Think About Your Marital Assets: If you are thinking that you will need financial support, carefully consider your marital assets when weighing your need for the alimony. Assets, such as the marital home may need to be sold in the process of the divorce. If you wish to remain in the house and be “bought out” by your soon-to-be ex, it is important to determine if that is financially practical for you. It may seem like a windfall to have your spouse agree to give up half of his or her equity in the house, but remember that equity is not the same as receiving liquid cash. If you house is in need of repairs or if you have a large mortgage that you will be assuming, factor in these costs first, before making any decisions. Depending on your finances, a spousal support arrangement with regular monthly payments may make more sense for you than simply getting one-half of the equity of your home.
Learn About the New Alimony Reform Laws in New Jersey: In 2014, New Jersey instituted a large number of spousal support reform laws. One of the changes made was eliminating permanent alimony altogether. Now, when a marriage lasts fewer than twenty years, the length of spousal support cannot exceed the length of the marriage, unless there are exceptional circumstances proven to a judge. Even marriages lasting longer than 20 years do not command permanent alimony any longer.
Now, these longer marriages can have what is known called “open duration” spousal support with the understanding that upon retirement, alimony ends. It is very important to make sure that if you are reading about spousal support, you are reading the most recent law. If you are considering asking for support and you have a relatively short marriage, be prepared to make a strong argument why you need the support and work with your family law attorney to look at the types of alimony that may be availble to you. For example, if you left your career to stay home and raise your children, rehabilitative alimony while you return to school or get retraining for a new job may make sense for you.
Consider your taxes: For most divorced couples, any spousal support that is received is considered income for tax purposes, so you must claim any spousal support payments on your tax returns. On the other hand, alimony payments are tax deductible for the paying ex-spouse. When thinking about alimony, take time during negotiations to calculate how alimony may change your tax bracket and possible taxes due. If the proposed support pushes you into a higher tax bracket, consider swapping some percentage of your support for non-taxable alternatives such as having your spouse make direct payments towards home upkeep related expenses. Always consider talking to you tax or financial planner for specific advice on you possible tax scenarios.
Talking to a knowledgeable attorneys about your financial future can help you find peace of mind while you look towards your future. It is always best to weigh the pros and cons of all issues in your divorce, including spousal support and how any of your decisions, from custody to equitable distribution of property can affect you going forward.
If you want more information about spousal support or divorce, please contact us or call us at 888-888-0919 to schedule your initial confidential consultation with one of our qualified and compassionate family law attorneys.
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Getting the Skinny on Protecting Your Assets