Alimony…not far from Acrimony

By Thomas Seder | Divorce Planning

Jun 13

Alimony...not far from Acrimony

Alimony issuesA major issue between divorcing and divorced spouses is that of spousal support, or alimony.  The issue is freighted with significant financial and emotional ramifications.  The aim of spousal support is to provide needed economic support to the lower-earning spouse.  It takes into account a variety of factors, including length of the marriage, ages and health of the parties, earning capacity, assets of the parties, needs of the recipient, and the payor’s ability to pay.

In 2011 the alimony laws in Massachusetts underwent significant reform .  Prior to this enactment of alimony reform, alimony was “forever”, even for short-term marriages.  Under the old laws, retirement of the payor didn’t necessarily provide relief from the payor’s having to continue support payments indefinitely.  You can get a summary of the new law here.

Not surprisingly, there are countless horror stories regarding alimony and how it has contributed to financial and emotional ruin.  The Alimony Reform Act of 2011, which took effect in March 2012, was intended  to bring more fairness to the alimony calculation and is highlighted by the following:

(1) it ends payments for life;

(2) it ties the duration for paying alimony to the length of the marriage;

(3) for long term marriages (more than 20 years), alimony ends at Full Retirement Age , as defined by Social Security (though the judge has discretion in awarding indefinite alimony in long-term marriages); and

(4) alimony may be terminated, reduced, or suspended when the recipient spouse lives with another person for at least three months (the “cohabitation” issue).  

To get your comprehensive summary of the Massachusetts Alimony Reform Law click here.

One conclusion gleaned from the legislation’s focus on limiting the duration of alimony is that it becomes more critical for the lower-earning spouse to find employment, in order to be self-sufficient when alimony ends.  

Child support in many ways is tied to alimony .  For example, in cases where the combined incomes of divorcing spouses is above $250,000, there may be no alimony granted…the only form of support may be child support.  Also, depending on the respective tax brackets of the divorcing parties, it may sometimes be beneficial to both to consider using “Unallocated Support”, which is essentially re-characterizing child support as alimony.

While Alimony Reform does much to clarify certain issues, there still remains room for interpretation, and different judges may adopt very different positions on the same fact patterns…one should bear in mind that nothing is etched in stone.  Nonetheless, familiarity with these guidelines should help to point you in the right direction on the subject of alimony.  The issues are complicated and intertwined and should be reviewed with an attorney, or divorce financial planner.  However, to start our handy reference may suffice!

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About the Author

Thomas E. Seder is a Wealth Strategist with Insight Financial Strategists LLC. He specializes in retirement planning and divorce financial planning.