Video #37 – Getting Educated – Spousal Support PART 7 (Long Term Support Options)

Video Transcript

Welcome to FreeDivorce.com. 

Christina:  This is Christina.

Ed:  This is Ed. Today, we are going to talk about the different varieties of long-term spousal support agreements or orders.  We are going to discuss eight different varieties of spousal support orders.  We briefly mentioned this in the first video in the spousal support series.

Ed:  Christina, what is a spousal support agreement that is referred to as a mutual permanent waiver.

Christina:  Sometimes, both parties earn about the same amount of money and no spousal support is owed by either party to the other.  Sometimes, even though one party may be entitled to spousal support, they don’t want it.  Perhaps the party entitled to spousal support intends to remarry right away so there is no real spousal support issue.  In these situations, both parties can agree to permanently waive their rights to receive spousal support.

Ed:  Do you need special language in your settlement agreement if you intend to do a permanent waiver of spousal support?

Christina:  If you both agree that neither one of you wants spousal support, it is very important that the language you use in your settlement agreement makes it absolutely clear that both parties are completely waiving their rights to receive spousal support.  Simply saying that no spousal support shall be payable by either party to the other is not sufficient.  You want your agreement to state that both Husband and Wife waive, now and forever, any and all rights to receive past, present and future spousal support from the other party and that the court shall have no jurisdiction at any time or under any circumstances, regardless of any hardship to either party, to make an award of spousal support.  You need the termination of jurisdiction language in your agreement if you want a permanent waiver of spousal support.  If you don’t have this language in your agreement, you may find yourself paying spousal support down the road.

Ed:  Does a permanent waiver need to be mutual?

Christina: No.  A permanent waiver of spousal support does not need to be mutual.  Sometimes, one party will agree to a permanent waiver of their rights to receive spousal support, while agreeing to pay the other party spousal support.

Ed:  What is a spousal support agreement that is called a “reservation of jurisdiction”?

Christina:  A permanent waiver of spousal support means you can never ask for an award of spousal support no matter what.  A “reservation of jurisdiction” means you do not need spousal support at this time, but you want the court to reserve jurisdiction to make an award of spousal support at some time in the future upon a showing of changed financial circumstances.  For example, say you have a good job when you and your spouse separate.  You earn enough to be self-supporting.  However, you are worried you may be laid off.  If you are laid off, you will need spousal support, so you want your divorce settlement agreement to have a reservation of jurisdiction over the issue of spousal support.  Here is another example.  Perhaps you can support yourself at the time of the divorce, but you have health issues and you are concerned you may not be able to support yourself in the future if your health deteriorates.  In these types of situations, you will want a “reservation of jurisdiction” when it comes to spousal support.  The reservation of jurisdiction will allow you to come back to court in the future and ask for an award of spousal support if you need it.

Ed:  What about a spousal support agreement where one party pays spousal support for a fixed period of time?

Christina:  An example of this type of agreement would be as follows:  Husband shall pay Wife $213 per month, payable in full on the 1st day of each and every month, starting October 1, 2019, and ending September 30th, 2021, at which time Wife’s rights to spousal support shall terminate forever and the court’s jurisdiction to award Wife spousal support shall terminate.

Ed:  What would be a spousal support agreement where support is paid for an indefinite period of time?

Christina:  An example of this type of agreement would be as follows:  Husband shall pay Wife $213 per month, payable in full on the 1st day of each and every month, starting October 1, 2019, and continuing until further order of the court.   The phrase, “until further order of the court” is the key language.  It means support will be paid until a new court order is made in the future saying that support ends.   That new court order may come about by way of a future stipulation between the parties or after a contested hearing.

Ed:  What would be an example of a spousal support agreement where the amount of support decreases over time until it reaches zero?

Christina:  An example of that type of agreement would be as follows: 

Husband shall pay Wife $213 per month, payable in full on the 1st day of each and every month, starting October 1, 2019 and continuing until October 1, 2024, at which time the amount shall be reduced to $100 per month, and continue at the rate of $100 per month until September 30, 2029, at which time spousal support shall be reduced to zero. 

Note that there is a big difference between reducing support to zero and terminating the court’s jurisdiction to award spousal support.  If the agreement simply says support is reduced to zero, that leaves the door open for the recipient to ask the court to extend the duration of support.

Ed:  What would be an example of a spousal support agreement where the spousal support is non-modifiable as to amount:

Christina:  An example of that type of agreement would be as follows:

Husband shall pay Wife $213 per month, payable in full on the 1st day of each and every month, starting October 1, 2019, and continuing until October 1, 2024, or further order of the court.  The amount of support shall be non-modifiable regardless of any financial hardship experienced by either party.

A spousal support order that is non-modifiable as to amount can be very dangerous.  If either party loses their job or becomes disabled due to an accident or illness, the amount of support remains the same.

Ed:  What would be an example of a spousal support agreement that is non-modifiable as to amount and duration?

Christina:  An example of that type of agreement would be as follows:

Husband shall pay Wife $213 per month, payable in full on the 1st day of each and every month, starting October 1, 2019, and continuing until October 1, 2024. The amount of support and the duration of support shall be non-modifiable regardless of any financial hardship experienced by either party and the court shall not have any jurisdiction to modify the amount or duration of spousal support.

Again, a spousal support order that is non-modifiable as to amount and duration can be very dangerous because financial circumstances can change.  If either party loses their job or becomes disabled due to accident or illness, the amount and duration of support remain the same.

Ed:  What if I know I will likely have to pay spousal support, but I prefer to buy out my spouse’s rights to spousal support?

Christina:  Some parties dispose of the spousal support issue by means of a buyout.  A lump sum of money is paid in exchange for the other party’s agreement to permanently waive any and all rights to receive spousal support. 

Ed:  If I want to do a buyout, how do I decide how much I should pay?

Christina:  How much should be paid depends upon a lot of factors.  What would be the total amount of spousal support paid if it were paid in monthly installments for half the length of the marriage?  Take that total and start discounting it for various reasons, such as the possibility that the recipient may re-marry; the possibility that recipient may co-habit and thus have a decreased need for support; the possibility that the recipient may die; the possibility that payor may die; the possibility that the recipient may start earning more money so less support would be owed; etc.

At least in the past, when spousal support was tax-deductible, if a lump sum were to be paid as a non-taxable payment, the lump sum would also be discounted due to income tax considerations. 

Ed:  In a later video, we go over a Judicial Council form as well as a Marital Settlement Agreement template that can be used to set forth your spousal support agreement.

 

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