Spousal Maintenance in a High Net Worth Divorce
Divorces are not something that couples anticipate, but sometimes it is necessary in order to end a dysfunctional relationship in a cordial and legal manner. There are multiple issues which are discussed and decided during the course of a divorce such as asset division and child custody. According to experienced divorce lawyers, one of the major issues addressed during a divorce is spousal maintenance, which is also referred to as alimony. Alimony is a major concern in high net worth divorces as there is a considerable amount of money involved.
Why does the law require you to pay spousal maintenance?
Under the law, the partner which earns considerably less money than the other partner may be entitled to alimony or spousal support. The purpose of this maintenance is to decrease the severe economic impact on the spouse who does not earn enough or in most cases does not have a source of income at all. In layman terms, spousal maintenance is a sort of financial assistance for the financially weaker spouse in order to help them live their lives in a way they are used to.
How is spousal maintenance calculated?
The amount of money to be paid in lieu of spousal maintenance is calculated through a specific formula. According to existing law, the courts are bound to follow a set formula to calculate the amount of alimony in cases where the combined annual income of the partners is less than $250,000. Recent legislation, which will go into effect from June 2018, has raised the cap to $500,000.
The formula used in low value divorces works on a formula where 20% of the receiving spouse’s income is subtracted from 30% of the richer spouse’s gross income. The difference between the two, must not amount to more than 40% of the paying spouse’s income. Another factor considered during the process of calculation of spousal maintenance is the duration of the marriage. The longer the couple has been married, the longer the alimony payments will continue to be made.
How are high net worth divorces different?
Due to the limit set by the court, couples with higher gross incomes are excluded from the mathematical calculations. The exclusion from the rule means that the spousal maintenance amount and its duration is to be left at the sole discretion of a judge. This creates uncertainty as the judge can use his or her discretionary authority to award any amount. Therefore, to protect their own personal interests, most high-net couples attempt to reach an agreement by themselves, often guided by an experienced spousal support lawyer.
In order to receive more information about spousal maintenance in high-value divorces or to schedule a free consultation with an experienced divorce lawyer, contact the Law Office of Fedor Kozlov at 847 241 1299.