Alimony takes two forms in Alabama: alimony in gross and periodic alimony. Alimony in gross provides the means by which property rights and interest may be terminated by a series of payments for a fixed period of time, by use of property for a certain period of time, or payment of loan obligations. Alimony in gross payments survives the death of the payor or the recipient until all required payments have been made. Periodic alimony on the other hand is characterized by payments which are uncertain either in time or total amount. For instance, payments which terminate upon the death of the recipient or upon the marriage of the recipient would be characterized as periodic alimony.
The purpose of periodic alimony is to help the recipient spouse to maintain a similar lifestyle to that enjoyed during the marriage until the recipient spouse is either self supporting or capable of maintaining a similar lifestyle on their own. The award of periodic alimony has a statutory basis in Alabama is required where a “…spouse has no separate estate or if it is insufficient for the maintenance of a spouse…” Property acquired prior to the marriage or through inheritance which was not used as marital property or which did not produce income used by the spouses is not part of the marital estate used in the determination of periodic alimony.
Periodic alimony may be modifiable in post-judgment proceedings where the circumstances of either spouse have changed. Periodic alimony is terminated upon the remarriage or death of the recipient spouse. Periodic alimony amounts may be modified upon the marriage of the payor spouse, changes in the financial need of the recipient spouse, change in the recipient spouse’s employment, or ability of payor spouse to pay.
IRS Tax Considerations
Payments in the form of alimony in gross are not deductible on behalf of the payor nor reported as income by the recipient. On the other hand, periodic alimony is deductible from the gross income reported by the payor and reportable as income by the recipient spouse.