How to Calculate Maintenance in Wisconsin?

In reviewing our site stats for our blog, one of the most common searches or topic is regarding maintenance and how to calculate maintenance in Wisconsin.  We have other blog posts which deal with the maintenance in general and the standards or law regarding maintenance in Wisconsin.  However, many people are looking for a specific answer about how much maintenance will be awarded in their case.

Unfortunately, that is not an easy question to answer.  There is no formula in Wisconsin for maintenance like there is for child support. Maintenance is a discretionary decision on the part of the court which means that the amount could greatly vary depending on the facts of your case, the judge, the amount of income of the parties, etc.  In fact, what income to use for the parties is probably the most common area of dispute in a maintenance case.

With that said, since so many people are looking for answers on this topic, I thought I would at least try to address it.  Besides income, the two other main considerations when calculating maintenance are the tax consequences and the percentage of net income allocated to the parties.  Maintenance is taxable to the payee and deductible to the payor.  When determining maintenance, we often try to equalize the parties’ net disposable incomes so they both have the same amount to live on, especially in a long term marriage.  In fact, in a long marriage, the presumption in the law is to equalization incomes.  Therefore, there are some spreadsheets and tax calculators that lawyers and judges have developed and most commonly use when trying to determine the appropriate amount of maintenance.

Some time ago, Judge J. Mac Davis from Waukesha County developed the first maintenance calculator in Wisconsin.  When conducting a google search on how to calculate maintenance in Wisconsin, one of the top search results leads you to a website hosted by Attorney Ernesto Romero.  On this website, he has links to various family law forms and to a maintenance calculator which we all refer to simply as “Mac Davis” (click for link).  This calculator is fairly simplistic and automatically calculates taxes on income and maintenance. He updates it each year using new tax rates, credits which might be in effect or other changes in tax laws although he has not updated it for 2013 and may not do so again. To run the calculations, you need to input tax status (individual, joint, head of household), the number of exemptions, each parties’ annual income and other requested relevant information.  Based upon these numbers, the program calculates the net monthly disposable income of each party.  By then inputting various maintenance amounts (annual), you can attempt to arrive at a maintenance amount which most closely reaches the percentage of monthly income allocation that is appropriate, whether it is 50/50 or not.

Since the first calculator was developed, others have followed.  The two most common other calculators are called Fin Plan and a newly revised and much more complicated Mac Davis format created by Garrick G. Zielinski CFP, CDFA, Divorce Financial Solutions, LLC (click here for download).  Each attorney and judge has their own preference.  Each calculator has their own strengths and weaknesses.  The original Mac Davis version is free of charge. Mr. Zielinski’s version is available for purchase.  Fin Plan ,which does also have other divorce planning functions, must also be purchased.

Mr. Zielinski’s calculator (called 2013 DFS TaxCalc) has just come out recently but more and more attorneys and judges are using this now.  It provides much more information, allows you to also calculate child support, takes into account more complicated income situations than the original Mac Davis (such as non-taxable income) and allows you to plug in a target percentage of income (i.e. 50/50) which then automatically calculates maintenance for you.  The original Mac Davis requires some hand calculations to convert monthly to annual amounts and a certain amount of guessing to get you to your target percentage of net income allocation.

WARNING: these calculators are not for amateurs!  You might use Mac Davis to give you a general idea of what you might expect for a maintenance order.  However, there are many aspects which must be taken into consideration when running maintenance calculations.  You will need the assistance of an experienced divorce attorney and, possibly, a financial planner to arrive at a maintenance amount that is in your best interests and considers all possible consequences, tax or otherwise.

To discuss your maintenance case in detail with one of our experienced divorce lawyers, please call us for a free initial office consultation at 414-258-1644.  You can also visit our website or look at our other blog posts regarding maintenance (see category link below) for more information.

Teri M Nelson

Maintenance Disputes in Wisconsin Divorce

Maintenance (or alimony) is one of the issues we most often disagree about in a divorce.  One of the main reasons for this is that there are no definitive guidelines in Wisconsin about how maintenance is determined.  If there are maintenance disputes in a Wisconsin divorce, how are they resolved?

Maintenance is spousal support which is set as a certain amount per month for a period of time which can range from months to years to indefinite.  Maintenance is taxable to the person who receives it and deductible to the party who pays.  Either the Husband or the Wife can be ordered to pay maintenance in Wisconsin.  And, fault is not a factor the court can consider when awarding maintenance.

In some cases, maintenance can be easy.  When there is a long term marriage and a disparity between the parties’ incomes, maintenance is presumed to be appropriate.  Generally, the longer the marriage, the longer the term of maintenance that is awarded.  The goal of maintenance is often to equalize the parties’ net incomes.  There are several financial calculators and spreadsheets that attorneys and judges use which calculates the net disposable income of a party (after taxes).  Since maintenance is taxable/deductible, we can determine through these programs exactly what is the appropriate amount of maintenance needed to accomplish the goal of equalizing incomes.

So, why do so many people fight over this issue then?  There are many reasons but one of the primary reasons is income.  What income is appropriate to use when calculating net disposable incomes and the amount of maintenance?  We often have situations where a party (generally the Wife) has not been employed for many years.  She may have been a stay-at-home mother or only worked part-time.  Or, sometimes we have a situation where someone lost his or her job and either cannot or will not obtain comparable employment.  Depending on the reason for the job loss and/or the reason for the continued unemployment, this also can create an issue.

The courts generally find that (a) someone must be employed full-time and (b) they must be employed at their highest capacity.  There are always exceptions to this, of course, but the circumstances would be unusual.  Since the term “highest capacity” is very subjective, this creates maintenance disputes.  If an individual is not currently employed at their highest capacity, the court can “impute” them income which it will then use to calculate support and maintenance.

In order to resolve those maintenance disputes, we have a variety of tools available to us as attorneys.  For example, we can research an individual’s earnings history through tax returns or social security earnings statements.  Looking back can provide the court with information as to the highest earnings that individual has had in the past.  If an individual’s income varies, sometimes the court will average his or her income over a period of time.

We can also obtain a vocational evaluation for an individual.  There are vocational experts who will interview a party, look at their earnings history, examine their background, education and experience and then arrive at an opinion as to what that person can or should be earning.  The court will then consider this information when making its determination as to what income a person should be imputed.

Once we calculate or determine income, disputes also arise in maintenance as to how much maintenance should be awarded.  For example, one issue is whether incomes should be equalized or how much disposable income should be allocated to either party.  This depends on a wide variety of factors and, therefore, creates many areas for disagreement.  Primarily, the court will look at available income, budgets/bills, standard of living, property/debt division and child placement/child support in determining how much maintenance to award in a divorce.

The other main area for maintenance disputes is how long maintenance should be awarded or the “term” of maintenance.  The general rule of thumb is half of the length of the marriage.  However, this is not always true and again depends on a wide variety of factors such as the length of the marriage, age, earning capacities of the parties, education and work history of the parties, health problems, standard of living, etc.

Since maintenance is a discretionary decision of the court and based on a wide variety of factors, there are many potential areas of dispute.  The attorneys at Nelson, Krueger & Millenbach, LLC will attempt to resolve your maintenance issue in a way which is most favorable to you.  However, in the event that is not possible, you will benefit from our knowledge of the law and of how the judges typically rule in these types of case and from our experience in litigating these issues.