In some marriages, one spouse may be financially dependent on the other. When this is the case, the court will usually award the no-income or lower-earning spouse alimony. Alimony, also known as spousal support, is a type of court-ordered payment that provides financial support to a dependent spouse before, during, and/or after a divorce. Nowadays, inflation has increased the cost of living significantly. Essentially, inflation is an increase in the general prices of goods over time. You may expect inflation to affect the economy, however, you may not expect it to affect your divorce. However, inflation can affect your alimony award. If you are awarded or required to pay alimony, you may wonder whether the court’s award will be adjusted for inflation. Keep reading to learn whether alimony is adjusted for inflation in Tennessee and discover how a proficient Memphis, Tennessee Alimony Lawyer can help you.
How can inflation affect alimony?
Firstly, the court will evaluate several factors to determine whether alimony should be awarded. Primarily, they will look at the dependent spouse’s actual need for financial support and their earning ability. In addition, the court will look at the other party’s ability to afford these types of court-ordered payments. If the court deems it reasonable, it may award the lower-earning spouse alimony. When awarded alimony or ordered to pay it, you may wonder whether alimony is adjusted for inflation as the amount granted is provided to cover the cost of living. As a result of inflation, the amount of alimony you receive monthly may not cover your cost of living. If the cost of living increases, an existing award may not be enough to cover necessary expenses which can negatively affect your overall financial security. With that being said, when the court does not automatically adjust alimony for inflation, you may request a modification to change the amount of the payments by the current inflation rates.
What is the Cost of Living Adjustment (COLA) clause?
When awarding alimony, the court may order a Cost of Living Adjustment (COLA) clause which automatically sets the amount of alimony to reflect inflation rates to ensure the amount can cover your cost of living. If a COLA clause is not included when alimony is awarded in your divorce, you may request this modification. Essentially, the COLA clause will reappraise alimony based on the current cost of living annually to ensure the amount can cover necessary expenses. With that being said, if the cost of living increases, the amount of your alimony payments will also increase. The COLA clause is extremely beneficial as it can help you avoid having to file a request to modify an existing alimony award for future increases as a result of inflation.
For more information on how inflation can affect alimony, contact a seasoned Memphis, Tennessee alimony lawyer. Our firm is prepared to help you today!