Spousal Support
Spousal Support
There are two types of Spousal Maintenance
- Temporary: For a finite period of time to provide financial support for one of the parties to gain re-training or re-education to gain employment that will allow them to be self supportive.
- Permanent: Paid permanently until the recipient spouse remarries, one of the parties dies, or the court re-exams the question of spousal support and makes a reallocation based on a substantial change in circumstance.
It is difficult to predict what a court will do in regards to spousal support but they do tend to favor temporary versus permanent support but may make a permanent award for a longer duration of marriage with a large discrepancy in earnings. Spousal support is not like child support that is set up based on a formula
Spousal support is based on a number of factors or criteria
(So it will be done on a case by case basis)
- Length of the marriage
- Earnings of each party
- Opportunities foregone by either party to stay home and raise a family
- Lifestyles of the parties during the marriage
- Value of the property allocation of made during the relationship
- Heath of the parties
- Age of the parties
Steps to determine what the “right” amount is for spousal maintenance
- Create a budget of what your reasonable future expenses will be based on the standard of living during the marriage
- Calculate what your monthly ongoing income will be factoring in deductions for taxes, retirement savings, and child support payments
- Each party must act in good faith and attempt to be gainfully employed appropriate to the level of their educational level and work history.
Tax implications of Spousal Maintenance
- Spousal maintenance is tax deductable to the person who is paying it and taxable to the person receiving it
- We can use the IRS regulations to create money for the parties by moving money from a higher tax bracket to a lower tax bracket which creates less tax liability
- We may rely on financial experts to create a solution with the best tax benefit for both parties
- Unlike spousal maintenance child support payments are not taxable or deductable to either party