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Spousal Maintenance FAQ

Is there still such a thing as alimony?

Yes. Alimony still exists. In Minnesota, alimony is referred to as “spousal maintenance” or “maintenance.” Quite often, maintenance is only for a set period of time (rehabilitative maintenance) such as for two or three years so as to allow the spouse some time to get back on his or her feet financially. In some cases, a permanent award of maintenance will be made. With a permanent award, maintenance would continue to be paid for an indefinite period, usually until the person receiving it dies or remarries, or perhaps the retirement of the person paying it. Whether a person is entitled to receive maintenance depends on many factors including:  (1) the person’s age and health, (2) length of marriage, (3) education, (4) work history, (5) each party’s income, (6) the amount of child support being paid, and (7) each party’s monthly budget based on their lifestyle prior to the divorce. There are no precise formulas or guidelines dictating the amount of maintenance to be paid. It varies in each situation. In many cases, the parties waive the right to maintenance. This is sometimes referred to as a “Karon Waiver.”  If this is done, maintenance cannot be obtained at a later date. In other cases, the parties reserve maintenance, which means that no maintenance is paid at the time of the divorce, but the court may later award maintenance if circumstances change.

Are spousal maintenance payments tax deductible?

One important difference between child support and maintenance relates to taxes. When filing your tax returns, child support is not subtracted from the income of the person who pays it. Likewise, it is not included as income for the person who receives it. On the other hand, a person who is paying mainte­nance deducts that amount from his or her income when filing tax returns. Additionally, the person who is receiving the maintenance must declare those payments as income for their taxes.

Can the amount of maintenance be changed?

As both parties’ incomes change over the years, it is possible to change the amount of maintenance which you are paying or receiving. The most common reason for changing the amount of maintenance would be if the person who was paying the support (the obligor) has a substantial increase or decrease in his or her income. It may also be modified if the needs of the person receiving the payments (the obligee) has a substantial increase or decrease in his or her income or a substantial increase or decrease in his or her monthly expenses. Changing the amount of maintenance may require the assistance of an attorney as you must go back before the court to explain why a change is appropriate. This requires the preparation of paperwork and at least one appearance by your attorney. As the cost can sometimes be substantial, you should discuss this with your attorney if you think a change might be appropriate in your case. In most cases, a cost of living adjustment (COLA) is made to maintenance automatically every two years to keep pace with inflation.

What if I’m ordered to pay maintenance and I lose my job?

Under Minnesota law, maintenance arrearages are rarely forgiven. If you lose your job, but do not go back before the court to change the monthly support which you are ordered to pay, you cannot later ask the court to forgive those amounts. Therefore, if you are ordered to pay maintenance and you have a substantial change in your income, you should immediately go back before the court to have your maintenance obligations lowered. Although it costs money to do this, it may be minimal compared to having a judgment entered against you for arrears. Once again, if in the future you believe that your income has changed so that the amount you are paying should be reduced, you should act immediately.

Will we have to obtain or maintain our life insurance?

As discussed earlier, when there are minor children, sometimes it is agreed that the parties will obtain life insurance on themselves, naming the children as beneficiaries. When spousal maintenance is ordered, sometimes a party may be required to continue naming his or her ex-spouse as a beneficiary under life insurance policies. If you have life insurance policies on yourself or your spouse, you should discuss this with your attorney. It is important that you follow up on this after the divorce and make sure insurance is obtained and the premiums kept up to date. If the premiums are not paid, the insurance will not pay, even though your spouse was ordered to keep insurance in force. Likewise, if your spouse is no longer going to receive the proceeds from your life insurance policies, you must follow up after the divorce to ensure that their name is removed. A change in the beneficiary is not effective until this has been done.