Spousal support, also called alimony, are payments made from one spouse to another after divorce. Shawn Leamon, MBA, CDFA offers insight into the subject of spousal support.
The overall purpose of spousal support is to lessen the burden on the spouse who earns lower wages than his or her former spouse. An amount of money is awarded to one of the spouses per a written agreement, or by a court-mandated decision.
During a marriage, one spouse oftentimes sacrifices a career to stay home and raise children. In such a case, whoever has given up his or her career is obviously unable to continue the standard of living that existed during the marriage. As a result, spousal support is awarded.
Can You Make Spousal Supports to a Third Party?
Yes. You can make payments to a third party on behalf of an ex-spouse and qualify for spousal support. For example, payments for medical expenses, taxes, and tuition can still qualify as spousal support. Payments must be made in cash, so transferring property or providing a service for payment does not count as spousal support in the eyes of the IRS.
How is Spousal Support Calculated?
Every state is different, and each divorce is unique. In fact, the court system has a wide range of criteria when deciding whether spousal support will be awarded. Typically, many factors are considered, including the financial condition of both parties, the duration of the marriage, the standard of living while the marriage existed, physical and emotional issues, and the time that is needed for the recipient to be self-supporting.
Can You Change Spousal Support?
Sometimes life happens, and your circumstances change. The spouse paying support may lose their job, become disabled, or retire. If these circumstances change, it can be grounds to change spousal support. Spousal support can be terminated if the spouse receiving support remarries or (in some states) moves in with someone else. Spousal support can even change if there is a change in child custody (separate from changing child support).
Even though it is possible to change spousal support, it will not be easy. You will be starting another legal battle, which can get very expensive. If you want to pursue that option, you should have a compelling reason for justifying a change. You will not be able to guarantee the outcome, even if you have a convincing case. If you are the person paying spousal support, you should accept that it may not be possible to change it. If you are receiving spousal support, make sure you are getting enough to live on, and budget accordingly.
Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrende Global, with offices in Dallas, New York and Hanover, New Hampshire. His website is DivorceAndYourMoney.com. This article can be found on his site at this link: https://www.divorceandyourmoney.com/blogs/is-alimony-taxable