As opposed to spousal maintenance, which can only be ordered by a judge after a trial has occurred, contractual alimony is a form of post-divorce spousal support that can be agreed to before a trial by you and your spouse. Voluntarily agreeing to pay support can be done according to the terms that you all settle upon their negotiation. Specifically- how long it will last, how much is to be paid, how often the payments are to be made as well as what can eliminate the future responsibility for its payment. Many spouses who wish to receive the spousal support will negotiate for life insurance benefits or other protections to be in place should the payor of the support pass away unexpectedly.
Unlike spousal maintenance, there are no eligibility rules as far as who qualifies to receive the support. This is purely optional and voluntarily on behalf of you and your spouse. Typically we see these type of agreements come into play when there is a relatively small amount of community income to divide for the spouse who has lesser future income potential. If between community property and separate property you believe that you will be in a position after your divorce where you will be unable to meet your minimum reasonable needs (at least at first) then you may want to consider negotiating for contractual alimony with your spouse.
Issues regarding housing and contractual alimony
If you are going to be the primary conservator of your children but have spent the majority of your married life as a homemaker then you may have concerns (rightfully so) about how you are going to care for your family in your post-divorce life. You’ve started looking for jobs but the amount of money you expect to make is insufficient to stay in your home and would be barely enough to afford an apartment close to where you all are currently living. What are your options?
I have seen some clients, both our own and opposing clients, negotiate contractual alimony in order to remain in their home at least until they can find better paying work or attend classes to catch up on certifications or training that may be needed. In addition, contractual alimony may allow a person to be able to have enough cash to refinance a home mortgage in order to remove their spouse’s name from any future liability on the home. If this can be done there is no need to have a deed of trust to secure assumption signed off on by the spouse remaining in the home. The ability to remain in the family home when you have children, to be more comfortable in paying the expenses associated with that home and to provide for your family’s changing needs in the aftermath of a divorce are all positives.
At what point does contractual alimony actually stop?
Not surprisingly, contractual alimony’s need to be paid comes to an end if the paying or receiving spouse dies. Note that contractual alimony does not have the same protections afforded to the payor as does spousal maintenance that is court ordered. For example, there are limits to how long spousal maintenance can be paid- usually ending at ten years. There is no such protection afforded to folks who agree to pay contractual alimony.
Interestingly, if you agree with your spouse to pay him or her contractual alimony you need to be sure that there is language inserted into your final decree of divorce that states in the event that your spouse remarries that you are no longer on the hook for paying alimony. Spousal maintenance automatically ends when your spouse remarries but the same cannot be said for contractual alimony.
How do you ensure that the terms of your agreement are followed after the divorce is over?
The rules of contract law apply to contractual alimony (not surprisingly, given its name). As I mentioned in the section previous to this one, the family code’s laws pertaining to spousal maintenance do not apply to contractual alimony as far as enforceability of the agreement is concerned. If your spouse fails to pay you the alimony as agreed to previously he or she cannot be held in contempt of court for violating that order. The most severe punishments available- fines and jail time- are not on the table as a consequence for violating the divorce decree in this regard.
The biggest, in my opinion, thing to note when it comes to contract alimony and its enforceability by a family law court is that if you negotiate for a term of “perpetual” contractual alimony and your ex-spouse decides to stop paying for one reason or another you cannot ask a court to enforce the order for its originally stated length of time. A court can only enforce the alimony to be paid for the same length of time that it would have ordered spousal maintenance to be paid. This could end up costing you thousands of dollars when it is all said and done.
What to do if you are seeking contractual alimony in your divorce case?
Keep in mind that if you want to be able to walk away from your divorce with an assurance that you will be paid contractual alimony you will need to convince your spouse that it needs to be paid. This means that you cannot browbeat your spouse or “push” him or her too hard. You ought to know what your family’s financial circumstances look like so you can come in and make a reasonable offer to receive some degree of alimony. If you come in with incomplete knowledge of what your finances look like your spouse may be put off by your over-aggressive negotiation tactics. If you are rejected in your attempts to be paid contractual alimony you will have to run your request by a judge in your trial. We have already seen from the past few blogs written on this subject that it is not easy to win an award of spousal maintenance.
What happens when you make an over-aggressive move in order to negotiate for contractual alimony is that your spouse will now be on the defensive and will be more suspicious of your motives. Do not be surprised if, after you make an unrealistic offer for alimony payments, that your spouse is now more protective of what he or she believes to be their portion of your community estate. This can lengthen your case severely and if nothing else create an atmosphere that is not suited to full disclosure of information and healthy negotiation.
I would suggest that you and your spouse make a commitment early on in your divorce to being as transparent as possible when it comes to sharing information relevant to finances. There is no sense in trying to hide the ball at this juncture. The better information is shared the more likely each side is to trust the other and find their arguments to be credible. Even a relatively small gesture to voluntarily share information can go a long way towards helping you accomplish your goals.
Finally, you need to understand that asking for contractual alimony is a request that comes with assumptions about your motives, willingness to work and ability to provide for your children and/or yourself after your divorce. Again, transparency is key- if your spouse understands your intentions and motivations, he or she will be less likely to assume the worst of you.
Questions about divorce, spousal maintenance or contractual alimony? Contact the Law Office of Bryan Fagan, PLLC today
The attorneys and staff with the Law Office of Bryan Fagan, PLLC appreciate your time and consideration of this issue. We have spent the past few days trying to share some of our knowledge and experiences with you all and hope you have learned something valuable and helpful. If you find yourself with any questions on this subject please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. We offer free of charge consultations six days a week with one of our licensed family law attorneys.