The Ultimate Guide to Alimony in NC
If you and your spouse are thinking about separating, and your income level varies tremendously, than you may need to know more about alimony in NC. North Carolina has a lot of weird nuances to its alimony law that cannot be found in other states. If alimony is something you may need to pay or will rely on to live, then you need to educate yourself about what it is, how to calculate it, and what to do if you or your spouse has had an affair (which can drastically impact alimony in NC). Consider this the Ultimate Guide to Alimony in NC.
What is Alimony in NC?
Alimony is a payment of money from one spouse to the other as are result of a separation or divorce. Alimony in North Carolina is paid from the “supporting spouse” to the “dependent spouse”. These terms are defined in the North Carolina Statutes § 50-16.1A.
A dependent spouse is the spouse that makes less money than the supporting spouse, although the North Carolina statues define the dependent spouse as “a spouse, whether husband or wife, who is actually substantially dependent upon the other spouse for his or her maintenance and support or is substantially in need of maintenance and support from the other spouse.”
What’s interesting about this definition is that the dependent spouse must be “actually substantially dependent” upon the other spouse – so just because someone makes less money than the other spouse does not make them dependent.
As for the supporting spouse – it is the spouse that earns more money than the dependent spouse at the time of the separation. And the statutes define the supporting spouse as the “spouse, whether husband or wife, upon whom the other spouse is actually substantially dependent for maintenance and support or from whom such spouse is substantially in need of maintenance and support.”
Again, there is a requirement that the dependent spouse be “actually substantially dependent” on the supporting spouse.
That being said, there are a number of other factors that come into play in North Carolina when the Court is deciding whether or not to award alimony. Some cases are cut and dry, while other cases are anything but.
The 16 Factors that Impact Alimony in NC
There are 16 factors that the Court must consider when deciding on the amount and duration of an alimony payment. These factors include:
(1) The marital misconduct of either of the spouses.
(2) The relative earnings and earning capacities of the spouses;
(3) The ages and the physical, mental, and emotional conditions of the spouses;
(4) The amount and sources of earned and unearned income of both spouses, including, but not limited to, earnings, dividends, and benefits such as medical, retirement, insurance, social security, or others;
(5) The duration of the marriage;
(6) The contribution by one spouse to the education, training, or increased earning power of the other spouse;
(7) The extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child;
(8) The standard of living of the spouses established during the marriage;
(9) The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs;
(10) The relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support;
(11) The property brought to the marriage by either spouse;
(12) The contribution of a spouse as homemaker;
(13) The relative needs of the spouses;
(14) The federal, State, and local tax ramifications of the alimony award;
(15) Any other factor relating to the economic circumstances of the parties that the court finds to be just and proper.
(16) The fact that income received by either party was previously considered by the court in determining the value of a marital or divisible asset in an equitable distribution of the parties’ marital or divisible property
I realize that these factors aren’t necessarily helpful to you in figuring out how much alimony you will receive or pay, and for how long. But reading through them will give you a sense of what information the court will consider when making a ruling on alimony.
How Does “Illicit Sexual Behavior” Affect Alimony in NC?
In North Carolina, whether or not one of the spouses engaged in “illicit sexual behavior” can have a profound effect on the award of alimony. Before we discuss what that effect is, it is important to understand what illicit sexual behavior is so that you can avoid this problem altogether.
Illicit sexual behavior is listed as a type of marital misconduct in the North Carolina Statutes. And although many of the other acts of marital misconduct may play a small role in the amount and duration of alimony, none of them have as big an effect as illicit sexual behavior.
The NC statutes define illicit sexual behavior as:
“acts of sexual or deviate sexual intercourse, deviate sexual acts, or sexual acts defined in G.S. 14-27.20(4), voluntarily engaged in by a spouse with someone other than the other spouse”
Basically, illicit sexual behavior is the act of having sex with someone else outside of the marriage. And in North Carolina, doing this is a very bad thing if you are in the position to pay alimony, and even worse if you should be receiving alimony.
The “Dependent Spouse”
If you are the dependent spouse (i.e. the spouse who should be receiving alimony), and you slept with someone else before you separated from your spouse, then the court shall not award alimony.
Yes, it is.
Basically if you are set to receive alimony but have sex with someone else before you separate from your spouse, you are not allowed to receive alimony.
The “Supporting Spouse”
In their situation, if the supporting spouse sleeps with someone else before separating, then the court must order them to pay alimony.
This isn’t nearly as punitive as the supporting spouse was going to have to pay alimony anyway.
What about if both spouses had sex outside of the marriage?
If the court finds that both spouses slept with someone outside of the marriage, then those acts basically cancel each other out and we go back to square one and the court will decide the alimony case on the merits without considering the illicit sexual behavior of either spouse.
