1. Similarities & Differences Michelle May O’Neil O’Neil Wysocki, P.C.
Alimony v. Maintenance
Similarities & Differences
Michelle May O’Neil
O’Neil Wysocki, P.C.

2. Overview Spousal Maintenance: Contractual Alimony:
Statutory – TFC Ch. 8
Court Order
Contractual Alimony:
By Agreement

3. Maintenance: History
Texas became the last state in the nation to enact a statute that would allow a court to impose on one ex-spouse a duty to provide support to another ex-spouse out of future income.
Texas legislature enacted the spousal maintenance statute in 1996, which became effective September 1, 1995.

4. Maintenance: Defined TFC §8.001(1) “Maintenance” defined as:
“An award in a suit for dissolution of a marriage of periodic payments from the future income of one spouse for the support of the other spouse.”

5. Maintenance: Eligibility
Court must determine if spouse lacks sufficient property to provide for his or her minimum reasonable needs (MRN).
If so, the spouse may be awarded maintenance only if two specific conditions exist:

6. Maintenance: Eligibility, cont.
Other spouse was convicted of a crime involving family violence within the 2 years prior to filing the petition or while the suit is pending.
The parties were married for 10 or more years.

7. Maintenance: Eligibility, cont.
The eligible spouse:
Must lack the ability to earn sufficient income to support his or her MRNs; or
Lack sufficient property (including property awarded in the divorce) to support his or her MRNs.

8. Maintenance: Eligibility, cont.
Alternatively, spouse eligible if:
He or she is the custodian of a child of the marriage of any age who requires substantial care and personal supervision;
Or, due to a physical or mental disability that prevents the spouse from earning a sufficient income to provide for his or her MRNs.

9. Minimum Reasonable Needs (MRN)
Court examines evidence regarding expenses & property of spouse seeking maintenance.
Expenses may include mortgage, car payments, utilities, insurance, medical expenses, groceries, etc.
Court examines other factors: mental health, physical impairment, education.

10. Grounds: Family Violence
Length of marriage irrelevant.
Must prove that spouse convicted of, or received deferred adjudication for, criminal offense constituting an act of family violence under TFC §
Act must have been committed against requesting spouse within 2 years prior to filing or while pending.

11. Grounds: Marriage 10+ Years
Length of marriage measured from date of marriage through trial.
Date of filing of petition and date of separation are irrelevant. Hipolito v. Hipolito, 200 S.W.3d 805, 807 (Tex. App.—Dallas 2006, pet. denied).

12. Grounds: Marriage 10+ Years, cont.
Rebuttable presumption under TFC §8.051(2)(B) that maintenance not warranted unless requesting party shows diligence in:
Earning sufficient income to provide for his or her MRN, or
Developing the necessary skills to provide for his or her MRN while divorce pending.

13. Grounds: Disabled Spouse
Must prove inability to provide for MRN due to physical or mental disability.
Expert testimony not required. Pickens v. Pickens, 62 S.W.3d 212, (Tex. App.— Dallas 2001, pet. denied).
Determining whether disability prevents one from earning sufficiently to meet MRN is fact intensive. Pettry v. Pettry, No CV(Tex. App.—Beaumont 2004, no pet.).

14. Grounds: Parties’ Disabled Child
Spouse seeking maintenance is custodian of a “child of the marriage” who is disabled.
Defined: “Child born to a married [person] living with [his or her] spouse. In re S.C.L., 175 S.W.3d 555, 557 (Tex. App.—Dallas 2005, no pet.).
May be adult child requiring substantial care & personal supervision. TFC §8.051(2)(C).
Care & supervision prevent spouse from earning sufficient income to provide for MRN.

