Divorce isn’t just a severance of the intimate relationship between two people; it is also a severance of their financial relationship. Alimony, or spousal support payments, is a standard option the courts can rely on to safeguard against the financial ruin of a divorcee.
As widespread as spousal payments are, it’s not a topic the average person knows about in-depth. If you’re facing divorce and have financial concerns, here are some important factors about receiving support you need to know.
Alimony is a form of assistance that is legally accessible to every person going through a divorce, but this does not mean that every person is entitled to receive these payments. The fact that your ex-spouse earns considerably more than you do does not mean that you are automatically due support payments.
The court will examine your earnings potential, the length of your marriage, any additional support paid by the individual, such as child support, and even your age when you were married. An entitlement to support is based on a cumulative review of these factors.
According to the Internal Revenue Service, alimony is income, and as a result, it is entirely taxable. Do not make the mistake of assuming this is free money you don’t have to account for. Since you will receive the payments directly from your ex-spouse, understand that you will be responsible for making any tax payments on your own, as well as figuring out how these payments affect your taxes.
You should also recognize that the value of your alimony is added on to any existing income you earn, which could send you into a higher tax bracket. Make sure you are assessing the tax implications to determine whether alimony will create a burden for you.
Spousal support is not up to the payee or the payer. The courts are in charge of determining how long an individual is awarded alimony. For this reason, you should never factor in these payments as long-term fixed income. Although some people are granted permanent payments, this is not always the norm.
The court may decide to award you periodic payments, which means you will receive pre-determined payments for a pre-set period, such as three years. The court can also establish rehabilitative alimony, which is often awarded to someone who currently lacks the ability to earn an income on their own, usually because of lack of employment or education. Rehabilitative alimony is restricted in both value and time.
“Standard of living” is a common phrase used to describe alimony and is used to ensure the payer provides an amount that allows the payee to maintain the lifestyle they were accustomed to during the marriage. This standard of living being referenced is not one that rivals that of a celebrity; it is, instead, a reference to basic needs.
One factor the courts use to determine this standard is the joint household income. For example, if a couple earned a combined annual salary of $150,000, the goal of the court would be to arrange the support payments to delegate $75,000 to each party.
An award in this amount would provide someone with an opportunity to meet their needs, but it would not provide them with the same lifestyle they had when they were earning $150,000 jointly, living under one roof.
When it comes to alimony, no general rule exists. The specific circumstances of each case will determine whether support is warranted and to what degree it is extended, but this information provides you with a starting point. For an in-depth review of your case, contact the Law Office of Helen Allen.