Savings as a Component of Alimony

Let’s assume two fact patterns.  In the first, the couple saved 20% of their income each year.  In the second, the couple saved nothing.  Each couple is now getting divorced.  Which couple is more likely to have savings added in as a component of alimony?

The not obvious answer is that the couple who saved during the marriage is really not more likely to have savings included in the alimony formula.  The key purpose of adding a savings component to an alimony award is for security in the event alimony may be modified downwards at some point.  It is also to anticipate for the eventual time when the paying spouse retires and/or alimony is terminated.  At that time, savings will be needed to continue support for the spouse who needs the support. 

While the marital lifestyle is reviewed to help determine which “lifestyle” expenses should (and can) be maintained after the divorce, savings as a lifestyle expense really should should be primarily viewed as an expense more akin to insurance that ensures a stream of support.

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