Is there a way to get around this rule?
You are probably wondering whether there is a way to get around this rule even if you are the dependent spouse who had an affair?
Yes, but it will depend in large part on your spouse.
The statutes say that “any act of illicit sexual behavior by
either party that has been condoned by the other party shall not be considered by the court.”
Legally speaking, condone means forgiveness. So if you committed an act of illicit sexual behavior, and your spouse know about that act and forgave you for it such that you resumed your marital relationship, then your spouse condoned the behavior and whatever it is you did with whomever you did it with will not be considered by the court.
How Do You Prove that Your Spouse Forgave You?
The courts in North Carolina use a “totality of the circumstances” test to determine whether one spouse forgave the other for their illicit sexual behavior. Some of the signs that forgiveness occurred would include:
1. The innocent spouse telling the offending spouse that they forgive them; or,
2. Continuing to live with and sleep together as spouses with full knowledge of the illicit acts.
I’ve dealt with many cases where one spouse had an affair and was able to reconcile with their spouse before ultimately deciding to separate. Sometimes this occurs through marriage counseling and therapy, sometimes the couple enlists the help of a clergy member, other times they just sit down and hash it out together by themselves.
As I’ve mentioned before on this website, the best legal advice I can give to clients looking to avoid a long and messy divorce is to try to save their marriage.
But sometimes a separation and divorce is inevitable and alimony is frequently part of this equation. Here are some additional things you need to know about alimony.
How Is Alimony Affected by the Tax Cuts and Jobs Act?
If you are reading this article before the end of 2018, then alimony is still tax-deductible and taxed as income under Federal Law. However, if your alimony order or separation agreement was entered after December 31, 2018, then under the Tax Cuts and Jobs Act, your alimony will no longer be tax-deductible and you will no longer have to report the alimony you receive as taxable income.
This means that for some of you, you will want to get your alimony agreement hammered out before the end of 2018, and if you are looking to receive alimony, then you may want to wait until next year (2019).
This is because the Tax Cuts and Jobs Act eliminates the long-standing deduction for alimony in post-2018 separation agreements or court orders. In addition, if you are the recipient of alimony, you will not be required to include it in your taxable income after 2018.
How Long is Alimony in NC?
Assuming you have what would be considered an “alimony case”, how long can you expect to pay or receive alimony in NC?
There is no hard and fast rule on the duration of alimony payments, and the courts will rely heavily on the 16 factors outlined above to make a ruling on the amount and duration of alimony.
That being said, there is an unwritten rule that says that alimony in North Carolina will last for ½ of the term of the marriage. So if you were married for 10 years, then you could expect to pay or receive alimony for 5 years. If you were married 30 years, then you will pay or receive alimony for 15 years.
You will not find this rule written in any statute or case-law – but it is readily acknowledged and followed by the family law bar in many (although not necessarily all) counties throughout the state of North Carolina.
That being said, there are situations that can arise (which are anticipated by the 16 factors) which would vary the length of the alimony payment.
If you want to know what to expect in terms of and alimony payment and length of payment for your particular case, then we recommend that you contact The Hart Law Firm to schedule a divorce assessment.
When does alimony stop?
There are several situations in which alimony will automatically stop in North Carolina. The first, and most common is where the duration for the alimony payment ended.
In addition, alimony in NC will terminate upon the occurrence of one of the following events:
1. When the receiving spouse gets remarried;
2. When the receiving spouse moves in with someone in a marriage-like relationship;
3. When either spouse passes away.
The biggest conflict with these triggering events is the cohabitation trigger.
How Does Cohabitation Affect Alimony in NC?
North Carolina statutes section 50-16.9 defines cohabitation as:
“the act of two adults dwelling together continuously and habitually in a private heterosexual relationship, even if this relationship is not solemnized by marriage, or a private homosexual relationship. Cohabitation is evidenced by the voluntary mutual assumption of those marital rights, duties, and obligations which are usually manifested by married people, and which include, but are not necessarily dependent on, sexual relations.”
Although defined in the North Carolina statutes, the issue of cohabitation is one that frequently ends up in the family court because the statute is so vague that it borders on unhelpful.
The main problem with terminating alimony upon a finding of cohabitation is that the receiving spouse has every incentive to modify their behavior so as to avoid losing their monthly alimony check.
Where they may otherwise already be engaged, married, or living with someone else, they may avoid any and all of these behaviors until their alimony runs out.
And even in cases of clear cohabitation, the receiving spouse has every incentive to lie in court so as to avoid having their alimony terminated. The only way to truly prove cohabitation is through the use of a private investigator.
If you believe that your ex may be cohabitating, but you can’t prove it on your own, then you should contact us to learn more about your options.
