Spousal Support in Virginia
Know your rights, and protect your financial well-being in divorce
|Written by Tom Yeung, CFA | CDFA|
Investment Advisor & Fund Manager, Jurnex Financial Advisors
When couples divorce in Virginia, the courts will often order spousal support to be paid to the lower earner. Here are the details you need to know.
Spousal support (also known as alimony) gets paid when a significant difference exists between a couple’s income. According to Virginia Code § 20-107.1, courts generally award spousal support if not doing so would “constitute a manifest injustice.”
However, the specific laws covering spousal support in Virginia are complex. Unlike child support, spousal support in Virginia has no set guidelines. Instead, the courts will base decisions on many contributing factors.
And because spousal support laws in Virginia are so involved, I highly recommend you reach out to a qualified financial professional for advice. That’s because there’s little more important than maintaining financial independence for you and your loved ones.
Spousal support guidelines of Virginia
Spousal support in Virginia gets paid when two key factors are met between the couple:
1. Income. A large difference in earnings.
2. Marriage length. A significant amount of time married.
The exact amount received will depend on a number of different factors listed later in this article.
Note that the amount of spousal support paid is independent of child support. In other words, you’ll receive the spousal support regardless of how much child support gets paid. This rule is designed to protect both the recipient and the children’s income.
Reasons for withholding spousal support
In Virginia, the courts can deny spousal support under Code § 20-91 for:
1. Adultery. Infidelity or other sexual relationship outside marriage
2. Felony. Convicted felons sentenced for more than a full year
3. Domestic abuse. Cruelty or other physical bodily harm
4. Abandonment. When both parties live separately for at least a year.
If you believe you’ve been the victim of any of these acts, there’s a good chance you won’t have to pay spousal support.
How is spousal support calculated?
According to Virginia Code § 20-107.1, the courts will consider 13 distinct areas when awarding spousal support.
- Financial obligations and resources. Income from pensions, profit sharing, and retirement plans
- Standard of living. The quality of life established during the marriage
- Marriage duration. The number of years married.
- Age and condition of each party. The physical and mental state of each party
- Employability. The ability to work, based on age, physical and psychological condition
- Contributions. Past monetary and nonmonetary input made toward the wellbeing of the family
- Property ownership. Real and personal, tangible, and intangible assets.
- Provisions. Particular factors behind assets and debts
- Earnings capacity. Employment opportunities of each party
- Education. Time and costs involved to acquire the skills needed
- Life situation. Decisions made by either party regarding employment or parenting that affected earning potential
- Education contributions. Extent either party has contributed to the education of the other
- Other factors. Tax consequences and other circumstances
In the State of Virginia, the courts can also award temporary spousal support (also known as Pendente Lite). However, courts only award Pendente Lite during the separation phase. It ceases once the final separation occurs. Also, temporary support only gets paid when combined monthly income is less than $10,000. The formula works as follows according to Code § 16.1-278.17:1
- With minor children: (Payor monthly income) x 28% – (Spouse monthly income) x 58%
- Without minor children: (Payor monthly income) x 30% – (Spouse monthly income) x 50%
Courts may also deviate from the guidelines, given good cause.
Limitations of Pendente Lite
Pendente Lite is only a stop-gap measure during a divorce. All payments stop once the final separation occurs, usually 6-18 months after the initiation of the divorce.
Occasionally, some Virginia courts will use Pendente Lite guidelines as a starting point for calculating spousal support. However, final amounts usually vary significantly because of the number of other factors considered.
How much spousal support will you receive?
In general, spousal support payments allow both spouses to maintain a reasonable pre-divorce lifestyle. That’s because Virginia State Courts generally avoid “trapping” spouses in relationships due to money.
However, spousal support today rarely replaces 100% of income.
In years past, a stay-at-home parent (typically the wife) might have never been expected to rejoin the workforce. Spousal support could last clear into retirement. These days, women and men alike are expected to rejoin the workforce to supplement spousal support payments.
Example 1: Stay-at-home Mother (age 50), married for 20 years, and raising a 16-year-old child.
Spousal support might continue for ten years but decline over time after the child leaves for college. The mother would be expected to re-tool and rejoin the workforce, even if her wages were lower than they might have been if she hadn’t been a stay-at-home parent.
Example 2: Grandmother (age 75), married for 40 years.
There’s a good chance of no spousal support if both parties are retired. However, the grandmother should remain eligible for her spouse’s retirement benefits.
Because spousal support in Virginia gets decided on a case-by-case basis, it’s generally advisable to reach out to a divorce financial advisor to get a better sense of your situation.
How is spousal support paid?
Payees of spousal support in Virginia can do so in three ways.
- Periodic payment. Often done monthly, but always for a defined duration. Payment periods are usually 50% of the length of the marriage but can be more.
- Lump-sum award. A one-time payment to compensate the lower-earning spouse.
- Combination. A mix of a one-time lump-sum award followed by periodic payments
But who decides spousal support payments?
In the State of Virginia, the courts recognize three different forms of divorce: court-based, mediation, and collaborative. Court-based cases means a judge will issue a final binding agreement that both sides must accept. In mediation and collaborative cases, couples can negotiate a final settlement agreement before proposing it to a judge. Mediation and collaboration tend to achieve better outcomes since the couple can often find a middle ground.
How is spousal support taxed?
Taxes can create a significant impact on all parties involved. That’s because, before 2019, spousal support was deductible for the payor. Divorcing couples used this tax loophole to reduce overall taxes.
As of January 2019, however, IRS rules changed regarding spousal support deductions. From 2019 onwards, spousal support an no longer be deducted by the payee on either their Virginia or Federal tax returns. In other words, the payee must pay taxes on his or her full income, calculated before any alimony transfers.
On the other hand, the IRS now no longer considers spousal support payments as taxable income towards the recipient.
Overall, the new tax laws raise total taxes paid. Even though the receiver doesn’t pay taxes, the higher earner (payor) will be subject to a higher tax bracket. Settling in a higher tax bracket reduces the total amount available for distribution.
What does spousal support in Virginia mean for me?
According to Code § 20-107.3, Virginia courts seek to “arrive at a fair and equitable monetary award” when settling finances between divorcing couples.
But what’s considered “fair and equitable?”
That’s tricky, isn’t it?
The loose language of Virginia’s divorce code means you need to stay proactive in fighting for your rights. Unlike community property states that split marital assets 50-50, Virginia’s legal system means there’s a wide range of possible outcomes. Two identical cases can end up with tremendously different results.
With spousal support in Virginia, there are three critical experts to consult.
- Financial: Divorce Financial Advisor or Wealth Specialist. An investment pro can track assets and make sure you’re receiving an equitable settlement.
- Legal: Family Lawyer. A Virginia-licensed attorney will help advocate your rights if your case goes to court. They can also help draft separation contracts.
- Tax: Accountant. A good CPA will help reduce taxes and make sure your spouse doesn’t leave you with hidden tax “landmines.”
Spousal support is an essential piece of the financial puzzle. Make sure you’re getting the assets and support you’re due.
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