You are at the point in your life where you are wondering if long-term support is going to be ordered and if so, how much? More than likely, you have already been told that you are unable to use a guideline support calculator and there are going to be a number of obstacles you will need to wade through before any issues are resolved. Even once these issues have been resolved and there is still no way to plug in any numbers, what are you left to do? You begin the process of the negotiation of spousal support!
If you have any questions regarding long term support and temporary spousal support, we have an in-depth article you can read here. However, in basic terms, long-term support will usually last up to half of the marriage, that is considering the marriage is less than 10 years. If you were married for over ten years, you would continue past that five-year mark and possibly extend for several years beyond. With the fact of support, the judge is going to be afforded a good deal of discretion considering it is a case by case situation. With this in mind, you are going to have much room for negotiation.
Once it is determined that spousal support will be awarded, there are a number of other aspects that will need to be considered. In these cases, you will need to decide on it now or wait until a later time. If you decide to terminate it now, both of the parties will not be able to request it from the other. Additionally, should it be made non-modifiable or modifiable? Should a buyout be offered? Due to the fact that spousal support has such long-lasting ramifications, it is always best to consult with a lawyer or even a CPA who will be able to help you proceed in the best way possible and discuss all of your options and tax implications.
Let's examine a number of these options that revolve long term spousal support.
At the most basic level, this is simply what it means. It allows the possibility of spousal support coming into play down the road, Reserved jurisdiction allows both parties the opportunity to come together after a divorce a request spousal support. This is typically done after a lengthy marriage and the court system does not want to end jurisdiction, however, due to the circumstances, there is no call for spousal support.
It will also be considered if neither party asks for spousal support throughout the divorce, but the marriage was long-standing and the court is not willing to terminate the case in case something was to happen to either party and support would be needed down the road.
In many situations during a dissolution proceeding, there are a number of things that would be unclear if either partner is going to need support or how much support they are going to need. Additionally, due to the emotional component, it is not the best option to open this particular door and let the emotions come undone. If one of the parents has not been employed for a number of years but is in job training and has received temporary spousal support for some time, this reservation may be a good option. This will allow for both parties to look over spousal support and look over finances once the proceedings have finished.
However, the drawback that comes with reserved judgment for the "payee' spouse is that the longer one goes without spousal support the less likely the court is going to feel obliged to grant one. Typically, the likely argument you are going to hear is that if you were able to live on your own for a substantial amount of time, why would you need support now? The main drawback with reserved jurisdiction for the souse with a higher paying job is the fact that it will always hang over you, and with that, you never know how much you will need to pay and for how long. In order to have the court reserve status over the issue of spousal support, one will typically need to purchase a termination date. Basically, you would need to pay your spouse additional money in an effort to induce them to terminate spousal support.
However, if there is already a temporary support order in place and neither party decides to change any aspect of it, long-term support will be awarded and is modifiable.
This particular option will allow a party to either trade or buyout the other party's right to receive long-term support. In this case, the "payor" spouse has the ability to offer cash, assets, or interest up as an asset. This is a particularly good option if you have available cash, real estate, or various stock options that are owned jointly and can be placed in one party's name. You are basically placing a monetary amount or trading half of an item you own in value for the right to ask for spousal support. When both parties have agreed on a buyout, spousal support can be terminated and will be unable to be asked for again or in some situations, it will not be able to be modified or negotiated at a later time.
This can be a risky chance for both parties as to whether you choose a buyout or not. In some situations, the asset that you choose will lose value or is simply not worth as much as you would expect. If you decide to use an asset as a buyout that increases in value quicker that could have been used as spousal support. There will be instances when the payee spouse will remarry quickly or begin living with another individual after a buyout, which can be very frustrating to the payor spouse. It is important that the payee spouse is aware that there are certain advantages associated with receiving support up-front. There is no need to worry about a support order being enforced or worrying about the possibility of losing support if the spouse loses their job or was to die. If you plan to use cash, there is going to be an issue of how the payment will be structured and whether the agreed-upon amount is going to be sufficient for the party who is receiving support and if the other party will be able to afford it. Additionally, if it is to be paid overtime, is there going to be interest and how will the issue of inflation be addressed as once the amount is finalized, it will not be able to be modified.
When you use cash, it is also going to be dependent on the paying party's ability to access funding as well as the amount that is going to be paid as there will be a number of tax ramifications. If there is a lump sum of over $15,000, there will be an issue of dealing with complicated tax laws. In many instances, spousal support will be a tax deduction from the paying party and is usually treated as income for the receiving party. If you plan to opt for a cash buyout, you should consult the matter with a tax lawyer to ensure there are no serious tax consequences.
