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Wednesday, June 29, 2016

Spousal Maintenance In Texas—Are You Entitled To It?

Are you experiencing financial difficulty during or following your divorce action?  Under the Texas Family Code, spousal maintenance is awarded when one spouse cannot provide for their own needs post-divorce or during the pending matrimonial case.  The requesting spouse must make a showing to the court that he or she has attempted to acquire financial stability during the divorce action

In addition to a spouse’s ability to be fiscally self-sufficient, courts consider several factors in determining whether a spouse is entitled to spousal maintenance.  This may include the partners’ economic resources, pre-existing child support obligations, education or other proficiencies and skills, and health status, such as a disability that stops a spouse from gaining or maintaining employment.

Read more . . .

Monday, June 27, 2016

Texas Court Says Divorced Spouse Can Keep Receiving Alimony Despite Long-Term Cohabitation

When does "living together" constitute common law marriage resulting in an end to alimony payments?

When a divorced spouse who receives alimony remarries, the alimony payments are expected to come to an end. Indeed, for the ex- paying the alimony, the remarriage of a former spouse may be a fond hope.

But what if the spouse does not formally remarry and simply cohabits with another person? Is this an "informal marriage" or "common law marriage" that ends the obligation to make alimony payments? In a recent case in Dallas, Texas, the answer was "no."

A Sharply Divided Court Allows Alimony to Continue

The case involved a couple who had been divorced since 1997.

Read more . . .

Monday, February 22, 2016

Alimony Changes When the Receiving Spouse Cohabits with Another

How is alimony affected by the cohabitation of the spouse receiving it?

Divorce is difficult under any circumstances, usually involving financial, as well as emotional, stress. In recent years, when many spouses are both working outside the home, alimony may not be part of the divorce agreement, or may be paid by either spouse to the other, regardless of gender, depending on income levels. How long alimony will be paid is variable.

The Terms of the Divorce Agreement Usually Determine When Alimony Ends



When the divorce is finalized, even if alimony is to be paid for an extended period, it typically is stipulated to terminate if the receiving spouse remarries, unless the original court document states otherwise. In some states, however, there are judges who, under certain circumstances, have the discretion to decide that alimony will continue after the receiving spouse remarries.

Does alimony stop if the recipient cohabits with another partner rather than remarrying?

Whether alimony will be terminated or reduced depends on where in the U.S. you reside and under the particular circumstances of your marriage and divorce. The following variations are possible:

  • In most states, alimony will be terminated or reduced only if cohabitation alters the recipient's need for economic support
  • Other states, however, will terminate alimony regardless of economic need once cohabitation occurs
  • In still other states, cohabitation will have no effect on alimony

Examples of Differences in Alimony Laws from One State to Another

In New York, alimony will only be terminated if the recipient not only lives with another, but also considers herself or himself to be a spouse of the other party. Since very few recipients are willing to do this if it means losing money, alimony is rarely terminated in New York.

In Illinois, on the other hand, a relatively recent ruling viewed a couple as cohabiting since they were intimate, sexually and otherwise, on an ongoing basis, even though the recipient's significant other lived in a separate residence.

In Arkansas, alimony cannot be terminated unless the cohabiting couple has a child together!

In Tennessee and California, it is assumed that the recipient's need for financial support is reduced or eliminated once he or she begins a relationship of cohabitation, so, unless the recipient can prove otherwise, alimony payments will be reduced or terminated.

In Texas, courts only award alimony if: [1] the marriage lasted for at least 10 years [2] one parent must care for a disabled child and therefore can't work or [3] the paying spouse has committed domestic abuse within two years of the divorce. In addition, in determining the length of time for which alimony must be paid, the court will consider each spouse's education, employment skills, age and health, and the duration of the marriage.

In states in which there are no specific laws to address the effect of cohabitation on alimony, the judge's ruling is difficult to predict. No matter what the state law is, however, if your particular divorce agreement stipulates what will occur if the receiving spouse becomes involved in a relationship of cohabitation, your agreement will remain legally binding.

