Spousal Support Colorado
With the end of your marriage approaching, a loud chorus of worries and fears keep playing in your mind:
- “Will I have enough money to keep the house?”
- “How will I be able to make ends meet?”
- “What will I do for health insurance?”
- “How will I be able to pay my bills and save for retirement?”
In divorce, these fears are perfectly normal and all center around…
When it comes to getting a divorce, there is no other issue that's more gut-wrenching, more stressful, causes more chaos, and is more difficult to come to agreement on, than any other.
So whether you call it spousal maintenance (as is the proper term in Colorado), alimony, or spousal support, coming to agreement on an amount of money that one ex-spouse will pay to the other to cover their expenses, while still having enough money left to cover their own, is difficult, to say the least.
And even though there is a Colorado alimony calculator, the topic of alimony in Colorado is a surprisingly difficult one to resolve.
In this post, we'll take a closer look at the complex and controversial topic of Colorado maintenance. And shed some light on what a divorcing couple can do to come a spousal support agreement they both find fair.
* Note: We’ll use the terms spousal maintenance, alimony, maintenance, and spousal support interchangeably for the purposes of this article.
What is the Purpose of Alimony in Colorado?
Spousal Support (alimony) is one of four topics that are discussed and agreed upon by the parties in mediation along with:
- Parenting Plans
- Child Support
- And Equitable Distribution (dividing your property, assets and liabilities)
The main premises behind Colorado spousal maintenance are that in addition to the legal bond you formed when you got married, you also formed an economic bond. Co-mingling together your previously separate financial lives and decisions.
Now that some years have gone by, and you're facing a divorce, untangling the decisions and contributions each of you made to the financial health of your marriage would be challenging.
And that’s why spousal support in Colorado exists.
To acknowledge each party’s role in the financial health of the marriage, regardless of their financial contribution.
Take this example:
Let’s say one of you works at a company, earning a paycheck and growing your career, while one of you stays home with the kids.
If you’re the spouse putting in those long hours, sitting in those boring meetings, and dealing with your obnoxious boss and coworkers, maybe you feel like you deserve to keep what you earn.
But if you’re the spouse shuttling the kids from activity to activity, keeping the house from becoming a disaster, and fielding calls from the school when junior comes down with a fever and must be picked up immediately, you may feel undervalued.
Alimony in Colorado acknowledges that without the help of, in this case, the stay at home spouse, the working spouse may have never reached that level in their career and earnings, if they also had to care for the kids.
To summarize, the State of Colorado puts it this way:
“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.”
How does the Colorado Maintenance Calculator Work?
In 2018, Colorado simplified its spousal support calculator into a three-step process to "try" and make things easier on divorcing parties.
At a high level, it works like this (note there's much more to calculating alimony in Colorado than what is outlined below):
- First add together you and your spouse’s monthly gross incomes.
- Then subtract half of the lower earning spouse’s income from the total you got in step one.
- Then take that number and multiply it by either 80% if the number is $10,000 or less, or 75% if the number is between $10,001 and $20,000.
The state also has suggestions on how long alimony in Colorado lasts based on the duration of your marriage.
Seems simple enough, right?
Not so fast…
There are a few things you need to understand about the challenges of determining alimony in Colorado:
- While the Colorado alimony calculator outlined above seems straightforward enough, due to its simplicity, it tends to create more issues than it resolves for divorcing spouses;
- The duration put forth by the Colorado maintenance calculator can result in an inadequate amount of Colorado spousal maintenance being paid, or even none at all;
- Since the Tax Cuts and Jobs Act (TCJA) passed in 2017 has eliminated the deduction of alimony payments for payors and recipients are no longer required to report payments as taxable income, on the surface it might appear as if this tax change benefits the recipient and hurts the payor, but it actually negatively impacts both parties;
- This topic has more to do with money and negotiation and less to do with laws;
- There is more than meets the eye on this issue and this topic is much too complex (and emotionally charged) to try to resolve on your own.
That's why you'll get the best result by mediating with us.
"Unfortunately, the revised Colorado Maintenance Calculator and Guideline (passed in 2018) along with the new tax treatment of maintenance resulting from the Tax Cuts and Jobs Act of 2017 have left Colorado couples even more confused about this complex and emotionally charged topic than ever before.
So instead of trying to figure it out on your own, or getting caught up in an endless loop with lawyers, mediate your divorce with me.
I’ll guide you through my proven, step-by-step process and help you and your spouse negotiate and come to an agreement on alimony that's realistic and fair to both of you."
