NC Alimony Laws: What Type of Alimony Do You Need & How Long Does it Last?

By Gregory Forman

The Different Types of Alimony in NC

Does North Carolina have alimony? Yes, when considering alimony (sometimes referred to as maintenance), it is important to understand the four basic types of alimony.

1. Permanent periodic alimony: a fixed amount paid at fixed intervals (typically monthly). It does not end until the payor dies or the supported spouse remarries or dies, but it can be modified upon a showing of a change in circumstances.
2. Rehabilitative alimony: a fixed amount paid at regular intervals for a limited time.
3. Lump-sum alimony (sometimes called “alimony in gross”): a fixed amount, though it can be paid over time.
4.Reimbursement alimony: designed to reimburse a spouse for contributions to the other spouse’s increased earning capacity. Typically reimbursement alimony is used when one spouse supported the other in obtaining an education or starting a business, but the parties separated before the supporting spouse obtained any “benefits” from the increased earning capacity.

How Long Does Alimony Last in North Carolina?

Alimony is supposed to allow the supported spouse to maintain the marital lifestyle, though there are tensions between theory and practice. The alimony amount should not be so high that the supported spouse has no incentive to take some responsibility for self-support. Further, the expense of a second household after spouses separate means that there are increased expenses without increased income and the court must decide how much each spouse’s lifestyle needs to be cut to make up the shortfall. In some states, the court has great discretion in reconciling these tensions; in other states, courts follow a basic formula.

Lifetime Alimony
Permanent periodic alimony is typically awarded in longer marriages in which the supported spouse has foregone career building to maintain the household and now needs permanent support to maintain the marital lifestyle. Permanent alimony is paid until either spouse dies or the supported spouse remarries. In some states, such alimony can be terminated when the supported spouse cohabits (lives with a romantic companion in circumstances akin to marriage). It can be changed or terminated upon a showing of substantially changed circumstances.

Typically, permanent periodic alimony is reduced, and sometimes eliminated, when the supporting spouse retires. It is also typically reduced if the supported spouse has a substantial increase in income, or obtains a financial windfall, or the supporting spouse has, through no fault of his or her own, a substantial reduction in income. When permanent periodic alimony is initially set at a level that does not cover all of the supported spouse’s needs, it is sometimes increased when the supported spouse becomes unable to take care of any of his or her financial needs (frequently due to disability) or when the supportingspouse’s income substantially increases.

Short-term Alimony
Rehabilitative alimony is typically awarded in shorter marriages or when the supported spouse is able to become selfsupporting in a limited time frame. It ends on the same basis as permanent periodic alimony. Rehabilitative alimony allows the supported spouse time to transition back to the labor market, often by obtaining additional education or job skills. Sometimes rehabilitative alimony affords a spouse with caretaking responsibilities for young children an opportunity to work part-time until the children are older.

Typically, rehabilitative alimony can only be awarded when there is evidence presented (and when the court finds) that the supported spouse can become self-supporting within the rehabilitative time period. Some states allow an extension of rehabilitative alimony when the supported spouse, despite diligent efforts, is unable to achieve self-support within the set time frame.

Lump-sum Alimony
Lump-sum alimony is a fixed amount. It can be paid all at once or in set payments; however, the total amount is fixed and unalterable. Unlike payments made as part of a property division, lump-sum alimony is not dischargeable in bankruptcy. It terminates when the supported spouse dies, but not when the supported spouse remarries or the payor spouse dies.

Lump-sum alimony is generally awarded when the supported spouse needs a fixed amount of support or when the parties desire the certainty of a fixed support obligation. Sometimes it is awarded when the supported spouse is entitled to alimony, the supporting spouse has assets to pay lump-sum alimony, and the supporting spouse indicates an unwillingness or inability to comply with court orders. Rather than award periodic alimony, which the supporting spouse is unlikely to pay, the court can use the supporting spouse’s assets to award lump-sum alimony.

Paying Back
Reimbursement alimony is designed to reimburse the supported spouse for an investment in the supporting spouse’s education or business. This investment need not be a financial investment; it can be an investment of time and energy, such as in taking care of the household (including children) or paying household expenses while the other spouse expends effort and funds in developing a business or obtaining an education. Often reimbursement alimony becomes necessary when spouses separate before the supporting spouse has established a history of the anticipated greater earnings. Not all states have reimbursement alimony.

