A spouse’s financial future may change radically when their marriage is over, and they lose financial support. Negotiating for spousal support, commonly known as alimony, requires preparation.
Factors like the payor and payee’s gross and net salary, their assets and marriage length help determine whether there is support and its length. A spouse’s financial situation during marriage and after separation are other important factors. Awareness of the gap between those two situations can help determine reasonable support.
Developing an accurate budget of daily expenses is an important step. This will help present a picture of what was spent during marriage and future financial needs.
Determining spousal support also requires consideration of the entire divorce financial situation. These factors involve the role that child support and property division play in a spouse’s financial situation.
Many stay-at-home spouses are concerned about seeking divorce because their spouses threaten to take all their assets. Even though this is improbable, spouses have the obligation to become financially independent.
Courts may award temporary maintenance payments. This support can help spouses transition back into the work force.
Congress changed long-existing federal tax treatment of spousal support. Spousal support for a divorce entered after Dec. 31, 2018, is no longer deductible for the payor spouse. However, the recipient spouse does not have to report payments as ordinary income.
There are various options with creating the final settlement. This can include a single lump-sum payment, recurring monthly payments or a property transfer.
Payments can also be changed over time. If the payor anticipates that cash flow will be low for the first few years after marriage but improve later, payments can be lower for the first few years but grow over time.
Lump sum payments may be paid right after divorce or later. Spouses who have insufficient assets to pay support but have equity in a home can use a cash-out refinance on the home to pay a lump sum settlement. Or support payments may be reduced in exchange for different marital assets.
Up front lump sum payments have advantages. It may act as a precaution when the payor spouse has changing income or will try to evade payments. Also, spousal support ends when the recipient spouse remarries or cohabitates, and an early lump sum payment will provide support before this can occur.
Attorneys can help develop options that address your needs and comply with Michigan law. Lawyers can assist you in negotiations and legal proceedings.