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Alimony in Minnesota
"Alimony" is the term used in many states for financial support paid to a ex-spouse after a divorce. In Minnesota
the term "alimony" has been replaced with the term "Spousal Maintenance." The terms are synonymous.
Overview
As recent as 1984, Minnesota Statutes relating to awards of spousal maintenance were interpreted by the Minnesota Courts of Appeal as disfavoring awards of permanent spousal maintenance. At that time, in order for the Court to award permanent spousal maintenance, it had to fins that exceptional circumstances existed warranting an award of permanent financial support. To demonstrate that an exceptional case existed, the party seeking the award of permanent maintenance had to show that he/she had little likelihood of becoming self - sufficient. Since 1984 Minnesota Statues have been modified by the state legislature to favor permanent spousal maintenance awards when certain circumstances exist. In 1985 amendments to Minnesota Statutes modified the spousal maintenance statute to require trial courts to consider the standard of living established during the marriage when awarding spousal maintenance. The 1985 amendments also added language requiring an award of permanent spousal maintenance where there is uncertainty regarding the need for a permanent award. In short, if there was any question whether permanent spousal maintenance was necessary, that uncertainty was to be resolved in favor of a permanent spousal maintenance award.
Current Law
Unlike child support, there are no percentage guidelines set out in Minnesota Statutes to determine when spousal maintenance is appropriate or at what level. As a result, spousal maintenance often becomes one of the most contested issues in divorce proceedings. Currently, spousal maintenance awards are granted pursuant to Minnesota Statutes S. 518.552 if the spouse seeking maintenance demonstrates that he or she:
In determining the amount and duration of spousal maintenance, Minnesota statutes require that Courts address all relevant factors. The statute specifically identifies the following as relevant issues in determining spousal maintenance:
Awards, Denials and Modifications of Maintenance
If the parties are unable to resolve disputes related to spousal maintenance, after a trial that considers the factors set out in the previous section, a court may:
Awards of spousal maintenance may be "temporary or rehabilitative", designed to rehabilitate the spouse so that he/she may become self-supporting, or "permanent." No matter whether spousal maintenance is awarded, denied or reserved after a trial, the issue may be always be readdressed and spousal maintenance modified upon a showing that there has been a substantial change in circumstance making the original award (or denial) unreasonable or unfair. From a practical standpoint, it is unlikely that a Court denying spousal maintenance would later change that determination absent compelling circumstances. A compelling circumstance may include a critical illness befalling the party seeking maintenance which renders that person incapable of working or providing for their own support. There would also have to be a showing that the person from whom maintenance is sought has the ability to contribute. Temporary awards of spousal maintenance usually dictate factual presumptions on which the award is based. For example, maintenance may be awarded for a period of five (5) years at a certain level predicated on the recipient enrolling in and completed educational courses and finding employment in that period of time. Either party may bring the matter back before the Court if the recipient becomes self supporting at an earlier date or , through no fault of his/her own, fails to find employment within the designated period. Orders setting forth detailed educational and employment time lines on which the maintenance award is based tend to favor the person paying spousal maintenance since the recipient must demonstrate good cause why the time lines were not followed or achieved to extend the spousal maintenance beyond that period.
Waivers of Spousal Maintenance
There are only one way to preclude the Court from having jurisdiction to award spousal maintenance. Minnesota Statutes relating to spousal maintenance awards specifically allow the parties to enter into a private agreements that preclude or limit spousal maintenance awards. These agreements may take the form of properly executed prenuptial agreements or agreements reached as part of the divorce proceedings. Unfortunately, such agreements are disfavored by Minnesota Courts. Any court that is asked to enforce such an agreement must determine that the stipulation is fair and equitable and supported by adequate consideration after full disclosure of each party’s financial circumstance. Since the Court determines what is fair and equitable at the time of the divorce, it is particularly unlikely that prenuptial agreements executed years in advance will carry much weight. What is fair and equitable at the time the marriage begins may not be fair and equitable when it ends.
Spousal Maintenance Buy-outs
In most cases, the interests of persons asked to pay spousal maintenance are better served by offering an immediate buy-out of spousal maintenance in return for a waiver that would preclude the court from modifying spousal maintenance in the future. This buy-out may occur as part of a property settlement that favors the party seeking maintenance. To determine what amount to offer or accept as a buy-out, it is important to consider two factors:
Present value refers to the value of a dollar today as compared to the value at some point in the future. Remember, a dollar paid today is more valuable than a dollar received next year or even next week since the money properly invested would gain interest over that period. As a direct result, a buy-out of spousal maintenance will always be less than the total value of the spousal maintenance paid over time.
Tax Consequences of Spousal Maintenance
In deciding whether to "buy-out" the other party’s spousal maintenance, it is important to consider the tax consequences. Property or proceeds exchanged as part of a property settlement is not taxable event. The proceeds paid are not deductible to the payor or taxable to the recipient. By contrast, the payment of spousal maintenance is a taxable event. Spousal maintenance is tax deductible by the person paying. It is not included as income for the obligor giving that party a dollar for dollar offset against his/her earnings. By contrast, spousal maintenance that is paid is included as taxable income by the person that receives it. It is also important to note that attorney’s fees incurred by a party seeking spousal maintenance may be tax deductible as an expense incurred for the production of income. You may wish to speak with your attorney regarding that issue.
Vocational Evaluations
To determine the skill level of a spouse seeking spousal maintenance, it may be necessary to have a vocational evaluation performed. If requested by a party, it is likely that a Court will require the party seeking spousal maintenance to cooperate with such an assessment. A vocational evaluation is conducted by a Qualified Rehabilitative Consultant (QRC). During the evaluation stage, the QRC will administer a series of questionnaires designed to highlight the vocational strengths and weaknesses of the party being tested. With theses test results, the QRC examines the fields of employment in which the person examined is likely to have the most success. The evaluation also analyzes the past work and educational history of the individual as well as that person’s employment goals. After the evaluation has been performed, the QRC drafts a report that identifies the fields in which the tested person has demonstrated strengths. The report then analyzes the field to determine what additional education is necessary, if any; the likely period of time for completing that education; the costs associated with the education; and the likely wage that the tested person is likely to achieve after education and training. The results of a vocational evaluation may be challenged at trial. However, these independent experts hold great sway with the Court in determining the amount and duration of spousal maintenance awards.
How to Present Your Maintenance Case
As previously stated, some relevant factors considered by the court in deciding whether to award spousal maintenance include the finances of the parties, the education levels of the parties, the work histories of the parties, the health of the parties and the standard of living the parties established during the marriage. In order to properly document these issues at trial you should provide the following:
ENDNOTES:
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Marital property, which is all assets and debts acquired during the marriage, is divided equitably, in a manner the Minnesota court believes is fair. Separate property is not considered marital property, and it includes property acquired before marriage, gifts and inheritances. The increase in value in this property is also separate property.
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