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How Minnesota Divorce Lawyers Deal With the 2019 Alimony Change
September 23, 2021
Statistically, it is very difficult for divorced women to rebuild wealth. Therefore,spousal maintenance is an important part of most Minnesota divorces. Beginning on January 1, 2019, alimony will be a lot different.
One change went into effect in August 2016. The new alimony reform law actually affected spousal support modifications, which means that the law is just now coming into play. The Cohabitation Alimony Reform Bill makes it easier to modify alimony based on future cohabitation. There was a concern among many Minnesota Divorce Lawyers that ex-spouses lived with their partners but did not get married so as to not affect their alimony.
The new law does not outlaw this practice, but it does give obligor spouses a fighting chance. Instead of simply looking at the exchange of vows, judges may consider several factors, such as the length of cohabitation and the economic benefit which the ex-spouse receives from this arrangement.
The other big change was part of the December 2017 tax reform package. Currently, alimony payments are tax-deductible and alimony receipts are taxable income. Effective January 1, 2019, both these things go away. The obligor can no longer deduct alimony payments, and the obligee does not have to report the payments to the IRS or MDR.
For tax purposes, spousal support payment will be like child support payments. Neither payments nor receipts have any tax consequences. If alimony reformers had their way, the entire system would change along these lines. Many people decry the subjective nature of alimony in places like Minnesota. In the summer of 2017, there were rumblings that the Legislature would soon consider a comprehensive alimony reform bill. But so far, nothing has materialized.
Do You Qualify for Alimony in MN?
In Minnesota, alimony is also known as spousal maintenance or spousal support. Spousal support can either be court-ordered or drawn up by a divorce lawyer. But what exactly is alimony?
The concept of alimony came about because the majority of families used to live off of one salary while the other spouse tended to house duties. After divorce, the unemployed spouse would have trouble making ends meet. So, alimony was designed to help provide support until the unemployed spouse found work or got remarried.
Times have changed, but alimony is still a big part of divorce proceedings. Now, the higher-earning spouse must make monthly payments to the lesser-earning spouse.
Of course, the law is completely genderless. That means the lower-earning spouse can get alimony regardless of their sex.
Today, there are two major requirements for spousal maintenance. The first is that the lower-earning spouse lacks the assets he or she needs to maintain the marital standard of living post-divorce.
A court might also award alimony if the lower-earning spouse can’t support himself or herself. This also applies when one spouse is the custodial parent and, due to the child’s circumstances, must remain unemployed.
In most Minnesota divorce agreements, the alimony amount depends on how long the marriage lasts. The shorter the marriage, the less spousal support, and vice versa.
Spousal Support Termination
Spousal support isn’t always for a lifetime. As we mentioned above, moving in with an adult partner can be grounds for alimony termination.
To prove the cohabitation is worthy of canceling spousal support, the court must evaluate various factors, including whether there are grounds to think the partners would marry if not for the alimony payments and the impact on the lesser-earning spouse if alimony payments ended.
But that’s not the only way you can lose your spousal maintenance payments.
Even before the new alimony laws, if the lower-earning spouse remarried, that was grounds for termination. Of course, Minnesota also allows spousal maintenance to be terminated if either spouse dies.
Can a Minnesota Divorce Attorney Set Up an Alimony Agreement?
Yes! You don’t need a judge to create an alimony agreement, only to enforce one. If you and your spouse can agree on the terms, a divorce lawyer in Minnesota can draw up the agreement, present it to your divorce court judge, and get a court order to enforce it.
Usually, this type of alimony agreement gets drafted as part of the divorce decree. But if you and your spouse can’t come to an agreement, you may still be able to compromise outside of court.
Many couples bring their alimony disputes to a mediator or Early Neutral Evaluation (ENE). Here, an expert in mediation will help you and your spouse come to a compromise. If you still can’t agree on spousal support at this point, the case will go to court, and a judge will determine spousal support at his or her own discretion.
Prenuptial Agreements and Alimony in Minnesota
The best divorce attorney can also help you and your spouse draft a prenuptial agreement, also known as a premarital agreement. Engaged couples often ask their attorneys to include alimony agreements in prenups.
