By Brian Starr, attorney at law
When preparing pre-nuptial agreements, our clients are sometimes uncertain as to the amount of spousal support (or “alimony”) to offer or request. A lot of uncertainty exists in this area of law because alimony awards are one of the most unpredictable and uncertain aspects of a divorce case. To eliminate this uncertainty, we always recommend that our clients fix the amount of alimony in the pre-nuptial agreement. Our clients can rest easier, knowing that in the case of divorce the amount of alimony will not be left to the whims of a future judge.
Inevitably, our clients ask us the following question, “if I do not include a fixed alimony amount in the pre-nuptial agreement, how much in alimony will a judge order me to pay/receive?” The answer to this reasonable question is not so simple.
In the absence of a prenuptial agreement, Arizona judges rely on the provisions of A.R.S. § 25-319 to determine alimony. A.R.S. § 25-319 is actually a two part statute. First, the court must find that the spouse requesting alimony is entitled to alimony before calculating an amount and duration. The requesting spouse’s entitlement to alimony is greatly negated by the actual income or income potential of the requesting spouse, despite the other spouse’s income. Therefore, if the requesting spouse is self-sufficient, the requesting spouse should not even be awarded alimony. But if the judge does wish to award alimony, A.R.S. §25-319 goes on to provide thirteen factors that the judge should look at to determine an amount and duration. A few of the more obvious factors are the duration of the marriage, age and employability of the Requesting Spouse.
Such abstract factors have led to a great deviation among alimony awards for cases with similar facts. For that reason, about seven years ago, the court created the following formula to calculate the amount of alimony to award the requesting spouse:
(0.015) x (years of marriage) x (monthly difference in income) = monthly spousal support
This formula provided judges and spouses at least some guideline of possible ranges of alimony. Unfortunately, this formula is no longer “officially” being used by Arizona judges to make their alimony awards. However, it is worthwhile to consult this formula in deciding upon an alimony amount to offer/request.
To put this formula to the test, lets imagine a couple that is divorcing after five years of marriage; where Spouse 1 makes $240,000.00 per year ($20,000.00 per month) and Spouse 2 makes $60,000.00 ($5,000.00 per month). Plugging these numbers into the formula yields a monthly alimony award of $1,125.00.
(0.015) x (5 years of marriage) x ($15,000.00 monthly difference in income) = $1,125.00 per month.
The duration of alimony payments also relies on a commonly used, but not mandatory formula. Alimony awards typically are awarded for 30% to 50% of the length of the marriage, 18 to 30 months in the above example.
Again, these formulas are not “official”. A judge could award higher or lower amounts of alimony. These formulas merely provide an estimate of potential alimony awards, which then allow the spouses to decide upon a fixed alimony award in the pre-nuptial agreement.
In the example above, the judge may not award Spouse 2 any alimony because Spouse 2’s income is above-average ($60,000.00), even though it is considerably less than Spouse 1’s income.
Both parties to a pre-nuptial agreement should be represented by separate attorneys. Hiring separate attorneys allows both parties to receive advice for their particular concerns. Also, hiring separate counsel greatly increases the likelihood that a pre-nuptial agreement will be actually enforced.
Starr Law Firm, PLC would like to help draft or review your pre-nuptial agreement. With considerable experience in estate planning, we will also ensure that your pre-nuptial agreement complements your overall estate plan. Feel free to contact us at 602-639-4618 to schedule a consultation about your pre-nuptial agreement or estate planning needs.
Disclaimer: The information contained in this article is made available for general informational purposes only, and is not intended to constitute specific legal advice or to be a substitute for advice from qualified counsel. For that reason, you should not act or refrain from acting based on any information in this article without first obtaining advice from professional counsel qualified in the applicable subject matter and jurisdictions.