Colorado Spousal Support & Alimony

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Determining spousal support or alimony (a.k.a. maintenance) in a Colorado divorce is not simply about plugging numbers into a spreadsheet and applying a formula. There is a significant amount of Colorado case law that opens up strategic arguments for each case involving maintenance. Ryan, Amy, Georgina and Michael have represented less affluent clients seeking support to help them meet their needs. They have also advised clients who are concerned with limiting their financial exposure on a monthly alimony obligation that can add up over time.

As a team, Ryan, Amy, Georgina and Michael leverage cutting-edge software to analyze the financial issues involved in a case where maintenance is involved. For example, they can calculate the tax effects of maintenance/alimony, budgets depending on inflation or investment returns and provide detailed reports with various scenarios so their clients can intelligently decide if they should settle or go to trial.

Colorado’s Maintenance Guidelines

Historically, judges were allowed a tremendous amount of discretion when considering permanent alimony in a Colorado divorce. Such latitude resulted in unpredictability. The amount and length of maintenance awarded by a judge would seemingly hinge on an arbitrary factor such as the likability of a party. The result was a political push towards a system where maintenance allocations are easier to predict. The Alimony Reform Act of 2011 in Massachusetts was used as a model. After a number of failed attempts using various formulas and language on how a court should apply the formulas, the Colorado General Assembly finally settled on the “advisory guidelines” of House Bill 13-1058 in 2014. These guidelines were updated in 2018 with House Bill 18-1385 due to the change in the tax treatment for maintenance.

The law contains two significant formulas. The first deals with the maintenance term. There are different policy reasons for alimony in a Colorado divorce. One concept is “reimbursement” to compensate a spouse for supporting the other while in school or start-up phase of a business. Another reason may be “transitional support” to assist someone like a stay-at-home mother as they reenter the workforce. Colorado’s new maintenance law deals with these concepts in a rigid manner by simply providing a table for the suggested length of maintenance depending on the length of marriage. For example, a 3-year marriage results in a proposed maintenance term of 11 months, or 31% as long as the marriage. In contrast, a marriage of 13 years results in a suggested term of 6.5 years, or a maintenance award 50% as long as the marriage.

The second formula applies to the amount of maintenance. Colorado’s law on permanent spousal support is generally calculated as follows:

40% of parties’ combined adjusted gross income LESS 40% of lower income party’s adjusted gross income

If the calculation results in a negative number, the amount of maintenance is zero.

Combined Income Over $240,000 & Factors Affecting Maintenance

According to the most recent update in 2018 to the Colorado law on spousal maintenance, if the parties’ adjusted gross income exceeds $240,000, the guideline amount does not apply. Instead, the trial court is supposed to consider the various factors outlined below. These factors have been addressed in more detail through various historical case opinions.

  1. The financial resources of the recipient spouse, including the actual or potential income from separate or marital property or any other source and the ability of the recipient spouse to meet his or her needs independently;
  2. The financial resources of the payor spouse, including the actual or potential income from separate or marital property or any other source and the ability of the payor spouse to meet his or her reasonable needs while paying maintenance;
  3. The lifestyle during the marriage;
  4. The distribution of marital property, including whether additional marital property may be awarded to reduce or alleviate the need for maintenance;
  5. Both parties’ income, employment, and employability, obtainable through reasonable diligence and additional training or education, if necessary, and any necessary reduction in employment due to the needs of an unemancipated child of the marriage or the circumstances of the parties;
  6. Whether one party has historically earned higher or lower income than the income reflected at the time of permanent orders and the duration and consistency of income from overtime or secondary employment;
  7. The duration of the marriage;
  8. The amount of temporary maintenance and the number of months that temporary maintenance was paid to the recipient spouse;
  9. The age and health of the parties, including consideration of significant health care needs or uninsured or unreimbursed health care expenses;
  10. Significant economic or noneconomic contribution to the marriage or to the economic, educational, or occupational advancement of a party, including but not limited to completing an education or job training, payment by one spouse of the other spouse’s separate debts, or enhancement of the other spouse’s personal or real property;
  11. Whether the circumstances of the parties at the time of permanent orders warrant the award of a nominal amount of maintenance in order to preserve a claim of maintenance in the future;
  12. Whether the maintenance is deductible for federal income tax purposes by the payor and taxable income to the recipient, and any adjustments to the amount of maintenance to equitably allocate the tax burden between the parties; and
  13. Any other factor that the court deems relevant.

When Does the Court Award Maintenance in a Divorce?

Before a court even gets into the Colorado spousal maintenance (alimony) guidelines, a threshold test is applied. There are two prongs of the “threshold test” under C.R.S. 14-10-114.

Sufficient Property

First, the court must find that a spouse lacks sufficient property to provide for his or her reasonable needs. This means that a court must divide property in the divorce before turning to the issue of maintenance. If a spouse is awarded an income-producing asset, such as a rental property, they are less likely to need maintenance/alimony from the other party. However, a spouse is not required to sell or consume property awarded to them before being entitled to maintenance.

What does “reasonable needs” mean? It depends on the particular circumstances of each case – an inherently squishy and debatable concept. The standard of living established during the marriage is a relevant factor. A marriage where frequent travel and fine-dining were enjoyed is different than a spartan one. The reasonable needs will be based on the present circumstances at the time of the hearing rather than the past or future conditions.

Spousal maintenance is to provide the means to obtain food, clothing, habitation and other necessities. Colorado courts have taken a fairly expansive view of “reasonable needs,” and stated that it does not mean the minimum requirements to sustain life. Nevertheless, a court is not required to ensure spouses have an equal lifestyle forever.

The totality of the parties’ financial circumstances will also be considered. If a spouse is the beneficiary of a trust, that may be considered even though the trust is not “property” under Colorado law. The reasoning behind this rule is easy to understand – a party doesn’t need maintenance/alimony if they’ll be perfectly fine on their own.

Appropriate Employment

If property awarded to a spouse is insufficient to provide for their reasonable needs, the court will move on to the second part of the threshold test: employment. A person won’t need maintenance/alimony if he or she can support themselves on their own. Again, each case is different.

The court will determine what is “appropriate employment” for a spouse requesting an award of maintenance. The expectations and intentions established during the marriage will be considered along with the age, education, work history, health and of the requesting spouse. A court will also take into account if a person is voluntarily underemployed or completely unemployed. A famous Colorado divorce case (In re the Marriage of Elmer) involved an attorney that voluntarily quit practicing law and decided to pick apples at $10/hour. The court imputed income to that party based on his higher earning capacity.

Maintenance/alimony is inherently dependent on income. To read more about what “income” means in calculating spousal support, click here.