As long as an attorney drafts the premarital agreement and you and your spouse agree on the terms of alimony, this agreement is enforceable in a Minnesota court. It would have precedence over any other alimony agreement made by you or a judge.
In your prenuptial agreement, you and your spouse can specify who will receive alimony. It should also detail the amount and type of alimony the receiving spouse is eligible for. We’ll talk more about the types of alimony you can get in Minnesota next.
What Types of Alimony Can Minnesota Divorce Lawyers Set Up?
As it stands, Minnesota law contains three different kinds of alimony. A Minnesota judge may order any, all, or none of these types.
Temporary Maintenance: While the case is pending, many spouses have immediate and unexpected financial needs. These needs include things like attorneys’ fees, property deposits, and household maintenance expenses such as rent and utilities. Temporary maintenance gives spouses the money they need to meet these expenses. Income is basically the only factor. Courts rarely look at the broader picture.
Short-Term Maintenance: These payments are appropriate if a spouse needs some additional help after the divorce to become self-sufficient. That could be money to finish a college degree or an additional income stream because the spouse must accept a lower-paying entry level job. Other ex-spouses need money while they wait for a house to sell.
Long-Term Maintenance: Reformers hate this third type of alimony. It is subjective and also clearly designed to redistribute income. Although the rule is not set in stone, most Wright County judges do not award long-term alimony unless the spouse can never become self-sufficient, perhaps due to a disability, or the marriage lasted longer than ten years.
Minnesota Divorce Lawyers may usually modify the alimony terms based on changed circumstances. As discussed above, the 2016 alimony reform bill made these motions easier to prove in some situations.
Factors in Determining Amount of Payments
The above categories roughly coincide with the duration of alimony payments. For example, temporary maintenance automatically ends when the judge signs the decree. As for the amount of payments, the judge basically weighs the obligee spouse’s economic need against the obligor spouse’s ability to pay. Some specific factors include:
Each Spouse’s Economic Means: In addition to employment and other income streams, the judge may normally take the property settlement into consideration. That includes any award of separate property.
Educational Need: Obligor spouses do not need to help pay for self-improvement classes. But they do have a legal obligation to help pay for courses related to economic self-sufficiency. That status is in everyone’s best interest.
Standard of Living During the Marriage: This factor looms large in long-term maintenance awards. According to the law, the divorce should not be an unfair financial burden for either spouse. Some financial pain is inevitable. But, it should be evenly spread between the parties to the greatest extent possible.
Fault in the breakup of the marriage is not relevant with regard to alimony. But Minnesota Divorce Lawyers may be able to introduce such evidence in the property division phase, through a back door called the dissipation (waste) rule. If Wife spent $10,000 on a gift for a boyfriend, Husband may be entitled to reimbursement for the community share.
Can Minnesota Divorce Attorneys Modify Your Alimony Agreement?
When the alimony is initially awarded, you and your spouse can request a no modification agreement. This is what’s known as a Karon Waiver. This waiver is named after a 1989 case where a former spouse sought an increase in alimony after agreeing to waive her right to modification during the divorce proceedings.
Karon Waivers specify that either one or both spouses will forfeit the right to request an alimony modification down the road. But barring one of these agreements, the best Minnesota divorce lawyer could ask for an alimony modification in certain situations.
The most common reason for a request to modify alimony is if the receiving spouse experiences a change of circumstances. For example, say the receiving spouse’s income decreases or, alternatively, his or her expenses increase. In this case, the receiving spouse could request a modification to increase alimony payments.
The paying spouse can also request an alimony modification. As we’ve mentioned, this usually only occurs if the receiving spouse remarries or passes away. Under Minnesota’s new alimony mandates, the paying spouse’s divorce attorney might seek to decrease or eliminate spousal support due to cohabitation.
Learn from a MN Divorce Lawyer How Changes in Alimony Law Might Benefit You
Parts of the alimony law are changing, but other parts are still the same. For a free consultation with experienced Minnesota Divorce Lawyers, contact Carlson & Jones, P.A. Convenient payment plans are available.
Original article published June 16, 2018 and updated September 23, 2021.