The Colorado alimony calculator creates more issues than it resolves.
Over the past 10 years, some states have begun offering divorcing couples a formula to determine alimony. Colorado is one of those states.
But unfortunately, the Colorado alimony calculator while simple, isn’t perfect. And has several significant limitations which make using it difficult.
- When a couple's gross income exceeds $240,000;
- If the paying party receives a bonus which is based on a factor that can't be predicted such as with company performance;
- If the paying party has variable income the way a salesperson on commission would;
- If the paying party has recently received a significant raise or promotion;
- If the paying party is compensated in a non-traditional way like receiving stocks or options.
In all of these cases, the formula simply won't work.
Leaving you and your husband or wife no other choice but to negotiate this issue.
Which is very difficult to do, given the very nature of divorce.
And what exactly is income anyway?
During our many years of practice, we’ve seen the concept of income evolve from a simple weekly paycheck, to complex compensation packages including:
- signing bonuses
- stock options
- restricted stock units (RSU)
- ownership shares of privately held companies
- vehicles allowances
- private planes
These items don’t neatly fit into the Colorado maintenance calculator.
And given the prevalence of high tech companies in the Denver metropolitan area, these types of complex compensation are becoming more and more common.
Making calculating spousal support in Colorado even more difficult.
There are also issues when it comes to how long Colorado spousal maintenance will last.
As mediators, we won’t guess how long alimony will last in your situation. Or claim to know what would happen if you took your Colorado maintenance case to court.
But with guidance on the duration of Colorado maintenance readily available on the web, it can be difficult to ignore, when going through a Colorado divorce.
If you believe everything you read (even though we all know you should never do that!) alimony in Colorado would last anywhere from 31% to 50% of the length of your marriage.
But… only if you marriage lasted between 3 and 20 years.
If you were married 3 years or less, and chose to listen to the guidance provided by the State of Colorado, there would be no alimony paid or received.
Now if you’re the person who would be expected to pay alimony, you may be happy about this.
But what if you’re the person who got married, gave up your career, and had a child right away as many of our short-term marriage clients do? You’d be home with your child, facing a divorce, with no source of income, and in theory, no spousal maintenance to support you.
On the other end of the spectrum are long-term marriages.
If you and your spouse have been married 20 years, again if you chose to listen to the guidance provided by the State of Colorado, you would qualify for 10 years of spousal support.
Say you got married at 25, stayed home with the kids the entire time, and now find yourself divorcing after 20 years of marriage. You have approximately 15 years until you can tap into your retirement accounts without penalty.
Receiving only 10 years of alimony in Colorado would create a financial gap between the time your spousal maintenance ends, and you could start utilizing funds from your 401(k) or IRA.
And what happens if you’re married 20 years or more?
There are some that say spousal maintenance should cap at 10 years.
While others say it should be “indefinite.”
But what if you’re the one paying, and you want to retire? Not today mind you, but sometime before you can’t walk or remember your own name? Will you still have to keep paying?
Adding to the confusion is the actual Colorado maintenance statute itself
A common misconception is that if you and your spouse can’t use the Colorado maintenance calculator, you’ll just go to court and a judge will have some different formula to tell you how much spousal support you’ll pay or receive.
Well… I have some bad news for you. Here are some of the things that can affect how much maintenance in Colorado you'll pay, and how long it will last.
And notice not one of them is a formula or a calculation.
- The financial resources each of you will have post-divorce. This can include things like income generated by the property you’ll receive in your divorce such as stock dividends, or a rental property, or any other source of income either of you receives, now, or perhaps in the future;
- The financial resources the person paying alimony in Colorado will have post-divorce, coupled with their ability to meet their own expenses and needs while paying maintenance;
- The lifestyle each of you enjoyed while married such as the residence you lived in, the kinds of cars your owned, the types and frequency of vacations your took, etc.;
- How each of you intend to share in your marital property, and if additional property will be given to one of you in the terms of your divorce so that the other won’t have to pay spousal support (also know as an alimony buyout);
- You and your spouses’ incomes from employment, considering your respective abilities to get a job or advance your career, the need for additional schooling, and if there are minor children who limit you or your spouses’ ability to work and earn an income;
- If throughout the marriage one of you consistently earned more than the other, even if you both worked the entire time;
- How long the two of you were married;
- If while you were going through the divorce process, maintenance was already being paid in anticipation of your future divorce;
- The age and health of you and / or your spouse, and if either of you have any special health needs, or expenses, which may not be covered by insurance post-divorce;
- If one of you paid the pre-marital debts of the other spouse during the marriage to improve their financial position;
- If one of you put the other through school while married;
- If maintenance is even relevant in the first place;
And our personal favorite...
