to meet his or her reasonable needs and the other spouse has the ability to pay, then the judge will find the spouse who needs financial assistance to be the dependent spouse and the spouse who has the ability to pay to be the supporting spouse. The judge will then make an award of postseparation support to the dependent spouse. In determining whether to award postseparation support and the amount of the postseparation support, the judge must also consider any acts of marital misconduct committed by the dependent spouse on or before the date of separation. If the judge considers marital misconduct by the dependent spouse, the judge must also consider acts of marital misconduct committed by the supporting spouse on or before the date of separation.
Once the court awards postseparation support, that award continues until a date specified in the postseparation support order or until the entry of a final order of alimony. The postseparation support award can be in the form of periodic payments, a lump sum payment, a transfer of personal property, possession of property, a security interest in real property, or a combination of these. Most often, postseparation support is ordered to be paid as monthly monetary payments.
The court procedure in North Carolina for an alimony hearing is similar to the hearing for postseparation support. The difference is that an alimony hearing is usually much longer and both parties can request sufficient time to present to the judge the evidence each feels is needed for the judge to make a fair decision. It is not unusual for an alimony hearing to last more than one day and to involve several witnesses, in addition to the two spouses. During a North Carolina alimony hearing, once the judge decides that one spouse is the dependent spouse and that the other spouse is the supporting spouse, the judge may award alimony to the dependent spouse. In deciding the amount of alimony to award, the duration of the award, and the manner of payment of the award, the judge has wide discretion, but must consider all relevant factors, specifically including:
- The marital misconduct of either of the spouses;
- The relative earnings and earning capacities of the spouses;
- The ages and the physical, mental, and emotional conditions of the spouses;
- The amount and sources of earned and unearned income of both spouses, including but not limited to, earnings, dividends, and benefits such as medical, retirement, insurance, social security, or others;
- The duration of the marriage;
- The contribution by one spouse to the education, training, or increased earning power of the other spouse;
- The extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child;
- The standard of living of the spouses established during the marriage;
- The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs;
- The relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support;
- The property brought to the marriage by either spouse;
- The contribution of a spouse as homemaker;
- The relative needs of the spouses;
- The federal, State, and local tax ramifications of the alimony award;
- Any other factor relating to the economic circumstances of the parties that the court finds to be just and proper; and
- The fact that income received by either party was previously considered by the court in determining equitable distribution of the parties’ property.
Testifying about each of the relevant factors in an alimony case can require many hours of court time and might require expert witnesses. Because of the wide discretion vested in a North Carolina judge in weighing the factors and evidence considered important in each case, there is no way to precisely predict the amount of alimony a North Carolina court will award or the duration of such alimony award. Although the judge’s discretion is broad, the judge should be fair to both parties. If the judge finds that the supporting spouse is deliberately suppressing his or her income, the court may base an alimony award on capacity to earn rather than actual earnings. This is called imputation of income.
When all of the evidence has been heard and all the factors have been weighed, the judge will make an order for alimony. In doing so, the judge should attempt to be fair to both parties and to allow both parties to maintain the standard of living to which they grew accustomed during the marriage. Unfortunately, the economic reality is that in most alimony cases both spouses will be required to accept a lesser standard of living because the parties’ income levels are typically insufficient to maintain two separate households at the accustomed standard of living that was established in the one marital household.
Normally, the judge will not set alimony for trial until after all marital property has been equitably divided either by an agreement between the parties or by an order of equitable distribution entered by the court. In those instances where alimony is determined before property is divided, the judge may later review whether the dependent spouse is still dependent after the property is divided.
The right of the dependent spouse to receive alimony, and the obligation of the supporting spouse to pay alimony, terminates upon the death of either spouse, the dependent spouse's remarriage, or if the dependent spouse continuously and habitually cohabits with a person of the same or opposite sex on a regular basis in a marriage-like relationship. Periodic alimony payments may also end by the terms of a court order specifying that the payments are to end on a certain date. Either party may make a motion to increase or decrease an alimony amount at any time, based upon a substantial change of circumstances, so long as the alimony award has not already been fully paid over the time period originally ordered or otherwise terminated.