15. Maintenance: Duration
Shortest reasonable period, but no longer than:
5 years = 10 year marriage w/family violence
5 years = year marriage
7 years = year marriage
10 years = 30+ year marriage. TFC § 8.054
May be terminated after death or cohabitation with another person with whom obligee has a romantic relationship. TFC §

16. Maintenance: Amount Statutory: lesser of $5,000 or
20% of spouse’s average mo. gross income
Gross income includes wages/salary &:
Other compensation including commissions, overtime pay, tips, & bonuses;
Interest, dividends, & royalty income;
Self-employment income;
Net rental income;
All other income actually being received.

17. Enforcement: Contempt
Court may enforce by contempt(jail and/or fine) the court’s maintenance order or a voluntary agreement for payment of maintenance entered between the parties and approved by the court. TFC § 8.059(a).

18. Enforcement: Garnishment/IWO
A court may enforce an order for spousal maintenance by ordering garnishment of the wages of the person ordered to pay the maintenance. Tex. Fam. Code Ann. § 8.059(e).
No garnishment for unemployment insurance benefit payments. TFC § (e).

19. Enforcement: Garnishment/IWO
When periodic payments of spousal maintenance are ordered, modified, or enforced, the court may order that income be withheld from the disposable earnings of the obligor. TFC § 8.101(a).

20. Maintenance: Modification
When order or decree provides for support of former spouse, amount may be reduced by filing a motion in the court that originally rendered the order. A party affected by the order or decree may file. TFC § 8.057(a).
Court can only be reduce, not increase, the amount.

21. Maintenance: Termination
Death or Remarriage
Obligation terminates on the death of either party or on the remarriage of the obligee. TFC § 8.056(a).

22. Maintenance: Termination, cont.
Cohabitation
After hearing, court shall terminate if obligee cohabits with another person in a permanent place of abode on a continuing, conjugal basis. TFC § (b); Allen v. Allen, 966 S.W.2d 658 (Tex. App.—San Antonio 1998, writ denied).

23. Governed by Internal Revenue Code § 71.
Alimony Under IRC
Governed by Internal Revenue Code § 71.
Contractual; no statutory requirements.
Terms as agreed between the parties.

24. Alimony: Advantages Parties control duration & amount.
Can only be modified by agreement.
Not enforceable by contempt.

25. Alimony: Enforcement Enforceable as a contract.
Not enforceable by contempt .
TFC §8.101 provisions do not apply for income withholding unless the contract specifically states otherwise.

26. Alimony: Internal Revenue Code
26 U.S. Code § 71 contains provisions for alimony and separate maintenance payments.
Gross income includes amounts received as alimony or separate maintenance payments unless terms of the divorce decree fix (in terms of amount or part of the payment) as a sum which is payable for the support of children of the payor spouse (i.e. child support).

27. Tax Deductibility
Starting in 2019, neither spousal maintenance nor alimony will be tax deductible.
Under the new law, the higher wage- earning spouse will be required to pay all the tax on the funds used to pay spousal maintenance or alimony, and the recipient will receive the payments tax- free.

28. Tax Deductibility (pre12/31/2018)
To meet requirements, payments must be:
Paid in cash or cash equivalent;
Received by, or on behalf of, a spouse;
Exchanged by members of different households;
Terminated upon death of spouse; and
Designated as maintenance or alimony.

29. Tax Deductibility, cont.
Reductions in payment amounts may trigger IRS to construe alimony payments as child support if based on child-related contingencies:
Ex: marriage, death, graduation, reaching age of majority, etc.

30. Tax Cuts and Jobs Act (TCJA)
Before TCJA, alimony payments were tax deductible by the obligor.
Obligee had to report the payments as taxable income.
For alimony payments after 12/31/2018, tax deduction is eliminated.

31. TCJA, cont.
New treatment will apply to payments under agreements modified after 12/31/2018 if specifically stated.
If a party wants a tax deduction for alimony payments, agreement must be finalized on or before 12/31/2018.
Alimony recipients have incentive to finalize next year.

