Maintenance Between Divorcing Spouses

By Kristen Halliden

Some people are under the misconception that the State of Indiana does not allow maintenance (formerly known as alimony) between divorcing spouses. That is not actually accurate. The State of Indiana, under IC 31-15-7-2, allows a Court to order one spouse to pay maintenance to another spouse if one of three conditions is met: 1) The party who is to receive maintenance is physically or mentally incapacitated; 2) if the party who is to receive maintenance is caring for a disabled child and does not have sufficient property to provide for his/her needs; or 3) a party may receive what is referred to as “rehabilitative maintenance.” Rehabilitative maintenance cannot exceed a period of three (3) years and is for the sole purpose of allowing the spouse who receives it to seek additional education which would help that spouse to obtain appropriate employment.

That being said, parties to a divorce often enter into an agreement for maintenance payments for a variety of reasons – whether it is a disguised property settlement or because of a guilty conscience. Parties who include a maintenance provision in their settlement agreement should be aware that there are tax consequences to both parties. The party paying maintenance deducts the maintenance on their tax returns and the party receiving the maintenance must claim the income on their tax returns. When considering maintenance provisions in a settlement agreement, both parties should seek the advice of accountants for tax planning purposes.

Parties should also be aware that as a general rule, maintenance provisions are not modifiable unless one party can show a substantial and continuing change of circumstances such that enforcement of the current order would be unreasonable. However, a Court cannot modify a maintenance order that was entered into between the parties if the Court could not have ordered maintenance in the first place. That is, if the parties decided to structure a property settlement and the paying party later reneges, the Court would not be able to later modify the award. This is because the Court would not have been able to order the maintenance award in the first place as an award of property does not fall within one of the exceptions of I.C. 31-15-7-2.

So while the State of Indiana does allow maintenance (or spousal support or alimony) it does not make it easy to get it.