In all situations, the onus is on the person requesting an alteration of alimony arrangements to prove that the ex-spouse's financial situation has significantly improved. If you are in the midst of setting up a divorce agreement to cover such situations, or if you are already enmeshed in a conflict in regard to alimony and cohabitation, it is essential that you contact an experienced family law attorney to vigorously defend your rights.

Wednesday, October 28, 2015

Basics of Spousal Maintenance in Texas: How Much & How Long?

Must I keep paying spousal support after my ex gets remarried?

Spousal support is a component of many Texas divorces, and is designed to ensure that neither spouse experiences significant financial hardship nor impoverishment in the months or years following the dissolution of the marriage. Historically, one spouse had served in the primary “breadwinning” role while the other tended mostly to domestic matters, childrearing and homemaking. In the event of a divorce in this situation, the homemaker spouse often experienced an inability to find gainful employment – prompting the advent of spousal support laws to ensure that divorce did not necessarily lead to financial ruin to the spouse unprepared for the job market.

In Texas, a court may order spousal maintenance only if the “spouse seeking maintenance will lack sufficient property… to provide for the spouse's minimum reasonable needs.” Moreover, the court must find that the spouse seeking maintenance also fits into one of the following categories:

  • Has been a victim of domestic violence at some point during the marriage
  • Has a physical or mental handicap making self-support impossible or unduly burdensome
  • Has been in the marriage for at least 10 years and “lacks the ability to earn sufficient income to provide for the [his or her] minimum reasonable needs”
  • Is the primary custodian of a child of the marriage who needs continual care due to a mental or physical handicap

In most instances, spousal support does not last forever. Undoubtedly, the recipient spouse foregoes the right to support upon remarriage – and, possibly, cohabitation in a subsequent romantic relationship. In many cases, a divorce decree will specify a definite length of time for support payments, and will generally require the recipient to make reasonable efforts to secure a regular income.

Thursday, June 11, 2015

U.S. Tax Court Rules Against Texas Payor in Complex Alimony Deduction Case

How are alimony payments treated from a tax perspective? 

For payors of alimony, there may be special tax considerations applicable to the monthly payments mandated by court order. As a general principle, alimony payments are deductible from the payor’s annual income provided several conditions are met, including: 

• The payments are mandated by court order or provided for in a written separation agreement;
• Spouses are not filing a joint tax return;
• The payor pays in cash directly to the other spouse;
• Liability to continue payments ceases upon the death of the recipient; and
• The payment is not considered a child support payment or property settlement agreement.

Moreover, non-deductible support payments include voluntary gifts/support, payments allocated to keep up the recipient’s property, and any noncash asset transfers. 

Tax court considers deductibility of wages garnished after death of recipient 

In May, 2015, the U.S. Tax Court considered a dispute between the IRS and an individual taxpayer regarding the deductibility of alimony payments that were being automatically withheld from obligor’s wages each pay period. Under typical circumstances, this arrangement would be considered a valid method for providing support and would be undoubtedly deductible from the payor’s annual adjusted gross income. 

However, in this case, the wage garnishment took place as a result of a state-sanctioned action for support arrears, and the obligor owed over $64,000 in back alimony payments. Accordingly, he was set up on a payment plan wherein the amount would be steadily deducted over time until the debt was repaid. Contrary to the IRS’s requirements, the terms of the payment plan did not allow for a suspension of liability upon the death of the recipient, and accordingly did not meet the criteria for deductibility described above. Consequently, the entirety of the obligor’s payments will not be deductible on his tax return, and the payments will continue even in the event of the recipient’s death. 

If you have a question about alimony or the tax consequences of divorce, please do not hesitate to contact the Austin, Texas divorce attorneys at Stinson Moyle right away! You can reach us by calling 512-320-9070 today. 

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