Numerous states have set formulas for calculating alimony (aka spousal maintenance). However, unlike child support, Minnesota does not have a spousal maintenance formula.
Generally speaking, in Minnesota, alimony is calculated by balancing a spouse’s ability to pay versus the reasonable needs of the spouse requesting spousal maintenance. Additionally, the Court must analyze and balance the following factors:
- the financial resources of the party seeking maintenance, including marital property apportioned to the party, and the party’s ability to meet needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
- the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, and the probability, given the party’s age and skills, of completing education or training and becoming fully or partially self-supporting;
- the standard of living established during the marriage;
- the duration of the marriage and, in the case of a homemaker, the length of absence from employment and the extent to which any education, skills, or experience have become outmoded and earning capacity has become permanently diminished;
- the loss of earnings, seniority, retirement benefits, and other employment opportunities forgone by the spouse seeking spousal maintenance;
- the age, and the physical and emotional condition of the spouse seeking maintenance;
- the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance; and
- the contribution of each party in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker or in furtherance of the other party’s employment or business.
In some cases, parties and/or attorneys will hire financial experts who will assist in preparing cash flow analyses which would identify the tax consequences for a theoretical spousal maintenance award. The cash flow analyses also take into consideration other deductions such as mortgage interest, real estate taxes, and child dependency exemptions. Cash flows are typically prepared to identify the amount of spousal maintenance needed to satisfy a budget or in some cases, to “equalize” the net, after-tax cash flow of the parties. It is important to note that the purpose of a cash flow analysis is to determine several hypotheticals, both from the person from whom the spousal maintenance is being sought and the spouse who will pay the spousal maintenance. The four (4) elements that are extremely important and are oftentimes subject to litigation are the 1) obligor’s income; 2) obligee’s income; 3) obligor’s monthly living expenses; and 4) obligee’s monthly living expenses. The cash flow analysis attempts to balance and advocate for these four assertions by each spouse.
Calculating alimony in Minnesota varies from case to case depending on the facts of each case. Maintenance can be temporary or permanent. Sometimes, both spouses can negotiate a private agreement which waives spousal maintenance in consideration of other monetary payments. Negotiating spousal maintenance requires a great deal of competence and experience as it can have long-lasting financial impact on both parties.
Courts have broad discretion in determining the amount and duration of a spousal maintenance award. While one judge may order that a spouse should receive a permanent spousal maintenance award, another judge may believe that a spousal maintenance award is unwarranted, even with the same facts presented. This is why it is important to engage an attorney experienced and competent in all aspects of spousal maintenance.