How is Alimony Calculated?

Alimony is more commonly termed “spousal maintenance” in Colorado.

It is the money that can be awarded to one of the spouses in a legal separation or divorce and it is intended to provide support during the transition from married life to single life.

Spousal maintenance payments are seen by the Colorado family law system as a way to reduce the potential financial hardship for spouses due to separation or divorce.

The amount and duration of spousal maintenance are key decisions that need to be made in divorce settlements. It is not always necessary but is frequently a major point of contention between divorcing parties.

How is alimony determined and how are the amounts calculated in Colorado?

In any divorce or legal separation, the Colorado courts want to see that the needs of both adults, as well as the children, are cared for after separation.

The statute relating to spousal maintenance is C.R.S. 14-10-114. It recognizes that:

(I) The economic lives of spouses are frequently closely intertwined in marriage and that it is often impossible to later segregate the respective decisions and contributions of the spouses; and

(II) Consequently, awarding spousal maintenance may be appropriate if a spouse needs support and the other spouse has the ability to pay support.

So, if divorce or separation is going to leave one of the partners financially handicapped or living a life that they are not accustomed to, spousal maintenance can ensure that the potential hardship is mitigated.

Regular alimony payments help ensure that both partners receive a reasonable amount of money to live and establish independence following the divorce.

How spousal maintenance is awarded in Colorado

However, in order for spousal maintenance to be awarded, one of the spouses must request it. It is not an automatic provision of a divorce settlement so it is usually requested by the lawyer representing one of the spouses.

Once it is determined that support is due, a family law judge will decide how much this should be, when it is paid, and for how long it must be paid.

Note that maintenance payments can be ordered both while the divorce case is pending and for a specific period or indefinitely after the divorce decree is finalized.

According to the statute C.R.S. 14-10-114, the judge will base the decision upon:

(A) The amount of each party’s gross income;

(B) The marital property apportioned to each party;

(C) The financial resources of each party, including but not limited to the actual or potential income from separate or marital property;

(D) Reasonable financial need as established during the marriage; and

(E) Whether maintenance awarded pursuant to this section would be deductible for federal income tax purposes by the payor and taxable income to the recipient.

The court’s decision will also be influenced by any significant contributions that one spouse has made to the marriage, including payment of debts and non-economic contributions such as looking after the children or undergoing job training.

Alimony formula 

The amount of spousal maintenance due is based on a mathematical formula included in the statute C.R.S. 14-10-114 in 2014. It was introduced to make alimony simpler, more consistent, and less contentious.

However, judges are only asked to consider this formula. It is not mandatory.

The maintenance formula works as follows:

1. Calculate 40% of the higher income earning party’s gross monthly income 
2. Calculate 50% of the lower-income earning party’s gross monthly income
3. Subtract the 50% figure from the 40% figure

Provided this is a positive figure, the calculation continues. The recipient of alimony is entitled to up to 40% of the combined adjusted gross income of the parties.

However, a “statutory adjustment” needs to be made to arrive at a final figure for spousal maintenance payments, which is best illustrated with an example.

Spousal maintenance example

• Jill makes $10,000 per month. 40% of her income is $4,000 
• John makes $5,000 per month. 50% of his income is $2,500
• Subtracting $2,500 from $4,000 leaves $1,500 per month

This is a positive figure so we must continue by determining what 40% of the combined gross income is:

• $15,000 x 0.40 = $6,000

Under this scenario, John is entitled to $1,000 in monthly maintenance pursuant to the guidelines:

• $5,000 income + $1,000 in maintenance = $6,000 (which is 40% of the combined income)

So, the statutory adjustment reduces the amount of alimony to $1,000 per month from $1,500, which was the original figure we had above.

This is a simple example that applies to all marriages where:

• The couple’s combined annual gross earnings are $360,000 or less;
• The marriage lasted more than three years; and
• The marriage lasted less than 20 years.

For marriages that last more than 20 years or involve higher combined incomes than $360,000, the court will exercise more discretion with their decision rather than using the formula as a guideline.

The skills of your divorce lawyer really come to the fore here, as the judge will make his or her decision based on the strength of the argument and the evidence presented.

Duration of alimony payments

The duration of alimony payments depends largely on the duration of the marriage. It could be for a matter of months or for an  indefinite period of time.

Generally, for a marriage of three years, the duration of alimony is 11 months. For a marriage lasting 20 years, alimony is normally payable for around 10 years, according to the provisions of the statute.

However, the judge can again exert discretion, including making a spousal maintenance order applicable until the death or remarriage of the recipient.

Need help with spousal maintenance?

Even though there are statutory guidelines in Colorado for the payment of spousal maintenance, strict adherence to the guideline amount is not required and Judges have a great deal of discretion in this area when determining the amount and the term of spousal maintenance. 

So, it is rarely a simple case of punching numbers into a formula.

The amount of alimony is often a point of dispute between spouses. Factors such as recent redundancy, consideration of earning potential or employability/non-employability, and the age and health status of both spouses may need to be considered.

The judge will treat each case individually and there is plenty of room for discretion.

If you’re concerned about your rights to alimony, submit a free case evaluation or give us a call at 720.594.7360.