Monday, December 15, 2014

New Colorado Law For Spousal Support

For those of you about to begin a divorce proceeding or those already in the midst of a divorce, Colorado's new law may affect you.

HOUSE BILL 13-1058 will go in effect on January 1st and it may change dramatically the way that spousal support is determined in your case. Before this law there was a lot of uncertainty in trying to predict the amount of spousal support that would be awarded. Judges throughout Colorado varied greatly in how they calculated and therefore how much they awarded in spousal support.

The new laws has several important points:

  1. It is not mandatory. Judges may depart from the guidelines, but need to state why they choose a different amount or time.
  2. It applies to marriages that are 3 years old or more. If you haven't been married for at least three years, the guidelines don't apply. This may be especially important if you are close to your 3 year anniversary and considering divorce.
  3. It applies to cases were spouses combined income is below $240,000. If your combined income is greater than $240k then you are still in an area of uncertainty.
The new law provides a formula for determining spousal support. Please remember that this is not binding, they are merely guidelines and helps make spousal support more predictable.

Under the new law, the calculation for spousal support is 40% of the higher earner's income minus 50% of the lower earner's income with a limit that the sum of spousal support and the lower earner's income may not exceed 40% of the combined income of both spouses.

For example, let's assume spouse A earns $10000 a month and spouse B earns $5000 a month. The first part of the calculation would be $4000 (40% of $10000) minus $2500 (50% of $5000) = $1500 per month. The calculation doesn't end there. The second part of the equation looks at the 40% rule. This means spousal support is granted up to the point that spouse B is making 40% of the combined income of the spouses. In the example, this limits the spousal support for spouse B to $1000 (40% of combined income of $15000 equals $6000 minus $5000 spouse B earns). Therefore, even though part 1 of the formula seems to grant spouse B $1500, the second part of the equation limits that amount to $1000. Spouse B will receive $1000 per month of spousal support IF the judge follows the guidelines.

The other aspect of the new law is the length of those spousal support payments. In the past courts were also inconsistent in determining how long payments of spousal support should continue beyond the divorce. The guidelines set up a table determining the proposed length of payments based on the length of the marriage. The courts sets the length of payments based on the length of the marriage. For a marriage that lasted for 3 years, the guidelines recommend payments for a period equal to 31% of the marriage. In this case the payments would last for 11 months. The percentage increases for longer marriages. Once the marriage has lasted for 12 and 1/2 years, the period recommended by the guidelines will be 50% of the length of the marriage.

What's most important to remember is that these are guideline and not set in stone. The courts may consider separate property available to support themselves, remarriage, and health or medical needs of a spouse. It the courts feel following the guidelines would be unjust, they can and will deviate from them.

To see the bill in its entirety click here