In 2019, Spousal Maintenance is changing.
SPOE is always up-to-date with the latest changes in the law that will impact our clients. This change is not an alarming one, but it may impact spousal maintenance if you are divorced and receiving spousal maintenance, are paying spousal maintenance, or are considering divorce where spousal maintenance may be awarded.
What is Spousal Maintenance?
Commonly known as alimony, spousal maintenance may be awarded to a spouse who lacks sufficient property to provide for their reasonable needs, while considering the standard of living that was established during the marriage. Oftentimes, the amount and duration of spousal maintenance is agreed upon between the divorcing couple without going to Court.
What is Changing?
Currently, spousal maintenance paid is a deduction for the payor and is taxable income to the person receiving it. This new tax law does not impact payments under divorce decrees that are finalized or modified prior to December 31, 2018.
What Does This Mean for My Divorce?
This may not affect your divorce, however, this change is important for divorcing parties and parties seeking to modify a current spousal maintenance award because the ability to shift income tax burdens from a higher taxed party to a lower taxed party has been a valuable tool in increasing total cash available incident to divorce. That tool will no longer be available. Because of this change in the law, more and more people with significant income who are contemplating divorce may seek to finalize their divorce before January 1, 2019.
If you are going through a divorce, our family law team at SPOE has the knowledge and solutions to support you. Visit our family law page to learn more.