Start With the Budget: The Key to Alimony in a Nevada Divorce
When most people begin the divorce process, they tend to focus on divorce lawyers, court papers, and strategy. But one of the most important first steps has nothing to do with legal strategy and everything to do with numbers; your monthly budget.
In Nevada, where alimony is not calculated by a strict formula, creating a clear and realistic monthly budget is often the most crucial factor in determining whether alimony will be awarded, and if so, how much and for how long. Let’s look at a real-world case to see why budgeting is the foundation of any alimony discussion.
Calvin and Darcy’s Divorce
Calvin and Darcy M. are looking for a No Fight Divorce. They have been married for 15 years. This is a second marriage for both. Calvin is 59 years old; Darcy is 56. They have no children together. Both work for the post office. Calvin earns $5,000 per month from his job and receives an additional $4,000 monthly as a 100% disabled veteran. Darcy earns $5,600 a month.
They purchased a home eight years ago and now have approximately $311,000 in equity. No one disputes the equity or that it will be split equally. They’ve agreed to keep their own vehicles, their own bank accounts, credit cards, and pensions.
The only unresolved issue is whether Darcy can afford to refinance the mortgage to buy out Calvin’s half of the equity. She is going to need monthly alimony (aka spousal support) to afford the mortgage. So, the only remaining issue is alimony.
Darcy hired us to begin the divorce, and her first question was, “Where do we start?” The answer was simple: We start with the budget.
Nevada Law on Alimony: No Formula, Just Factors
Nevada law provides judges with a list of factors to consider when determining whether alimony should be awarded. These include:
- The length of the marriage
- The financial condition of each spouse
- The receiving spouse’s need for support and the paying spouse’s ability to pay
- The standard of living during the marriage
- The age and health of both parties
- The career before the marriage and during the marriage of the spouse who would receive alimony
- The education or training needed to obtain appropriate employment
What’s missing from this list? A formula. Unlike the child support formula, there’s no set calculation for alimony in Nevada. Alimony in Nevada is based mostly off of case law with the most popular case being Kogod v. Kogod. This case talks about a spouse’s need for alimony and a spouse’s ability to pay alimony being two of the most relevant factors. That means budgeting becomes the best way to give both spouses (and judge) a foundation for determining a fair monthly amount.
Why the Budget Matters So Much
If Darcy wants to ask for monthly alimony, we first need to know what she needs each month to cover her reasonable expenses. That’s the starting point for Darcy. Without that number, any alimony amount request is just a guess.
This is especially true when she’s considering refinancing the mortgage. Can she afford a higher monthly payment? Will she still have enough left over for groceries, utilities, insurance, and car payments?
A clear budget answers those questions. It shows the court what she’ll have coming in each month (income) and what she’ll need to spend (expenses). Only after seeing the monthly negative (or surplus) can we figure out whether alimony is justified, and if so, how much.
The budget is also the starting point for the court because Darcy must show an economic need to be awarded some amount of alimony. If she doesn’t have a need for spousal support the judge is not going to award it.
How to Build a Post-Divorce Budget
Creating a monthly budget doesn’t have to be complicated. In fact, the will require both to complete a Financial Disclosure Form (FDF) which lists all the numbers for creating a monthly budget. Here’s how we walk our clients through the budgeting process.
1. List All Income Sources
Start with your post-divorce income. For Darcy, that’s $5,600/month from her job. If there will be additional income, like rental income or pension income, she should include that too.
2. Estimate Monthly Expenses
List realist monthly expenses you will have after the divorce. Be realistic. You’re not planning for a lean college-budget lifestyle, but you’re also not splurging. Focus on:
- Mortgage or rent (including potential refinance numbers)
- Utilities (gas, electric, water, trash)
- Groceries
- Auto expenses (gas, insurance, maintenance)
- Health insurance and medical expenses
- Cell phone/internet
- Credit card or loan payments
- Clothing, personal care, and miscellaneous
Use actual bills where possible. If not, use average numbers from your bank or credit card statements.
3. Adjust for New Realities
This is a post-divorce budget. It will likely differ from what you were spending as a couple. There may be some savings from separating households, but there may also be increases like a higher mortgage, or health insurance.
4. Compare Income to Expenses
Once you’ve totaled your expected monthly income and expenses, see where things stand. Is there a shortfall? If so, that may support a request for alimony. If there’s a surplus, that may eliminate the need.
5. Darcy’s Budget
In Darcy’s case, if her monthly expenses come to $6,800 and her income is $5,600, she is justified in requesting $1,200 a month in alimony. We know this by doing a budget. Her budget shows her monthly economic need. That’s not all the court looks at. They will also look at Calvin’s monthly budget and decide if he has the ability to pay Darcy $1,200 a month.
6. Calvin’s Budget
Calvin’s budget is just as important as Darcy’s. His monthly income is $9,000 a month. He monthly expenses are also around $5,600. He has a surplus of $3,300 a month. He therefore has the ability to pay $1,200 a month.
When clients with financial questions ask us, “Where do we start?”, the answer is simple. Start with the budget. That’s not just financial advice. It’s legal strategy. Alimony is not about emotions, it’s about what you need per month to pay the bills and what your spouse can afford to pay.
Contact Right Divorce Lawyers for Alimony Advice
Navigating alimony issues can be complex. Consult with one of our attorneys get an idea on how much alimony you might be entitled to, or how much you might pay. Schedule a free consult on our home page or call us to schedule a consult.
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