Last Updated on October 9, 2021 by Benson Varghese
Alimony in Texas is a contractual construction and does not come up in Texas nearly as often as it does in other jurisdictions. It is nevertheless an important consideration when going into the divorce process.
Difference Between Contractual Alimony in Texas vs. Court-Ordered Spousal Maintenance
In many marriages, one spouse earns a higher income than the other, while the other works part-time, handles household duties, or cares for children. After a divorce, the lower-earning spouse may not be in a strong enough financial position to get the education or career necessary to start earning enough to cover their expenses. This is the basic reasoning behind why Texas courts will award a spouse “spousal maintenance” or parties agree to “contractual alimony” in a divorce. In addition to dividing the spouse’s property community, the court may also require one spouse to make payments to the other to allow them to keep up their standard of living during and after the divorce. These are the important differences between contractual alimony vs. court-ordered spousal maintenance.
Contractual alimony is just that – a contractual obligation. Usually, divorces are settled by agreement of the spouses, whether voluntary or through compulsory mediation. During these negotiations, the spouses bargain over certain issues, like how to divide up property and debts, parenting time schedules, and alimony awards. Once the spouses reach an agreement, they submit it to the judge to enter into the final divorce decree. This final divorce decree is binding, so the spouses contractually must adhere to the agreement they signed.
One difference between contractual alimony vs. court-ordered spousal maintenance is that the spouses can basically agree to make the payments in any amount, for any duration, including permanently. Court-ordered spousal maintenance, on the other hand, is much more limited in scope.
Court-Ordered Spousal Maintenance
Texas courts occasionally, but not often, will require a spouse to pay another maintenance by court order. To be eligible for court-ordered spousal maintenance, the spouse must:
- Prove that they will not have sufficient property to pay for their reasonable needs, and one of the following:
- The marriage lasted ten or more years and the spouse cannot get a job that will pay for their reasonable minimum needs
- The spouse is the caretaker of a disabled child, which will prevent them from earning enough to pay for their reasonable minimum needs
- The spouse has an incapacitating disability arising during the marriage that prevents them from earning enough
- The other spouse was convicted of family violence within two years of the date of the filing of the divorce, or after the divorce commenced
Because spousal maintenance is generally disfavored in Texas, there is a statutory cap on how much a spouse may owe in spousal maintenance to the other. The maximum is set at the lower of $5,000 monthly, or 20% of the spouse’s average monthly gross income. Gross income is calculated by adding up everything that that spouse earns in a month, such as salaries, wages, royalties, rental income, interest, stock dividends, or income from selling property.
What happens when the payor spouse does not pay? When the spouse who owes alimony or maintenance does not pay, courts are better equipped to enforce the provisions of court-ordered spousal maintenance than contractual alimony.
Enforcement of Spousal Maintenance
Under Section 8.059 of the Texas Family Code, the court may enforce spousal maintenance orders with its contempt powers. Holding a party in contempt means the court may order fines or even jail time for failure to comply, according to Texas Government Code Sec. 21.002. The spouse can raise a defense that they either could not afford the amount due, lacked property that they could sell to pay for it, failed to successfully borrow the needed funds, and had no other source to legally obtain the money.
Enforcement of Contractual Alimony
Contractual alimony in Texas, however, court-ordered. Rather, it is a contract. While courts can enforce contracts through damages or specific performance, the scope of the court’s power is more limited. The court legally cannot hold the payor spouse in contempt, so if they default, then the receiving spouse may be less likely to successfully enforce the payment.
For both contractual alimony and court-ordered spousal maintenance, the court can order income withholding. Under Texas law, when periodic payments of spousal maintenance are ordered, the court can order that income be withheld from the paying spouse’s disposable earnings. The statute goes on to provide, however, that the court can also order that income be withheld from the payor spouse’s earnings when there is an agreement voluntarily entered into and approved by the court. If you are in the process of attempting to determine if spousal maintenance or contractual alimony will apply in your divorce, consider visiting with the experienced family law attorneys at Varghese Summersett Family Law Group to learn more about all of your legal options.
Taxes and Contractual Alimony
If you receive contractual alimony in Texas, you no longer need to declare it as income. The Internal Revenue Service tax code used to provide that the payor spouse could deduct the payments from their taxes, while the receiving spouse had to declare them as income. However, the recent Tax Cuts and Jobs Act of 2017 modified this plan, so now the paying spouse must pay taxes on the payments, and the receiving spouse does not have to include the payments in their gross income.
Contact a Fort Worth Divorce Lawyer to Learn More
At Varghese Summersett Family Law Group, our compassionate attorneys understand the emotional and financial challenges that accompany a divorce. This is why we work so hard to understand our clients’ social and financial circumstances and to fight for what is most important to them. If you are going through a divorce and have questions about contractual alimony in Texas vs. court-ordered spousal maintenance, do not hesitate to reach out to us at (817) 900-3220 to set up a consultation with a Texas divorce attorney