The North Carolina case law and statutes that control spousal support – including both postseparation support and alimony – are complex. Thus, separating spouses who have disparate incomes should strongly consider consulting with an experienced North Carolina family law attorney to discuss postseparation support, alimony, and all of the factors that the judge would consider when determining spousal support.
If your goal is to reach a settlement with your spouse regarding postseparation support or alimony, an experienced family law attorney will be able to provide invaluable guidance as to what settlement amount would be reasonable, after considering all of the individual factors that would apply to your unique circumstances.
Alimony and Marital Misconduct
One recurring theme in both postseparation support and alimony is the idea of "marital misconduct." As defined by statute, "marital misconduct" means any of the following acts committed by either spouse during the marriage and before or on the date of separation:
- Illicit sexual behavior;
- Involuntary separation of the spouses in consequence of a criminal act committed prior to the proceeding in which alimony is sought;
- Abandonment of the other spouse;
- Malicious turning out-of-doors of the other spouse;
- Cruel or barbarous treatment endangering the life of the other spouse;
- Indignities rendering the condition of the other spouse intolerable and life burdensome;
- Reckless spending of the income of either party, or the destruction, waste, diversion, or concealment of assets;
- Excessive use of alcohol or drugs so as to render the condition of the other spouse intolerable and life burdensome;
- Willful failure to provide necessary subsistence according to one's means and condition so as to render the condition of the other spouse intolerable and life burdensome.
These factors can be considered to either support the award of alimony if the marital misconduct was committed by the supporting spouse, or to deny or reduce the amount of alimony that might otherwise have been awarded, if the marital misconduct was committed by the dependent spouse.
Either spouse has a right to request a jury trial to decide whether the other spouse has committed "marital misconduct." If a jury trial is not requested, the presiding judge can determine whether marital misconduct has occurred. Once the judge or jury has decided the questions of "marital misconduct," the judge will award or deny alimony based upon the relevant factors discussed above. The judge may reduce the amount awarded if the dependent spouse has engaged in marital misconduct. The court will deny alimony completely if the dependent spouse has engaged in an act of illicit sexual behavior on or before the date of separation and the supporting spouse has not.
If the spouses resume the marital relationship or have sexual relations after an incident of marital misconduct occurs, a court may rule that the marital misconduct has been forgiven. If the court finds that the marital misconduct has been forgiven, or "condoned," the act of marital misconduct may not be used to support or defend against a claim for alimony. The forgiveness is conditioned upon the offending spouse treating the other spouse respectfully following the resumption of the marriage relationship and not later repeating the same or similar behavior.
Alimony and "Illicit Sexual Behavior"
The court treats "illicit sexual behavior" differently than the other misconduct factors listed above. "Illicit sexual behavior" means acts of sexual or deviate sexual intercourse, deviate sexual acts, cunnilingus, fellatio, anilingus, or anal intercourse voluntarily engaged in by a spouse with someone other than the other spouse.
If the dependent spouse has engaged in illicit sexual behavior on or before the date of separation, the court will deny alimony completely (but could still award postseparation support), unless the supporting spouse also has engaged in illicit sexual behavior on or before the date of separation. If both parties have engaged in illicit sexual behavior on or before the date of separation, the court has the discretion to award or deny alimony, after considering all the circumstances. If only the supporting spouse has engaged in illicit sexual behavior on or before the date of separation, the court must order payment of alimony.
How Alimony Affects Tax Returns
When the parties file separate tax returns, alimony payments are considered taxable income to the dependent spouse and an income deduction for the supporting spouse. All spousal support matters should be analyzed for tax consequences by your CPA or tax advisor before you sign a separation agreement or go to court. To be tax deductible, support payments must be paid under the terms of a written separation agreement or court order. It is important to remember to consider the tax implications of alimony, before taking the matter to court or agreeing to a settlement. The tax implications of alimony can easily be overlooked, only to be realized too late when filing your tax returns.Read more about divorce and taxes by clicking here.