Navigating a high net worth divorce? Key to a fair settlement is understanding how alimony works. This guide delves into the essentials of alimony under North Carolina law, highlighting the factors that influence its determination and duration. Whether you are the payor or the payee, our insights from Jetton & Meredith’s experienced attorneys will help you maintain your lifestyle and negotiate confidently.
What is alimony?
First, it is important to understand what alimony is and why or how it is awarded to a spouse. In North Carolina, alimony is awarded pursuant to North Carolina General Statutes § 50-16.3A. The alimony statute specifically states sixteen factors that the Court shall consider when determining the amount and duration of awarding alimony. See also Alimony Is Decided by Many Factors. Alimony is the payment of money from what the court labels as the “supporting spouse” to the “dependent spouse”. The purpose of this payment is to help the “dependent spouse” maintain their accustomed standard of living as they had during the marriage. See How Long Do I Have to Pay Alimony? This accustomed standard of living is different in each individual marriage, and thus, there is no single formula or number that the Court uses to dictate an award of alimony.
What is your spouse’s earning capacity?
Generally, in a high-asset divorce, alimony is almost always sought after. Thus, it is important to determine your spouse’s relative earnings and earning capacities, as well as the standard of living during the marriage, among other factors.
Evaluating High-Net Worth
While there is no exact number that determines what “high-net worth” is, as a general rule, high-net worth can mean when one or both spouses earn more than $300,000 per year, or more than $25,000 per month. Another indication of a high-net worth marriage is having a total marital asset value exceeding one million dollars. In North Carolina, it is a requirement that each spouse completes both a Financial Affidavit, as well as an Equitable Distribution Inventory Affidavit. Both of these documents will assist you and your attorney in determining whether your marriage can be classified as “high-net worth.”
Defining Accustomed Standard of Living
What is an accustomed standard of living? Accustomed standard of living refers to the lifestyle lived by either or both spouses during the marriage. This can, and often does, refer to the social and economic factors that you and your spouse engaged in during your marriage. If you are finding yourself navigating through a high-net worth divorce, you may have become accustomed to a high standard of living.
What Can Be Included in “Standard of Living”
A high standard of living can include extravagant vacations, how often you or your spouse dined out at restaurants, the types of restaurants visited, whether you or your spouse were members at clubs, gyms, or other organizations, the hobbies you and your spouse engaged in, the types of entertainment you and your spouse engaged in, and even the size and location of your residence.
Some specific examples of a high standard of living can include some of the following:
- Private Country Club Membership
- Vacationing out of the Country
- Dining at 5-Star Restaurants
- Hiring a private driver
- Flying privately to destinations
- Owning multiple properties
- Attending exclusive events
Stay-At-Home Spouse and Alimony
Another important factor when concluding on the accustomed standard of living is whether one spouse was relieved from work by the other spouse during the marriage. In many instances where one spouse makes a significant income, the other spouse may cease working and take care of the home or the children.
- Dependent spouse had the ability to work
- Whether dependent spouse is caring for the children full-time
- Education level of the dependent spouse
- How long has the dependent spouse been out of work
- Many more factors
A dependent spouse should determine with their attorney whether any or all of these were present during the marriage. If any of these were present during the marriage, the purpose of alimony is to assist the dependent spouse in continuing this standard of living.
Duration of Alimony in High-Net Worth Divorce
If the Court awards alimony to the dependent spouse in a high-net worth divorce, the next thing the Court should decide is the duration of the alimony payments. In North Carolina, generally alimony is awarded for half the length of the marriage, however, other factors can alter this general rule. See How Long Do I Have to Pay Alimony?
Effect of Infidelity on Alimony
Another factor to consider when going through a high-net worth divorce is whether infidelity was present in the marriage on the part of either spouse. Infidelity is a bar to an award of alimony, if the dependent spouse engaged in an affair during the marriage. Further, in the case where the supporting spouse engaged in an affair, alimony will likely be awarded*. See Marital Misconduct Impact on Alimony.
Discuss Your High-Net Worth Divorce with an Attorney
In high-asset divorces, the same statute applies, so it is important to speak with an attorney that is knowledgeable on all relevant factors specifically stated within the statute. Our divorce attorneys at Jetton & Meredith have the knowledge and skill you need to assist you through your high-net worth divorce. Whether you and your spouse are able to settle your divorce case out of court through a separation agreement or through mediation, or if you need a firm advocate to assist you in court, call Jetton & Meredith to speak with one of our divorce attorneys today.