What is Alimony in Colorado?
Alimony, or spousal maintenance, is an important concept in Colorado divorce law. Alimony is designed to provide support to a spouse after a divorce, with the aim of ensuring that both parties are able to maintain a reasonable standard of living post-separation. Traditionally, alimony was viewed in a somewhat negative light, associated with the notion that one party was being "punished" by having to provide financial support to their former spouse . However, in contemporary divorce law, the approach to alimony has changed dramatically. In Colorado, alimony is no longer seen as a punishment or a reward. Rather, it is a mechanism that is designed to help spouses make a reasonable transition following the dissolution of the marriage. The law takes a more collaborative approach to alimony, recognizing that its purpose is to help both parties move forward with their lives without fear of financial uncertainty.
How is Alimony Determined in Colorado?
Colorado courts take into consideration a multitude of factors when calculating the proper amount of maintenance. As a preliminary matter, Colorado law states that except in cases of agreed divorce, the period of the marriage is an important factor in determining whether alimony is appropriate. The first five years of the marriage are considered a short term. In Colorado, since 1985, the remaining period is divided into distinct categories: from more than 5 years but less than 20 years is considered a mid-length marriage; from more than 20 years is considered a long-term marriage.
For the purposes of duration and "amount" under Colorado law, "marriage" means the period of time from the wedding until living apart. Periods of living apart in some cases can be added together to determine the length of the marriage. A "short" term marriage may still require maintenance as durational payments, although payments are limited both as to amount and duration.
Some factors judges consider when determining the amount of maintenance are: (1) the length of the marriage; (2) the amount of the spouses’ property assets; (3) the amount of income or ability to earn of each spouse; (4) the time necessary to acquire sufficient education or training by the spouse seeking maintenance for appropriate employment; (5) and any supportive services provided by the spouse seeking maintenance. Also, the court may consider the changes in the standard of living that occurred over the course of the marriage and whether the recipient spouse will be able to achieve a standard of living reasonably comparable to that enjoyed during the marriage.
There are judicial guidelines for the amount of spousal maintenance in Colorado based on the length of the marriage, the income of each spouse, and the parties’ respective financial affairs. There is a rebuttable legal presumption if the judge follows the judicial guidelines. If the judge deviates from the judicial guidelines, he or she must issue written findings of fact supporting that deviation.
It is also possible for spouses (or prospective spouses) to enter into private maintenance agreements by contract. A judge may not approve the maintenance agreement if it appears to be unfair, either at the time it was made or at the time for review.
Types of Alimony in Colorado
The Colorado Revised Statutes refer to spousal support as "maintenance" and provide for three types of maintenance: (1) temporary maintenance generally provided during the pendency of the divorce proceedings; (2) short-term maintenance paid for a finite, temporary period of time after entry of the decree; and (3) long-term, or permanent, maintenance. Maintenance is awarded only when deemed fair and equitable. When a couple files for divorce, a spouse can request that the Court enter orders regarding interim maintenance. Temporary maintenance can be awarded without regard to the marital property of the parties or the duration of marriage. The Court can also award interim maintenance when there are no divorce proceedings pending and one spouse is in need of maintenance and the ability of the other spouse to pay maintenance is proven. Thus, in Montgomery v. Montgomery, 13 P.3d 794 (Colo. App. 2000), the Court granted temporary maintenance to the wife while the divorce proceeding was pending even though the parties had been separated for 13 years and no action for legal separation was pending. Maintenance can also be awarded for a limited period of time. In maintaining a one income household, one spouse may have looked to the other to obtain a vocational education or continued higher education. On dissolution of the marriage, a spouse may need assistance transitioning to their new life. In such a case, the Court may award rehabilitative maintenance, which is longer than temporary maintenance and longer than pendente lite (after the filing of a motion until entry of the decree). Rehabilitative maintenance may not exceed two years from the date of the decree and serves to allow a spouse to gain training for a vocational skill or to complete their education. The duration of such maintenance can be critical, since the spouse in need of vocational or educational support may not meet the rehabilitative maintenance criteria if the Court awards rehabilitative maintenance and then the spouse has the basis for requesting further maintenance. Permanent maintenance, or maintenance for an indefinite period, is available when the Court considers the extent to which the spouse seeking maintenance has reduced or lost their income or employment opportunities because of prior duties performed for the family (such as homemaker). At least 50% of the parties’ marriage must have occurred after the spouse seeking maintenance reached the age of 50. Additionally, permanent maintenance is awarded when either spouse has a physical or mental condition that substantially impairs their ability to work and the spouse seeking maintenance lacks sufficient property to provide for their reasonable needs and is unable to support themselves through appropriate employment. Permanent maintenance is also available when the spouse seeking maintenance contributes to the enhancement of the other spouse’s earning power, the skills or education are sufficient to enable a spouse to support themselves, but the sacrifices made by each spouse during the marriage justified an award of permanent maintenance. The Court will consider all relevant factors when determining maintenance awards. For example, the Court will look at how alimony payments effect the tax ramifications for one spouse, but it will not be the sole determiner of a maintenance award.
Termination and Modification of Alimony
Nearly all divorce decrees contain a provision relating to the possibility of the modification or termination of alimony in the future, should the financial circumstances of one or both parties change. A court can modify alimony obligations upon a showing of a substantial and continuing change in circumstances that was not contemplated at the time of the initial order either making the alimony award or establishing a specific amount and could not have been avoided through the exercise of reasonable diligence. The change in the circumstances must be substantial enough to warrant a modification of the original order.
The courts strictly construe the criteria for termination or modification, however, because of the "judicial distaste" for reducing or eliminating support for a former spouse. Simply stated, alimony payments (commonly known as "spousal maintenance" under Colorado law) are not "modifiable" under Colorado law based solely on the changes in the financial circumstances of the parties.
