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What should high-income earners expect when alimony comes calling?

Alimony, or as some call it, spousal support, is an interesting subject and is rarely easy to determine. It’s not as simple as setting a figure and saying the high-income earner must pay their spouse “this much or else.” The court or mediator considers many factors when alimony determinations occur, the setting and communication style, whether during mediation between you and your spouse, collaborative divorce or in court does not matter.

If you choose mediation, you are allowing yourself and your spouse more control of your future lives. But with mediation comes sacrifice and compromise. If the separated couple’s tension is so high that mediation is impossible, the court will determine the cost of spousal support.

So how is spousal support resolved for a high-income earner and their stay-at-home or lower-earning future ex?

Mandatory deductions

The process starts by figuring out the necessary needs, earned income and earning potential for each spouse. Some mandatory deductions (income taxes, healthcare costs, or social security) from the spouse’s gross income occur to come up with a final net income. For high-income earners whose partner stays at home or earns quite a bit less, it’s important to understand that other payments, like car loans or mortgage payments, will not be subtracted in your net income when determining alimony.

Earning potential

Let’s say the divorcing couple’s high-income earner is a resident doctor earning $70,000 per year. While that may seem like a comfortable but not a “high-earner” income, the court will consider the medical resident’s earning potential, which is upwards of $200,000 per year as they rise in their profession, when finalizing alimony.

The opposite of this example could also take place. If a commercial airline pilot who makes $130,000 per year decided to become a freelance pilot making $65,000 per year, the court could determine alimony based on their earning potential. Courts highly consider the couple’s pre-divorce standard of living when calculating alimony.

Self-support

Practical work skills and the ability to work are critical factors when determining alimony. If one spouse doesn’t have many skills that would be redeemable in the job market, is parenting very young children or doesn’t have access to childcare, the higher-income earner may be on the hook for more support.

On the other hand, if the low-income spouse has redeemable work skills, but decides not to seek work, the court will likely side with the higher-income spouse. The court will do so by lowering the amount and length of alimony the higher-income spouse must pay. The bottom line is that if both spouses can work, they must, or they will face the consequences.

If both spouses are working positions that allow them to self-support, the court or the couple, if they choose to mediate, can decide that alimony is not necessary.

If the earning responsibilities fell solely at the feet of the high-earning spouse, they would be responsible for paying spousal support for a rehabilitative period that would allow the dependent spouse to gain a financial foothold. The rehab period can last several months to years in some cases.

Extensions and terminations

Depending on the circumstances, each party may have an advantage. If the spouse receiving support becomes self-supporting before the rehab period has ended, the high-earning spouse can file a petition to terminate their alimony obligations.

For the dependent spouse, if life events occur that have disallowed you from reaching self-support status, you can also file a petition for an extension of alimony benefits.

As a final note, the court or mediator considers the duration of a marriage and each spouse’s physical, mental, and emotional state when calculating spousal support.