One of the most common questions when going through a divorce is about spousal support. Spousal support is often called alimony, and it is a word that many people hear but don’t quite understand. When you hear about divorces involving famous people, most often there are large amounts of money named. You may hear about alimony payments in the millions when a movie star divorces, or in cases of people who are very rich. But what if you or your spouse don’t earn more than six figures? Does alimony still come into play? The answer is simply that it could. Alimony is based on the financial situation of each spouse.
In Massachusetts, alimony can be awarded to either spouse, and is gender neutral. The judge bases the decision on several factors such as –
- How long the marriage lasted
- The age and health of each spouse
- The income of each spouse
- Employability or employment of each spouse
- Any training required for one spouse to find employment
- The contribution of each spouse to the marriage
- The standard of living during the marriage
- Any lost opportunity of a spouse during marriage
While there is no set formula for determining spousal support, there are laws in Massachusetts that require that spousal support not exceed the recipient’s need or up to 35% of the difference between the income earned by each spouse. The laws do allow for exceptional cases, where the judge can make alternative settlements.
Another factor that spousal support can be based on is child support. If the divorce involves child support being paid, the child support will be paid before any spousal support can be considered. While one spouse can receive both child support and spousal support, the amount of child support paid will be deducted from the paying spouse’s income. In some cases this will reduce the income to a level where spousal support is not awarded.
Special consideration should be taken when negotiating alimony and their tax implications due to the recent changes in the Tax Reform Legislation. Historically, alimony was deductible to the payor and the recipient paid income tax on the money. Divorces after December 31, 2018, alimony will no longer be deductible for the payor, and the recipient will no longer owe taxes on the support paid.
If you have questions about the new tax laws and how they will impact divorcing couples, please contact our office for a free initial consultation.