32. Cases Ex Parte Hall Alexander v. Alexander In Re Dupree In Re Green
Kee v. Kee
Ayala v. Ayala
Slicker v. Slicker
Dalton v. Dalton
Waldrop v. Waldrop

33. Ex Parte Hall
H&W had a prenup that obligated H to pay more than TFC would have ordered him to pay.
Trial court issued temporary support order based solely on the prenup and not the authority of the TFC.
On appeal, court held that an order to pay spousal support may be based on a contractual obligation, but the order is enforceable by contempt only to the extent authorized by the TFC and the Texas Constitution. 611 S.W.2d 459 (Tex. Civ. App. 1980)

34. Alexander v. Alexander Education (MRN):
W in 14-year marriage entitled to maintenance while she completed her education; court reasoned that W could not support herself while working full-time at minimum wage & taking classes full-time to finish her degree S.W.2d 116 (Tex. App.—Houston 1st Dist. 1998).

35. In re Dupree
H, who was ordered to pay contractual alimony, could not be held in contempt and jailed as payments were a debt, and Texas Constitution prohibits imprisonment for failure to pay a debt S.W.3d 911 (Tex. App.—Dallas 2003, pet. denied).

36. In re Dupree, cont.
No references to W’s eligibility for spousal maintenance under Section 8.054; contractual alimony provisions exceeded statutory maintenance provisions for amount, duration, and termination.
Court concluded trial court had no authority to enforce H’s contract obligations by contempt under the Family Code.

37. In Re Green
Court-ordered maintenance under Ch. 8 must: (1) be of limited duration, (2) terminate upon remarriage, and (3) be for the purpose of supporting a spouse with special needs or circumstances S.W.3d 645 (Tex. 2007).

38. In Re Green, cont.
Parties’ agreement outside provisions of Ch. 8; payment obligation exceeded 3 yrs. with no finding of disability.
W argued that provisions of §8.059 should be applied regardless of compliance.
Court of Appeals narrowly construed applicability of enforcement remedy awards that meet provisions of Ch. 8.

39. Kee v. Kee Alimony (enforcement):
Partition and exchange agreement did not provide enforcement by income withholding; alimony provision was nothing more than a debt. 307 S.W.3d 812 (Tex. App.— Dallas 2010, pet. denied).

40. Ayala v. Ayala Physical Impairment (MRN):
Award of maintenance to W in 10- year marriage who testified at trial that she was diabetic, blind, & unable to work while raising the parties’ daughter., 387 S.W.3d 721 (Tex. App.— Houston 1st Dist. 2011, reh’g overruled).

41. Slicker v. Slicker Mental Health (MRN):
Court awarded maintenance of $3,500 a mo. for 10 yrs. based on evidence that W, whose only income was Social Security, suffered from anxiety & low self-esteem following parties’ 40-yr. marriage. Tex. Fam. Code Ann. §§ 8.051(2), 8.052, 8.053;, 464 S.W.3d 850 (Tex. App.—Dallas 2015, reh’g overruled).

42. Dalton v. Dalton
TX divorce decree gave full faith & credit to OK separation agreement, ordering H to pay “support alimony.”
W obtained judgments holding H in contempt through the Texas trial court for non-payment. 551 S.W.3d 126 (Tex. 2018).

43. Dalton v. Dalton, cont.
Trial court’s enforcement order included wage withholding & QDRO.
Court of Appeals upheld trial court’s enforcement order.
Supreme Court reversed & rendered; orders for wage withholding & QDRO for unpaid spousal support void.

44. Recent Case: Waldrop v. Waldrop
H & W had a provision in agreed decree for maintenance including termination provisions.
H filed dec action to determine if Ch. 8 maintenance or alimony and to modify or terminate payments.
Trial court declared provision was contractual and that even if Ch. 8 “material and substantial change” provision applied, H failed to prove.
Court of Appeals reversed and remanded. No Ch. 8 because exceeded limits. No CV, WL (Tex. App.—Fort Worth 2018, no pet. h.) ( ) (reh’g en banc).

45. Questions?
Michelle May O’Neil:
Karri Bertrand Bolton: