Tennessee courts may award four different types of alimony: (1) in futuro (often called "periodic"), (2) in solido (a.k.a. "lump sum"), (3) rehabilitative and (4) transitional.
The decision on whether alimony will be awarded will turn on the court's consideration of multiple factors found at Section 36-5-121(i) of the Tennessee Code. The factors with the most weight are need and ability to pay. If alimony is appropriate, the court's goal is generally to craft an equitable ("fair") solution under all the circumstances.
Alimony in futuro is the least favored form of alimony, but is frequently seen when one spouse has a severe economic disadvantage and cannot reasonably be expected to generate sufficient income in the future. Stay-at-home parents who have been out of the work force for a long time or the physically disabled are oftentimes prime candidates for this type of alimony. If awarded, the amount of this alimony can be modified if there is a later "substantial and material" change of circumstances for either spouse. There is a presumption a substantial and material change has occurred when an ex-spouse starts living with a third party. The obligation to pay ends automatically following the death or re-marriage of the recipient.
Alimony in solido is the use of marital assets to support a needy spouse. The court can divide the assets in such a way that the goal of alimony is achieved, which means the parties should not assume there will simply be a 50/50 split. These awards are usually not modifiable. They may sometimes take the form of periodic payments from one spouse to the other. If payments are made, it should be made clear in the divorce agreement they are to be made for a limited period of time and the amount to be paid should be specific. Otherwise, there is the risk these payments will be considered alimony in futuro.
The purpose of rehabilitative alimony is almost self-explanatory in its name. This type of alimony is awarded to give a spouse temporary support needed to prepare him or herself to become economically self-sufficient. The award can be modified if there is a "substantial and material" change in circumstances, but the parties can agree to make it non-modifiable. It terminates upon the death of the recipient spouse, unless the parties agree otherwise.
Transitional alimony is intended as temporary aid to a spouse who faces the harsher economic consequences of a divorce. It should be limited to a specific period of time. Recent case law strongly suggests it should not be awarded for more than 8 years. It is generally not modifiable unless the parties agree otherwise, the court includes a modification clause in the original divorce decree or the receiving spouse moves in with a third party. The obligation to pay ends automatically if the receiving spouse dies. It also ends automatically if the paying spouse dies, unless the parties otherwise agree. One small benefit to the paying spouse is that transitional alimony payments can be deducted from income on tax returns. On the flip side, the receiving spouse must report transitional alimony as taxable income.