New Law Limits Alimony in Alabama

Earlier last year, the Alabama legislature changed the rules for alimony. Before the changes, Alabama family court judges would routinely review petitions for alimony and award something called “periodic alimony.” Periodic alimony is designed as an ongoing and continual support for a spouse. Many have criticized this type of alimony, calling it ‘forever alimony’ or ‘permanent welfare’ for the recipient. Permanent or periodic alimony creates an everlasting connection between two people who have worked very hard to separate their connection through marriage.

The underlying problem for Alabama divorce lawyers has always been the uncertainty of what to expect when helping a client with a divorce. It can be challenging to anticipate what a judge will do when it comes to alimony awards. The new law gives more certainty.

Alabama HB 257

On April 13, 2017, the Governor signed a new bill into law, creating some big changes to how Alabama courts will decide alimony. Under the new law, periodic alimony is still possible but, unlike in the past, there are specific limitations on when it may be awarded. Just take a look at three of the ways that the law has changed Alabama alimony.

Interim Alimony

Under the new law, either party may request interim alimony, meaning support during separation or pendency of the divorce action. To get this sort of temporary support, the requesting person must show a need, the person who would pay the support must be capable of doing so, and it must be shown that the marriage is valid. Interim support ends with the final divorce decree.

Periodic Alimony is Only for Limited Circumstances

Unlike before, now periodic alimony is only to be awarded in limited circumstances. For instance, the new law states that rehabilitative maintenance should be limited to just five years.  If a person can show good cause for deviating from this rule, then a court may award support up to the same length of time as the marriage. So, a person who was married for 10 years would be limited to no more than 10 years of alimony, even if he or she could prove that periodic alimony is warranted.

This basically means that in most cases, a person will be limited to just five years of support after the marriage unless they can show a significant need to deviate from the rule. Even in those circumstances, the length of the marriage creates a maximum cap on how long periodic alimony can be awarded.

20-Year Exception for Periodic Alimony

Despite the fact that periodic alimony cannot be awarded for longer than the length of the marriage, the new law still carves out an exception for those married longer than 20 years. In those situations, a person may still be awarded ongoing and permanent alimony. Nevertheless, the new law definitely creates a strong barrier to such continuing and endless support orders.

Policy Behind the New Law

Alabama now joins a growing number of states that are attempting to eliminate permanent alimony. While there are certainly circumstances in which it may be appropriate, in most situations it is best to sever a relationship and create some form of certainty for both parties. On one side, the recipient needs to have a definite time period to rebuild his or her life. For the individual paying alimony, there needs to be a definite term after which he or she can expect to stop paying. The new law, while imperfect, does appear to create a degree of certainty that will help divorcing couples and their attorneys better plan for the future.

Getting Real Help with Your Divorce in Alabama

If you are facing a divorce and have questions about alimony, child support, property distribution, or any other issues that could seriously affect your future, call (205) 263-0743 or visit 5 Points Law Group online to set up a confidential meeting with an attorney today.

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Three Common Sense Reasons You Should Consider a Trust

When people hear the term “trust fund,” they usually think of the super-wealthy, but trusts are not just for those with incredibly high-asset estates. Many middle-class to upper middle-class families would benefit from a trust. Anyone who is contemplating their estate plan in the near future should at least consider some of the ways that a trust might help your family. With this in mind, here are just three simple common sense reasons why you should consider creating a trust for your estate plan.

Reason #1: Tax Benefits

Alabama does not have an estate or inheritance tax, meaning that you and your heirs are not taxed by the state on the value of an estate. Likewise, the federal estate tax has been doubled as of 2018. Therefore, unless you have an estate valued at more than $11.2 million per person or $22.4 million per married couple, you should not face an estate tax. Although this eliminates some of the tax benefits of creating certain kinds of trusts, one should keep in mind that the new tax law has a sunset provision. These increased thresholds are only good until 2025. So, the limits could quite possible revert back to their prior limits of approximately $5.5 million per person and $11 million per couple. A trust can be established to protect assets, if this is a concern.

Reason #2: Life Insurance Trusts

Some states make you name individuals as beneficiaries for life insurance. Fortunately, Alabama allows you to also name a trust as a beneficiary. By doing this, you can protect future life insurance proceeds. For a young middle-class worker with a $1 million term life insurance policy, consider the benefits. If you are the sole earner for the family and you die, leaving a large amount of insurance money to your spouse and children, you have little control over how the money is used. If your spouse were to remarry and later die, all of the money intended to take care of children might go to the new spouse or that person’s children. When you die, you lose control over how money is used. A trust can help protect against that.

Reason #3: More Options

Simply put, Alabama trusts have more options than wills. Although they do require a little more planning and work to prepare, a trust gives you many options that a basic will cannot offer. For instance:

• Spendthrift provisions. Protect against wasteful heirs or those with drug or criminal issues.
• Incentives for heirs. Create financial incentives for heirs to be successful.
• Privacy. Keep your family’s affairs out of public court records.
• Probate avoidance. Avoid costly court administration.
• Much more

Get Help Planning Your Estate

In Birmingham and the surrounding areas, the attorneys of Five Points Law Group want to help you protect your estate from unnecessary taxes and ensure that you understand all of your options. Trusts are not just for the super wealthy anymore. Anyone who wants privacy and wishes to avoid probate should consider a trust. Likewise, if you want more control over your assets and wish to protect your legacy, then there is probably a trust that is right for you. Call or visit us online to schedule an appointment to review your options today.

 

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