If you will be using an asset, it is going to depend on whether it makes sense to use that particular asset for a buyout. Many times, this will be a sock option, property, vehicle, art, survivor benefits, any number of things could be considered an asset. This was your marriage, anything could be considered valuable between the two of you.
Many times, it will take a full trial to understand the potential amount of long-term support, if you have a form of payment or asset, it is best to use it as a buyout. This will allow both parties the ability to buy from one another what they believe to be the long-term support obligations.
Modifiable Long-Term Spousal Support
This is an option that is exactly what you would expect it to be. This is long-term support that will start at a pre-defined amount and over time can be modified if there are changes in circumstances. This is usually done in two ways: 1) temporary support has been put in place but there is no termination date, so it will continue to be paid after the judgment has been finalized, or 2) the parties agreed to a set amount which would have had an end date but is able to be changed if either party needs it done so.
With regards to this option, if one of the parties is able to show a change in circumstances, they will be able to go back as ask for the amount of support to be changed. If the parties are able to agree, the judge will order for modifiable long-term support to be placed into effect. The key aspect of this situation is that either party is going to be required to show that there has been a change of circumstances for support to be modified. This can be the most basic of change such as a cut in pay or something which is much more complicated such as a permanent disability. This is a situation that will run the gamut. The plus side of this option is that it will allow for things to change and support will still be available in a worst-case scenario, such as a life-altering accident.
However, there is a downside to this option as it is unable to be modified and will not be guaranteed. Post-judgement will need a specific change of circumstances and the spousal support has the ability to be rather broad depending on the judicial officer. Typically, the most common issue in these cases is either the loss of a job or a higher paying job.
The court is also going to need to set a modifiable amount in the terms of support for a period of time after that is will support termination. This will not be as common as modifiable support for an indefinite amount of time, the courts will look at the length of the marriage and look at the best way to address long-term support. More often than not, there will be modifiable support for a length o time in which it will remain during the duration of the marriage if there are any number of circumstances that call for it.
Non-Modifiable Long Term Support
Again, we are looking at an option that is actually what you would expect it to be. There are instances in which the Judge or both parties can order non-modifiable support. However, it is important that the wording with non-modifiable support is done rather carefully as it is looked to construe long-term support as modifiable. In an effort to place a non-modifiable into place it will need to be made subject to the written agreement of both parties or through an oral agreement in the court. The form of support will be reviewed based upon the contract provisions, simply meaning that we will look at what each party is to receive and if it is a fair agreement between the two.
Non-modifiable support will only come into play when reviewing the wealth of one spouse in comparison to the other or if it has been set at a small amount that the party should always be able to pay it. One way to follow through on this aspect is to have an annuity set up to ensure that timely payments are always made. If there is a large discrepancy in wealth and there was a high standard of living during the marriage, this is usually the best solution. However, if this is drafted correctly, there is no way in which it can be undone and parties that have chosen for non-modifiable support will typically create an annuity to ensure that payments are always made regardless of what happens to the paying party.
One of the best benefits of having non-modifiable support is also the greatest detriments to having one as well. If the paying party is on the brink of making much more money, locking into a non-modifiable amount will be the biggest benefit to them. However, at the same time, if a person was to become fully disable and not able to make payments that were modest at the time, it will still remain non-modifiable at the same time. This form of support is one of the riskiest and should only be considered under the advisement of a lawyer.
For many people, this is one of the most popular options when dealing with long-term support. This will terminate either party's ability to ever ask for it, regardless of what would happen. In this situation, if both parties are employed and make about the same amount of money, they will often choose to terminate the right to support.
There are scenarios that will depend upon the length of a marriage that a judge will find the right to refuse and instead reserve it. They will make the decision to set a determination to zero pending any major changes in circumstances, which make it really difficult to get. If both individuals are legally represented, a judge will be much more likely to allow them the ability to terminate the right in the ability to ask for spousal support, due to the fact that they should have been advised of their rights and fully understand the matter of giving them up.
In cases where it is possible to terminate support, parties will like this option as they know they will not have to pay their spouse. Considering just how difficult divorces can be, this solution has the ability to make both parties feel more confident moving forward. There is never going to be a need that they are forced to support an ex-spouse regardless of the situation. This also means that is either party wants to ask for support at a later date, it is going to be very difficult and in many situations will not succeed unless both parties were not properly informed of all the details.
There a number of ways to deal with long-term support, and each one is going to be solely dependent upon the people involved. It will come down to what is going to work best for each party in the situation. Both parties are going to need to consider the resources available to them and what their current needs are as well as what could happen in the future. There is much that needs to be considered in an effort to determine the amount and length of support if both parties are unable to agree, in this case, it will need to go to trial to allow a judge to consider all the aspects of the case. With so many considerations, you should talk with a legal coach about your various options and see how it will affect your life in the longterm.