This article provides a brief overview on Texas law concerning post-divorce alimony in Texas. Laws differ from state to state and individual circumstances vary, so you should consult with a qualified family law attorney in your area for specific advice on your particular situation. Additionally, this article deals only with post-divorce alimony. It does not address temporary alimony, which is provided for under a different provision of Texas Family Code.
Two Kinds of Alimony: Contractual and Court Ordered Maintenance
There are two kinds of post-divorce alimony in Texas: contractual alimony and court ordered maintenance. The Texas Family Code also provides authority for court to order temporary alimony which occurs while a divorce is pending. However, temporary alimony is outside scope of this article and will not be addressed.
Contractual Alimony Contractual alimony is based on an agreement between parties in their divorce decree. For tax purposes, contractual alimony is normally deemed income to receiving party and is deductible from income of paying party. Since contractual alimony must be based on an agreement of parties, there are no limits to possible amount or duration of alimony.
Court Ordered Maintenance
Court ordered maintenance is provided for by Texas Family Code Chapter Eight. Although actually awarded in only a small percentage of Texas divorces, court has right to order one spouse to pay other post-divorce maintenance in either of two circumstances:
1. The payor spouse either received deferred adjudication or was convicted of a crime constituting family violence within two years of filing of divorce case, or
2. The parties have been married at least ten years and receiving spouse has some kind of financial limitation (disability, unable to work because caring for party's child, or lacks earning ability to meet minimum reasonable needs).
The monthly amount of court ordered maintenance is capped at lesser of: a) $2,500 or b) 20% of monthly payor's gross income.
The maximum duration of court ordered maintenance is three years. The only exception is when maintenance is ordered as result of a disability, in which case duration can potentially extend indefinitely.
Where there is a large disparity in incomes alimony can sometimes be used as a useful settlement tool. Since alimony is generally taxable to receiving party and deductible to paying party it can be often structured so that it is advantageous to both parties.