Colorado divorce law provides for only two circumstances under which alimony payments can be modified, terminated or eliminated. First, the death of one of the parties terminates an obligation to pay alimony. Second, the remarriage of the recipient "toll[s] the clock", or temporarily stops the parties’ alimony obligations, unless otherwise agreed upon by the parties. Alimony does not get "smaller" over time because a party’s financial circumstances have changed .
The remedy for alimony modifications or terminations, in either a temporary or permanent nature, requires a party to file a motion with the Court. This process is somewhat similar to how child support is modified or terminated. A party who is seeking a temporary termination of alimony during the period of time that a former spouse is cohabitating must file a motion and include factual allegations and documentary evidence that show that cohabitation exists with another person. The party requesting the temporary suspension of alimony is entitled to a hearing on the motion, and the burden of proof is on the party requesting the temporary order. The temporary suspension or termination is enforced pending the trial of the merits of the case unless the trial court orders otherwise.
A permanent modification, termination or elimination of an alimony obligation takes place by agreement of the parties and may be jointly requested in the motion. Local rules apply to most counties; thus, a party must ensure that the proper procedures are followed to preserve and protect the legal rights of the parties. Colorado law provides for the award of alimony to parties with unequal earning capacity. An award of alimony can also be terminated, modified or eliminated after the entry of a decree of divorce or legal separation, but the fact that a party has remarried/to whom a party has remarried does not in itself serve as a ground for modification of an alimony obligation.
Tax Issues Regarding Colorado Divorce Alimony
For the duration of a marriage that is subject to alimony, there are generally two means by which money is paid in connection with a marital agreement or a court order. Alimony can be either taxable to the recipient or it can be paid from a pre-tax source such as a 401(k) or individual retirement account, or with net earnings from a job. There are tax consequences for the recipient and the payor. In addition, the deductibility of alimony paid by a payor is a consequence that the payor may count on as an incentive for paying the algebraic amount of alimony per the formula set forth in the alimony statute. In the past, the IRS allowed the amount of alimony to be deducted from the payor’s income and this amount would then be taxed at the recipient’s lower tax rate. The impact was that a greater amount of alimony was paid by the alimony payor and a lesser amount of alimony was paid to the alimony recipient because of the differential in tax rates – usually the payor was in a higher bracket and the recipient was in a lower bracket. This differential tax rate minimized the actual cost to the payor of the agreed amount of alimony per the alimony formula statute. For divorces dated before December 31, 2017, the alimony statute provided: In each case where a maintenance order is made, the court shall identify the monthly amount of maintenance it has granted and, in a separate finding, the amount of monthly maintenance that would have qualified for a deduction for federal income tax purposes if the Internal Revenue Code of 1986, as amended, were applicable to such ordered maintenance. The total amount of all maintenance payments pursuant to the order shall not exceed the amount that would qualify for a deduction for federal income tax purposes under the Internal Revenue Code of 1986, as amended. Some divorce proceedings did not involve a deduction finding, merely the statutory language as set forth above. The Tax Cuts and Jobs Act of 2017 wiped out the ability of alimony recipients to count on any tax benefit to them or their spouse if the divorce or legal separation is dated after December 31, 2018, or if the divorce is an annulment and the annulling of the marriage is dated after December 31, 2018. Because of this Congressional change, there is no need for the alimony statute providing where the court must perform a monthly calculation: The courts will not now make monthly calculations. The change in tax law will act as an incentive for payors to pay less alimony in Colorado if the parties or the court cannot calculate the monthly amount of alimony that would be deductible on the payor’s tax return, or for the recipient to keep financially "whole" from the reduction in the amount of alimony available to the recipient without a tax deduction. Another change in tax law that must be considered by each alimony payor and by each alimony recipient spouse is in regard to the amount of income necessary to pay the amount of alimony that is owed or expected to be paid or granted to them. Nearly half of the incoming alimony payments in Colorado are automatically assigned in satisfaction of debts owed by the recipient. The amount of income received by the blend of alimony and other income must be sufficient to cover the amount of the debts. The ratio of income to discretionary income out of which the alimony is paid must be evaluated and it will be evaluated in light of the debt ratios taken into consideration by the Internal Revenue Service for the alimony payor spouse, and the debt ratios to be taken into consideration by the Internal Revenue Service for the spouse receiving the alimony payments.
Alimony Law Resources
It is imperative that you seek the assistance of a qualified Colorado divorce attorney in order to represent you in your lawsuit. The information detailed within this blog post should not be used as a substitute for working with a Colorado family law attorney. Alimony laws can be both complex and nuanced, and the amount you are awarded may depend on the facts of your individual case. Without the assistance of a Colorado divorce lawyer, you will likely make mistakes that may cost you your alimony award.
That being said, there are resources available that may assist you in educating yourself on the alimony process. Several organizations across the state of Colorado are dedicated to helping men and women alike receive the financial spousal support that they require. Some organizations that may benefit your case include:
The Colorado chapter of this national organization seeks to provide assistance to low income families in Colorado . Through the coalition, you will be directly connected to the attorney who can provide representation on your case. The Colorado chapter of the AFL-CIO is an organization that provides education to the general public on issues affecting those in the private non-profit sector. The organization may have a legal services referral program that will meet your needs. The mission of the organization is to deliver affordable and accessible civil legal services to low and moderate income people. Of all of the programs in Colorado, this one is most likely to be the most useful to your case.
Your alimony case is an extremely serious matter. While veteran divorce attorneys will likely not need it, it cannot hurt to seek legal advice and information from folks who are intimately familiar with your case.