- Any other factor that the court deems relevant.
Starting to see why determining alimony in Colorado isn’t as straightforward as it seems?
Don't forget about cost of living.
As if figuring out Colorado alimony wasn't hard enough, there's yet one more factor we need to add to the mix. And that factor is where you live.
Say your marital home was in Denver, and you're the party who will be paying alimony. But your spouse decides to move to Fort Collins post-divorce, to be near family.
Do you pay alimony to them based on what it cost you both to live in Denver while you were married? Or, do you pay them based on what it will cost to live in Fort Collins - recognizing it will be 11% less expensive to live there?
When thinking of Colorado alimony, most people think of the "check in the mail" approach.
But there are other, more creative ways to resolve this because some payor spouses just don’t like making alimony payments.
For example, sometimes people will trade alimony for equitable distribution in their case. Or do a lump sum alimony payment or an alimony buyout.
And in some cases, pay for their ex-spouse to return to school. The thinking being if they become self-sufficient, the need for spousal support may be eliminated, or greatly reduced.
The bottom line is there’s no such thing as "typical alimony" payments.
And there are many different ways to resolve this issue.
There is more than meets the eye when it comes to alimony in Colorado.
Alimony is not a one-size-fits-all topic and every couple’s situation, circumstances and determining factors are unique.
So coming to a fair agreement on alimony with your soon-to-be ex-spouse requires more than just a passing conversation or a wild guess. And as you’re starting to see, there’s a lot involved in this highly complex matter.
And a lot of places you can make costly mistakes.
In the majority of cases, this issue is much too complex and emotionally charged for you to attempt to determine on your own, especially if you have a long-term marriage.
When lawyers get involved, it’s a problem.
Because the Colorado maintenance calculator leaves much open to interpretation, you may be tempted to go the divorce attorney route. But be warned! Your lawyers can drag your negotiations on for years.
Fighting and fighting. Around and around in circles - in a very gray area. All while billing you their outrageous hourly fees.
Until neither you nor your spouse has any money left to keep paying your legal fees.
And there's no money left for spousal support!
Just one more reason it’s better for both spouses not to involve lawyers in their divorce negotiations.
When a judge gets involved, it’s a problem.
And if the issue cannot be resolved between the two of you and your lawyers, your case will go to litigation in court.
There’s something you need to understand here: In a litigated divorce, a judge determines who gets what on a case-by-case basis.
Sounds scary, doesn’t it?
Because they’ll dictate the terms of the settlement in court and tell you what you’re going to pay or receive.
And each of you might wind up with a Colorado spousal support outcome you don’t think is fair or that doesn’t meet your needs.
That’s why it’s better to negotiate an amount and duration each spouse finds fair. And negotiation is exactly what divorce mediation is all about.
In mediation, you get to decide - and come to an agreement you both agree is fair, out of court - instead of letting your future be decided by a stranger.
You’ll get the best result by mediating your no-fault divorce in Colorado with us.
Using our extensive financial knowledge into the complex matters of alimony and divorce, we'll help you discuss your options for alimony in Colorado.
And we'll help you and your husband or wife understand how other aspects of your divorce settlement may impact your spousal support agreement.
We’ll also actively guide you through our comprehensive budgeting process to reflect your marital expenses as well as your projected expenses post-divorce. So we can take a close look together at what each of you earn, spend and will need to move forward.
And determine how, if at all, the division of your community property and debts and expenses related to your children will factor in when determining an amount and duration.
We’ll then help you negotiate an alimony result you both find fair and will best enable both of you to meet your financial obligations after you're divorced.
Equitable Mediation enables you to get a fair spousal maintenance outcome.
Why be forced to accept a settlement created by an attorney or judge when you can have a direct say in your financial future instead?
If you want to arrive at an agreement on maintenance that's fair to each of you and doesn’t bankrupt you in the process, mediate your divorce with Equitable Mediation.
If you and your spouse have both agreed to divorce and both want to mediate, take the next step and book an initial meeting for the two of you.
Early in the process?
Get our Free eBook to learn about the benefits of mediating your divorce out of court.
Before you go out and hire a divorce lawyer, learn why you owe it to yourself and your children to mediate your no-fault divorce out of court instead.
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