On January 1, 2014, Colorado’s amended law on spousal maintenance (alimony) will officially become effective. However, most judges and practitioners are applying the revised version of C.R.S. 14-10-114 already. What’s the big deal? The formulas.
Historically, judges have been allowed a tremendous amount of discretion when considering permanent alimony in a Colorado divorce. Such latitude resulted in unpredictability. The amount and length of maintenance awarded by a judge would seemingly hinge on an arbitrary factor such as the likability of a party. The result was a political push towards a system where maintenance allocations are easier to predict. The Alimony Reform Act of 2011 in Massachusetts was used as a model. After a number of failed attempts using various formulas and language on how a court should apply the formulas, the Colorado General Assembly finally settled on the “advisory guidelines” of House Bill 13-1058.
The new law contains two significant formulas. The first deals with the maintenance term. There are different policy reasons for alimony in a Colorado divorce. One concept is “reimbursement” to compensate a spouse for supporting the other while in school or start-up phase of a business. Another reason may be “transitional support” to assist someone like a stay-at-home mother as they reenter the workforce. Colorado’s new maintenance law deals with these concepts in a rigid manner by simply providing a table for the suggested length of maintenance depending on the length of marriage. For example, a 3-year marriage results in a proposed maintenance term of 11 months, or 31% as long as the marriage. In contrast, a marriage of 13 years results in a suggested term of 6.5 years, or a maintenance award 50% as long as the marriage.
The second formula applies to the amount of maintenance. Colorado’s new law on permanent spousal support is generally calculated as follows:
40% of higher gross income – 50% of lower gross income
Here are a few examples of how that formula works.
Husband’s income is $48,000 or $4,000 per month. Wife’s income is $24,000 or $2,000 per month.
$4,000 x 40% = $1,600
$2,000 x 50% = $1,000
$1,600 – $1,000 = $600 per month in maintenance
Wife’s income is $175,000 or $14,583 per month. Husband’s income is $24,000 or $2,000 per month.
$14,583 x 40% = $5,833
$2,000 x 50% = $1,000
$5,833 – $1,000 = $4,833 per month
However, there is a cap on the proposed amount of alimony in Colorado. The guidelines suggest that the maintenance amount should not exceed 40% of the parties’ combined monthly gross monthly when maintenance is added to the recipient’s gross monthly income. Example 2 shows how the cap works.
$14,583 (Wife) + $2,000 (Husband) = $16,583 in total gross monthly income
$16,583 x 40% = $6,633 is cap
$6,633 (cap) – $2,000 (Husband’s income) = $4,633
Therefore, instead of Husband receiving $4,833 per month in maintenance as suggested by the original formula, Husband will be awarded $4,633 in monthly maintenance if a court follows the guidelines because of the cap.
The above is a general overview of the new law on alimony in Colorado. In future posts, we’ll analyze the many wrinkles to Colorado law on maintenance such as the threshold test, determination of “gross income,” and parties’ reaching a settlement on the amount and term of maintenance.