In Colorado, we use the term maintenance, which is commonly known as “alimony.” Generally, the judge orders that maintenance be paid at some amount over some period of time. Unless there is another agreement by the parties, maintenance is terminated if either party dies, if the person receiving maintenance remarries, if the term of the maintenance is over or if there is a new court order.
When does a judge award maintenance?
Many people believe that maintenance is calculated with a formula but there is more to it than that. Before a judge considers how much maintenance to award, the judge has to first determine whether maintenance is even appropriate. The judge looks at several factors such as:
- The financial resources of the spouse that would be paying – can he/she meet their own reasonable needs while paying maintenance to the other spouse.
- The financial resources of the spouse that would be receiving – can he/she meet their own reasonable needs without maintenance.
- The lifestyle during the marriage.
- The age and health of the parties.
A judge can award maintenance to someone no matter how short the marriage is. I have seen maintenance awarded for marriages of only a year, however, the maintenance was just a few months.
How is maintenance calculated?
Once a judge determines that maintenance would be appropriate, the judge then has to determine how much and for how long.
Before 2014, maintenance awards varied greatly depending on which judge you had. In 2014 the Colorado legislature implemented a maintenance formula that gives all judges some guidelines for how much maintenance to award based on the parties’ incomes.
Now, if the parties earn less than $240,000/year together, and the judge has determined that maintenance would be appropriate, the judge looks at the guidelines.
The guidelines use a formula where you plug in the parties’ gross monthly incomes and the length of the marriage, and the formula generates a specific dollar amount and duration for maintenance. Those numbers are just a guideline for the judge to consider. The judge is free to state reasons why they have chosen to award a higher or lower number. In my practice I have found that most of the time the maintenance number the judge orders is very close to or exactly what the guidelines are.
In 2019 there was another big change in the maintenance laws. Prior to that, the person that paid maintenance was able to deduct the maintenance on their tax return and the person that received maintenance had to claim the maintenance as income on their tax return. The IRS changed the tax laws so that any maintenance ordered after 12/31/2018 would NOT be a tax deduction for the person paying and the person receiving would no longer have to claim it as income. The Colorado legislature modified the guidelines to account for maintenance no longer being a taxable event. If you use the same income numbers using the maintenance formulas from 2018 and 2019, the 2019 maintenance numbers are lower in order to compensate for the new tax laws.
Two Types of Maintenance
There are two types of maintenance. I refer to them as “regular” maintenance and “contractual” maintenance. If you go to court and the judge awards maintenance of some amount for some time period, that is regular maintenance. Under certain circumstances, the judge can later modify the maintenance amount, terminate maintenance early or extend it for a longer period of time. If two people reach their own agreement that states that one of them will pay maintenance to the other for some time period, that is also regular maintenance and it can be modified under certain circumstances.
Sometimes people want to make sure that the maintenance is an exact amount for an exact time period with no changes. This is called “contractual” maintenance and the court cannot order this. All maintenance ordered by the court is modifiable. However, if two people reach their own agreement in mediation or on their own, they can use language in the agreement that states that the maintenance is “contractual” in nature and cannot be modified. There are times that contractual maintenance is a good idea but you have to be very careful. When the maintenance is contractual, no matter what happens, you cannot change it. If a spouse agrees to pay some amount for eight years, and a year later they become totally disabled, they still have to find a way to pay the rest of the years. There are no exceptions.
Calculating maintenance is somewhat complicated and this article only contains a brief overview. If you are in a situation where you think you might have to pay or might receive maintenance, it is best to consult with an attorney experienced in family law.