In some cases, a spouse the court orders to pay spousal support may wish to simply pay the full alimony amount up front – a “lump sum” alimony payment. They avoid the frustration of making a payment every month, and both parties can move on.
Spousal support, or alimony, can be a contentious matter in Michigan divorces. Often, one person feels entitled to this financial support and the other person has every intention of avoiding this responsibility, which makes it exceedingly difficult to reach agreements.
The transition out of marriage is a difficult one for most people. After all, it is a challenge to untangle lives, rebuild a sense of stability and start this new chapter. This is especially true for a person who was financially dependent on his or her spouse.
The recent tax law, the Tax Cuts and Jobs Act, changed the federal deductibility of alimony. In divorces finalized during 2018, alimony is tax-deductible for the payor and taxable income for the recipient. On Jan. 1, 2019, however, the new tax law changes that. For divorces finalized after that date, alimony will be neither tax-deductible nor taxable income. This applies to all payments the IRS considers alimony.
The new tax bill and its implications on divorces might have caused confusion for many couples in Michigan and other states. Those who were considering divorce might have tried to get it done before the New Year. However, the new alimony tax laws will only apply to divorces that are finalized in 2019. Authorities say that not only could it create timing battles between divorcing spouses but also their legal counsels.
Divorced people in Michigan are often dependent on the spousal support they receive from a former spouse -- even if it is only until he or she has established a regular income. However, payments may be withheld, leaving the question of possible enforcement. That depends on whether the court ordered alimony to be paid, and whether it is malicious withholding or the inability to pay due to job loss or other changed circumstances.
There are plenty of issues that any divorcing couple needs to handle before they can finalize they divorce. One of the issues that often comes up is alimony, a critical form of compensation that is awarded in certain cases. The determination for alimony is based on numerous factors, such as the length of the marriage, the financial means of the spouses involved, and the age of the spouses, among many others.
In the eyes of the court, both parties should be able to continue to sustain their lives after a divorce. For this reason, one party may need to continue to provide financial support for the other in the form of alimony.
Many Michigan residents are currently battling it out with soon-to-be former spouses in family court. For some, a major topic of contention is who will live with the children involved in a particular situation; for others, money is a high priority issue specifically, whether either spouse is entitled to alimony. There are no set-in-stone laws regarding this type of post divorce financial support.
The decision to end a marriage can be a difficult one to make. Many times, one spouse earns more than the other; sometimes one of the spouses has been out of the workforce for a number of years. In situations such as these, divorce may appear to be a financial catastrophe for the individual. Fortunately, when deemed appropriate, it is possible for alimony, or spousal support, to be granted by the Michigan courts.