Divorce is typically one of the most financially difficult experiences people can go through. Divorce means that both spouses will need to restructure their respective budgets. It may also mean that one spouse needs to go back to school or start a new career. When one spouse is economically disadvantaged, that spouse may request spousal maintenance in a divorce. Unlike child support, there is no set calculation to determine how much spousal maintenance may be appropriate in a particular case. When going through a divorce, it is therefore very important for both sides to avoid some common mistakes when coming to a settlement regarding spousal maintenance.
One common mistake is assuming spousal maintenance will definitely be awarded. Especially in marriages of relatively short duration, a court will likely be reluctant to grant significant spousal maintenance. Moreover, a court will not automatically grant spousal maintenance just because the requesting spouse makes less than the other spouse. A court will look through a list of factors when determining whether spousal maintenance is appropriate, but the statute does not provide for an automatic award just because one spouse makes less.
Another common mistake is failing to provide specific parameters for when spousal maintenance will end. In most cases, spousal maintenance will not be awarded for the rest of the receiving spouse’s life. With this in mind, when crafting an agreement regarding spousal maintenance, parties should take into account how long it will be appropriate to make these payments and consider putting a fixed end date in the order.
Parties also need to keep in mind that there may be tax consequences regarding their spousal maintenance. The Tax Cuts and Jobs Act made substantial modifications to the federal tax code, including the provision regarding spousal maintenance. Under the new law, spousal maintenance payments are no longer deductible for the spouse making those payments. In addition, the payments are no longer taxable as income to the spouse receiving payments. This removes a significant incentive for a spouse who may be paying spousal maintenance to agree to make these payments, and both spouses should talk with their tax professional about the ramifications before settling.
There are many important considerations when considering a settlement regarding spousal support. Call us today at 651-371-9117 and talk with us about your case.