Alimony Part 2: How Alimony is Calculated

Alimony is often not a straightforward issue, so if it’s applicable in your divorce case – whether as the payor or the payee – it’s helpful to understand how it’s calculated. First, it is important to know the circumstances where alimony is awarded and the different types that exist under Florida statutes. To learn more about the different types of alimony, head over to our blog post from last month. In this post, we’ll break down the factors that contribute to determining the amount of alimony. 

Alimony Factors

When it comes to family law, equity is the goal. The court’s focus is to strive for “fairness,” and while they are bound by the applicable statutes and case law, they have broad discretion to do so. There are no statutory guidelines to calculate alimony like there are for child support, but there are numerous factors the court will look at to determine the duration and amount of alimony. Ultimately, in Florida, it comes down to establishing one party’s need for alimony and the other party’s ability to pay. 

“There are no statutory guidelines to calculate alimony like there are for child support, but there are numerous factors the court will look at to determine the duration and amount of alimony.”

Ability to Pay

Typically, the priority is to determine the ability to pay. If there is no ability, there is no need to look at the other spouse’s need. To determine the ability to pay, the court will look at net income before voluntary deductions. This will include any bonus income that is regularly received. Other considerations will be any additional financial resources of the party, including the income from marital and non-marital assets, net worth, social security or disability benefits, retirement, pension, and earning capacity. 

Determining Need

If the party is determined to have the ability to pay, then the other party’s need for alimony should be addressed. Usually, a major factor here will be the standard of living that was established during the marriage and the amount of alimony the party would require to keep that intact. Other factors that will be considered for determining need include: 

1. The duration of the marriage (determined by the date of marriage to the date of filing):
   1. Less than 7 years = short-term
   2. Between 7 and 17 years = moderate-term
   3. 17 years or greater = long-term
2. The financial resources of the receiving party, which are reviewed in the same way as outlined above for the paying spouse
3. The earning capacity of the party, with consideration for any time required to obtain training or education
4. The age, physical and emotional condition of the party
5. The contribution to the marriage, such as having raised the children and run the house or supported the other party’s career or business

Once all of those factors have been analyzed and considered, the parties will typically negotiate an amount and duration. If they cannot agree, the judge will decide. However, the purpose of alimony is not to equalize incomes between the parties. The court’s goal is equity, meaning what’s fair, but that does not necessarily mean equal. 

Life Insurance

An additional option that judges or parties sometimes consider with regard to alimony is to secure the obligation with a life insurance policy. If the paying spouse is a reasonably viable candidate for life insurance, and the receiving party requests it, the court can order a policy to be obtained if there are special circumstances warranting it. 

Questions

Alimony can be one of the most essential considerations in a divorce case, yet it can be a confusing and sensitive topic. There can be questions surrounding who will receive alimony, what type it will be, how much financial support they’ll get, and for how long. If you have questions about your own case and how alimony may or may not apply to you, give us a call at 407.403.5990. We will also be publishing another blog post uncovering more of the complexities of alimony next month.