What Is the Alimony Formula in Colorado?
Under Colorado law, specifically Colorado Revised Statutes 14-10-114, one party to a marriage can be required to provide financial support for the other spouse. This spousal support can be ordered both while the divorce case is pending and for a time period after the decree of dissolution of marriage enters. Most people are familiar with the common term, “alimony.” Under Colorado law, alimony is called “maintenance.”
Starting with amendments to existing statute in 2014, C.R.S. 14-10-114 was changed with the adoption of a maintenance formula and a time table for duration of payments correlated with the length of the marriage. Prior to 2014, there was a formula applicable only at the temporary orders phase of a divorce case and applicable only to families making $75,000 combined adjusted gross income, or more. The 2014 change made the formula applicable to all couples, with marriages of 3 years or more, with combined adjusted gross incomes of under $360,000 per year and applicable to ongoing maintenance after the divorce decree enters.
Going to the specific maintenance formula, the formula starts with ascertaining 40% of the higher income earning party’s gross monthly income. The next step in the formula is to ascertain 50% of the lower income earning party’s gross monthly income. The 50% is then subtracted from the 40%. For example, if the wife makes $10,000 per month, 40% would be $4,000. If the husband makes $5,000 per month, 50% of his income would be $2,500. Subtracting the $2,500 from the $4,000, the difference is $1,500 per month. However, the analysis doesn’t stop there. Also, if the difference is a negative number, the analysis stops.
In cases in which that number is a positive number, the next step is to do a statutorily required adjustment to arrive at the final figure. Under C.R.S. 14-10-114, the alimony recipient is only entitled to 40% of the combined adjusted gross income of the parties. As such, the next step is to determine what 40% of that income is. For example, if the wife makes $10,000 per month and the husband makes $5,000 per month, the calculation would be $15,000 times .40, which would equal $6,000. Under this scenario the husband would only be entitled to $1,000 in monthly maintenance, as his $5,000 income, plus the $1,000 in maintenance, would get him to the 40%. Though the initial step in the formula generated a figure of $1,500 per month, the statutory adjustment reduced that amount down to $1,000 per month in alimony.
The intent of the Colorado legislature in enacting the guideline formula was to make the issue of determining maintenance in divorce cases more uniform and simple. Prior to the 2014 amendments, maintenance was much more gray and highly subjective, depending on the view points of the judge presiding over the case. The other intent of the legislature was to reduce actual litigation in court regarding the issue of alimony. If each side knows what the court is likely to do with the formula there is much more likelihood that cases regarding alimony will settle.
It should be noted that application of the formula is not mandatory. Rather, statute indicates that judges are required to consider the formula. If they do not apply it, they are required to set forth in their orders why the elected to forego its application. It should also be noted that the formula is technically not applicable to families with a combined adjusted gross income of $360,000 or more. In those case, parties are still operating under the old standard of relying on the judge’s discretion. That discretion does allow judges to still apply the formula to higher income cases.
Given that the formula is not mandatory, Colorado divorce attorneys should still be prepared to analyze and argue the actual need for alimony, which will entail assessing the potential recipients actual, reasonable financial needs.
Finally, though the formula creates some uniformity in resolving alimony issues, the chance for litigation still exists tied into income and what figures should go into the formula. Arguments can arise related to what counts as income and what does not. Arguments can also arise related to whether one party is voluntarily underemployed or unemployed.