Top Strategies For Negotiating Alimony Payments

In this article, you can discover…

• How alimony is determined in New York.
• The factors that should be considered when negotiating.
• The role that marriage length can play in alimony.

How Can I Determine A Fair Amount For Alimony?

The first step in determining alimony (a/k/a “spousal maintenance”) is to factor in both partners’ incomes into a maintenance calculator. Many clients find the Joy Rosenthal calculator to be a helpful and accurate tool. While not definitive, it can help give you a good idea of what alimony might be in New York.

This calculator computes presumptive numbers for spousal maintenance and child support. You can lower or raise numbers as you like, and this tool can help you come up with some numbers that are helpful in negotiation.

Many clients propose a number that’s anywhere from half to the full amount of this calculated amount based on other facts such as asset distribution, custody, or child support. But once you have this number, it’s a helpful figure to use going into negotiations.

Key Factors to Consider When Negotiating Spousal Maintenance

When negotiating spousal maintenance, several statutory factors come into play:

• Age and Health: The age and health of both parties.
• Earning Capacities: Present or future earning capacities of the parties.
• Need for Training or Education: The need of the party requesting maintenance to incur training or education for a future job.
• Termination of Prior Child Support: The impact of terminating prior child support awards.
• Disposition of Assets: Getting rid of assets or property – or distributing same between the parties.
• Premarital Household: The existence of a premarital household.
• Impact of Domestic Violence: Acts, such as physically debilitating domestic violence, that have affected the victimized party’s ability to earn.
• Tax Consequences: Tax consequences of either maintenance, child support and/or asset distribution.
• Standard of Living: The standard of living for both parties. Higher standards of living generally command higher spousal maintenance payments.
• Lost Earning Capacity: Reduced or lost earning capacity as a result of delaying education or work, such as a spouse who sacrificed college to stay home and raise children.
• Spousal Contributions: Contributions of a spouse or parent to the earning potential of the moneyed party, such as staying home with the children to allow the other to grow their business.
• Anticipated Asset Distribution: Anticipated asset distribution as a result of the divorce.
• Other Relevant Factors: Any other potentially relevant factors, such as egregious misconduct from the moneyed spouse.

Tip: Review All These Factors With Your Attorney

How long you and your spouse have been living separately is also important. It’s not uncommon for a spouse to have been living on their own and earning independently, only to request spousal maintenance. This can be contested by an attorney, who can examine the other party’s finances to determine an appropriate alimony amount.

All of these factors should be reviewed at length with your attorney to help them get a clear picture of your marriage, the finances of both parties while you were together, and what both parties’ finances might look like post-divorce.

How Can Mediation Help In Alimony Negotiations?

A mediator will sit down with you and your spouse after reviewing both of your financial statements. The mediator will come up with a presumptive number for alimony and discuss issues such as your expected budget for living expenses after divorce, expected asset distribution, and what both parties feel they will need moving forward.

Ideally, the mediator helps you and the other party reach an acceptable middle ground, somewhere between zero and the presumptive number. This is where your calculated alimony figure can potentially come in handy, along with guidance and representation from your attorney.

Alimony Laws Specific To New York

The above-mentioned statutory factors will be important in any New York alimony debate. It’s also important to understand that the length of the marriage will play a role in determining alimony. In New York, alimony is paid out for a percentage of the length of the marriage.  The presumptive durations are set forth below:

• A marriage lasting less than 15 years is described as a short-term marriage. In this case, alimony will be paid for 15% to 30% of the length of the marriage.
• A marriage lasting between 15 and 20 years will see alimony paid for 30% to 40% of the duration of the marriage.
• A marriage that lasts more than 20 years will see alimony paid out for 35% to 50% of the length of the marriage.

It’s also important to be aware of what to do if you are requesting maintenance as part of alimony. If you are presently out of work or have reduced your earnings as of late, be sure to keep up the search for a job that will match or be close to your previous earnings. Similarly, if your spouse is seeking maintenance, consider allowing a vocational expert to investigate your former spouse’s job search.

Be sure to go over all of the above factors with your attorney to ensure a more fair and understandable alimony settlement.

How Do I Document Financial Needs And Expenses So It’s Done Accurately?

Expenses can be documented very easily with programs like Quicken or QuickBooks. This can help supplement other documents, such as credit card statements, bank statements, and tax returns.

So much of our financial lives are digital now, in the form of credit or debit, but a spreadsheet can still be a helpful way to demonstrate that you are taking the documentation of your finances seriously and accounting for everything with care.

A spreadsheet is also more helpful for a Judge than dozens (or hundreds) of pages of separate documentation. The courts will also require a “statement of net worth” to be filled out that will document your assets and finances. Having accurate records will make these forms far simpler to fill out when that time comes.

What Are The Benefits Of Negotiating Lump Sum Alimony Payments?

Upfront maintenance in the form of a lump sum may be helpful if you have considerable assets and your spouse is looking to move out and purchase a home or a condo immediately. This will require a considerable down payment, and giving that amount upfront may be preferable to paying out presumptive amounts over several years.

This can allow you to pay, for example, $20,000 at once instead of $36,000 over three years. This can help save you money in the long run, as well as get the other party the accommodations they need far sooner.

Are There Any Downsides In Negotiating A Lump Sum Alimony Payment?

While spousal maintenance is not taxable at the federal level, it is still taxable at the State level. If you do get a lump sum in alimony from a spouse, sit down with an accountant to determine if this arrangement will make sense from a fiscal standpoint.

It may ultimately make more sense for you to receive payments over time, especially as you will still owe New York taxes on any alimony amount you receive.

Some spouses find it simpler to take in smaller amounts of alimony to avoid higher taxes. This opportunity to avoid higher taxation can be a helpful negotiating point in determining asset distribution and payments. If you anticipate receiving alimony payments, talking to a financial planner can also help you decide whether to accept a lump sum or take those payments over time.

What Are The Risks Of Not Having A Clear And Detailed Alimony Agreement?

Failing to establish a clear and detailed alimony (a/k/a maintenance) agreement can lead to significant issues and disagreements in the future. When an alimony plan is vague or lacks specificity, it increases the likelihood of disputes and makes it less likely that a Judge will approve the arrangement.

One of the simplest and most effective ways to avoid future conflicts is to clearly specify the amount of alimony to be paid. For example, agreeing on a fixed amount, such as $5,000 per month, leaves little room for interpretation and reduces the chances of disputes later on.

However, it’s also essential to consider potential future changes in the financial circumstances of either party. What happens if the recipient’s earnings decrease, or conversely, if they suddenly begin earning a substantial income, such as $500,000 a year? In such cases, does the original alimony amount still make sense?

Discuss these scenarios with your attorney to ensure that your alimony agreement addresses how changes in circumstances will be handled.

Still Have Questions, Ready To Get Started?

For more information on Top Strategies For Negotiating Alimony Payments, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (347) 797-1188 | (914) 362-3080 today.