Equity and Expectation
Alimony is generally designed to enable the supported spouse to maintain the marital lifestyle; reimbursement alimony enables the supported spouse to enjoy the lifestyle he or she would have had in the future had the parties remained married. It is based on principles of equity and expectation.
Typically, reimbursement alimony involves a supported spouse who balances work, homemaking, and children, while the other spouse obtains a professional degree, only to have the marriage end once the degree is obtained. South Carolina believes that reimbursement is required, based on the supported spouse’s reasonable expectation that the years of sacrifice would lead to mutual benefits.

In some states, a family court judge has wide discretion in setting the amount of alimony; other states use fixed formulas. The primary factors the court considers in determining alimony are the lifestyle enjoyed during the marriage; the length of the marriage; whether there are dependant children who might restrict the supported spouse’s ability to work full-time; the age, health, and education of the parties at the time alimony is being set; the parties’ respective earnings and earning capacities; the parties respective reasonable living expenses; and the tax consequences of any alimony award. Some states also make fault a consideration in setting alimony.

Making the Case
In preparing an alimony case, many important factors are typically not subject to dispute: the parties’ respective ages, the length of the marriage, past earnings. Other factors are frequently the subject of dispute: each spouse’s health and learning capacities and the expenditures needed to maintain both households.
Supported spouses will try to show that their health, education, and background leaves them unable to provide for much of their own financial needs, that the expenses to maintain the marital lifestyle are substantial, and that their spousehas the ability to earn even greater income (or is sheltering income through business expenses).Supporting spouses will try to show that the supported spouse is willfully underemployed, exaggerating expenses or health problems, or that he or she needs substantial income to maintain the lifestyle.

Such disputes lend themselves to the hiring of experts and the use of discovery. Vocational experts can help the supported spouse prove limited earning capacity, and help the supporting spouse prove that the supported spouse could earn more. Medical experts can substantiate or undermine the supported spouse’s claim of health limitations on earning capacity. Financial (often accounting) experts can testify to the likely expenses for both parties, both to justify one spouse’s claimed expenses and to undermine the other spouse’s claimed expenses. Financial experts also can be used to show that the supporting spouse is sheltering income by paying personal expenses through a business or not declaring cash payments to the business.
Discovery should be tailored to the factual disputes. A spouse whose health is in dispute should obtain medical records and depose the treating physician. A spouse whose living expenses are in dispute must gather and examine business records, cancelled checks, bank statements, and accounting information (such as Quicken, Quickbooks or Microsoft Money Data).

For the supporting spouse, the goal is to show that the supported spouse understates earning capacity and overstates expenses to keep the alimony award as low as possible. The supported spouse’s goal is to show that his or her earning capacity cannot meet both of their reasonable expenses and that the supporting spouse has the ability to meet the alimony need. A supporting spouse may try to convince the court that rehabilitative alimony should be awarded by showing that the supported spouse can become more self-supporting; the supported spouse may attempt to show that permanent alimony will be needed.

Conclusion
Any spouse contemplating a divorce or separation in which alimony will be in dispute should discuss alimony options with an attorney as soon as possible. A court’s decision to award or deny alimony, along with a decision about the amount and type of alimony to be awarded, can have lifelong ramifications for both the supporting and the supported spouse.

Further Reading:
Alimony in North Carolina
North Carolina Separation Laws

About the Author: Gregory S. Forman is a 1991 cum laude graduate of Temple University School of Law. He is a sole practitioner who opened his practice in Charleston, South Carolina, in November 1993. His practice is primarily devoted to family law. He has lectured and published widely on a variety of family-law topics.

This article was originally published in the September 2009, Vol 32, No. 1 issue of Family Advocate entitled “Client Manual: You’ve Got Choices”. The manual is available online at http://www.abanet.org. The article is reprinted here with permission of the American Bar Association. If you have questions or are in need of assistance with alimony in North Carolina, please use the form to your right to contact us.

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