Monetary issues represent one of the principal reasons why couples divorce, especially when one spouse works and the other does not. Typically, stress builds over the course of months or years until finally the frustrated spouse reaches his or her breaking point and initiates divorce proceedings.
At that time, the working spouse is often surprised to learn that he or she will be responsible for paying maintenance to the non-working spouse, which increases tensions further. And the individual who was trying to at first escape the imbalance often finds themselves trapped in the very situation they sought to leave, at least until the maintenance obligation ends.
How courts treat spousal support in cases where the financial contribution is not equal depends a lot on the arrangement the parties had during the marriage. The court will consider whether unemployment was voluntary or involuntary, whether the unemployed spouse handled most of the childcare responsibilities, or if the spouse was disabled and, as a result, could not be gainfully employed.
Most states have guidelines in place that impose a minimum threshold for child support on the non-custodial parent, irrespective of why the custodial parent is unemployed or falling short of his or her earning potential. In situations where a non-custodial parent is not working, courts will often impute income to that spouse based on what the court determines he or she could earn, especially if unemployment is voluntary.
If your husband or wife is not working, he or she may ask that you pay them alimony. In contrast to child support, which is often governed by state guidelines, courts have more discretion when making alimony awards. Alimony may be permanent, of limited duration, rehabilitative, or intended to reimburse a spouse for financial contributions made during the marriage.
When making alimony awards, the court will frequently consider whether the unemployed spouse left the workplace to care for children, whether or not it makes sense for that spouse to go back to work based on the children’s ages, or if that parent is caring for a disabled child. The court will further consider factors such as how long that spouse was out of the workplace and how long it will take him or her to get back on their feet.
Property division may also be affected when one spouse is not working. How courts divide property turns on whether you live in a community property state or equitable distribution state. In community property states, each spouse owns property purchased during the marriage equally, regardless of whether the spouse was gainfully employed or contributed monetarily to its purchase. There are presently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In equitable distribution states, property acquired during the marriage is typically owned by both parties in equitable proportions (and is referred to as being possessed by the “marital estate”). Upon divorce, each spouse is entitled to an equitable distribution, which is not necessarily 50 percent. Courts will dictate what a fair share is, and base its determination on the same factors mentioned earlier, among others. Therefore, if a spouse is unemployed due to a disability that prevents him or her from working, a court may allocate more than 50 percent of an asset to that spouse. Alternatively, if a husband or wife is deliberately unemployed, he or she may receive less than 50 percent of the asset’s value.
If you are married to someone who deliberately refuses to work, it is best to divorce quickly, allowing the court to consider previous earning in its determination regarding maintenance and property division. However, as we know, it is not often up to us how quickly the divorce process moves along. In cases where one spouse chooses not to work, the court may order that spouse to seek employment. Doing so serves not only to alleviate financial pressure on the working spouse but also to put the unemployed spouse on notice that if he or she deliberately does not work, they may receive less maintenance or assets as a consequence.
Still, it sometimes happens that an unemployed spouse will stay unemployed, despite the consequences. If that is the case, it may make sense for the paying spouse to offer a lump sum buyout to the unemployed spouse instead of paying the support award in installments over an extended period. Because a dollar today is worth more than a dollar tomorrow, a lump sum buyout allows the unemployed spouse to receive a greater benefit than he or she otherwise would, while costing the working spouse more. However, can you ever really put a price on your freedom?