How is alimony calculated in North Carolina?
In North Carolina, alimony is calculated according to the relative needs and ability to pay of the spouses. There is no hard and fast rule or alimony calculator in North Carolina as there is with child support.
Basically, the courts will look at how much money the supporting spouse makes and what their reasonable monthly expenses are. What they have left over after all expenses are paid is their “ability to pay”.
Next they will look to the dependent spouse and compare their income to their expenses. To the extent there is a deficit, it is considered their financial “need”.
If the supporting spouse has the ability to pay the dependent spouse’s financial need, then that is a good starting place to determine the amount of the alimony payment.
However, we frequently see spouses on both sides over-inflate their expenses so as to show a higher need than reasonable and a decreased ability to pay. In these cases, we will look to what the marital standard of living was to see what a normal pattern of spending should be.
If one spouse begins spending significantly more money after the separation than they did as a married couple, it will send a signal that their expenses may be over-inflated.
When conducting this analysis of income and expenses, we frequently end up in situations where the ability to pay is not nearly enough to cover the financial need of the dependent spouse – perhaps because both spouses are inflating their reasonable expenses.
As you can see, calculating a proper amount of alimony is more of an art than a science. If you are not sure whether the amount your spouse is requesting is correct, or if you aren’t sure how much alimony you should request, then we highly recommend that you contact our firm to go over this analysis with you in a confidential divorce assessment.
Agreeing to an alimony payment that is too high or too low can have a substantial effect on your future financial prospects.
Why Hiring a Lawyer to Negotiate Alimony in NC Makes Smart Financial Sense
Most people think that small changes in the amount of alimony they are paying or receiving don’t matter that much. But the numbers tell a different story.
Why a Dependent Spouse needs a Lawyer to Negotiate Alimony in North Carolina
Let’s consider two examples to show how hiring a lawyer can be financially profitable to a dependent spouse.
In both examples the supporting spouse earns approximately $125,000 per year, not uncommon for wage-earners in the Triangle, and perhaps a bit on the low side.
The dependent spouse stays at home with the kids and has no income.
The couple has been married for 10 years.
In the first example, the dependent spouse decides that they cannot afford the $5,000 to $10,000 they will need to hire a lawyer to negotiate their alimony payment. They decide to find a job paying approximately $24,000 per year for part-time work ($2,000 per month) and agree to an alimony payment of $1,000 per month, figuring that they can make do on $3,000 per month plus child support.
Since they were married 10 years, that alimony payment will last 5 years in North Carolina and will pay the dependent spouse a total of $60,000.
In a similar situation, the dependent spouse decides to hire a lawyer and determines that instead of returning to work, they could negotiate somewhere between $3,500 to $4,000 per month in alimony, AND they can ask for reimbursement of their attorneys fees. Over the same five years, they can take the time they need to improve their work skills and line up a job paying them closer to $60,000 at approximately the same time that their alimony terminates.
In this second situation, they would receive between $210,000 and $240,000 over five years, and have a much better job waiting for them after alimony terminated.
Why a Supporting Spouse Needs a Lawyer to Negotiate Alimony in North Carolina
In this next example, lets look at why the supporting spouse should consider hiring a lawyer to negotiate their alimony payment.
Once again, we have the same facts as above. The supporting spouse earns approximately $125,000 per year and the dependent spouse does not work outside the home. You have been offered a payment of $5,000 per month for 10 years. Over the life of the alimony payment, this amounts to $600,000.
Assume you are able to negotiate that payment down to a more reasonable $3,500 per month. However, your spouse insists on receiving payments for the same period of time as your marriage. You reluctantly agree.
This means that you will pay out approximately $420,000 over the course of 10 years.
You may have noticed that the length of the payment here is significantly different from the standard previously referenced of ½ the term of the marriage. Without legal counsel, you may not fully understand this and may be inclined to agree to the payment for the full 10 years.
On the other hand, if you had hired a lawyer to help negotiate your alimony payment, they would have insisted on a 5 year duration for the payment, saving you approximately $210,000 and additional 5 years of payments.
First Steps to Hire a Lawyer to Negotiate Alimony in NC
As you can see, hiring a lawyer to assist in the negotiation of your alimony payment, whether you are paying alimony or receiving alimony, is a smart decision. The difference in even a couple hundred dollars over the course of several years is more than enough to cover the cost of hiring legal counsel.
The biggest problem most people face in negotiating an appropriate alimony payment is that they don’t know what is a reasonable amount or length of payment. We’ve seen countless people come to see us who were accepting far less as a payment than they should, or who were considering paying far more than they otherwise should.
Having an advocate in your corner to help you navigate the issue of alimony is typically money well spent.