One of the most difficult things a divorce client can face is the change in their economic reality. Whether it is the result of a spouse attempting to lower income in anticipation of the court ordered obligation, or simply trying to make an already tight budget for the financial obligations of one household stretch to now meet the obligations for two households, the impact is the same. It can be simply awful.
The Law Offices of Karen Reynolds offers guidance and competent counsel relating to alimony and spousal support concerns. While alimony is not guaranteed, it can be awarded to either or both of the parties based on the specific facts and circumstances of each case. Alimony is not gender based and at least until January 1st, 2019, it has very real taxable consequences. For example, the payer of Alimony is allowed to deduct the payment from his or her income for income tax purposes. The recipient of the Alimony must report the payment as income on which he or she is taxed. With the advent of recent tax reforms, after January 1st, 2019, alimony will no longer have any taxable consequences. Specifically, alimony will no longer be tax deductible to the payer and it will no longer be tax includible to the recipient. However, all orders concerning alimony entered prior to January 1st, 2019 will be treated under the old tax law of deductibility to the payer and inclusion in the income of the recipient.
Whether it is awarded by agreement of the parties or by the Court, the factors taken into consideration in determining the amount of alimony include equitable considerations.
One of the most important factors is the parties’ length of marriage. Connecticut courts are rejecting the concept of lifetime alimony, even for a marriage of more than 20 years, without definite and precisely stated reasons. For marriages that are less than 20 years, the alimony obligation will likely be half the amount of years of the marriage.
Obviously, the age of the parties makes a difference in determining a result. Are the parties near retirement? Are they just starting out? Have they given up a career to raise children and is he or she re-entering the work force at a late age?
Another important factor for the lawyer and the Court to consider when determining alimony is the client’s health. A client‘s health may impact their ability to work in the future. It may have impacted their ability to work in the past, but no longer.
Is either of the parties educated in some particular career path that will yield an income? Are they making appropriate use of that education? Does either of them require further education to meaningfully make a living going forward? Is there a need to pay a temporary or rehabilitative amount of alimony to get that individual back in the working force?
Another question attorneys and Courts need to ask is whether the individuals are appropriately employed. Employment, both current and past should be examined to verify that each party is doing their fair share to support the newly defined family unit.
The lawyers and judges will also examine the cause, if any, for the breakdown of the marriage in deciding alimony. However, it is not and should not be the major focal point of any divorce or civil union dissolution. Many partners place tremendous emphasis on the issue of fault. It is only one of the factors a court considers, and clients going through a divorce or civil union dissolution are better served focusing on their minor children, resolving financial issues and planning for the future.
Since there is no specific formula for determining alimony, it is crucial to have a lawyer who understands the factors set forth in Connecticut’s alimony statute and how they are impacted by the other aspects of Connecticut divorce law. Until the tax reforms changes become effective January 1st, 2019, your lawyer must understand the concept and taxable consequences of recapture and structure a result where the client does not have exposure to these taxable pitfalls. Tax laws (until January 1st, 2019) can have devastating consequences on alimony awards and post judgment modifications made to those awards.
With competent legal counsel, clients can confidently settle in creative ways that help to meet the financial needs of their families’ new structure. If that remains impossible, the Firm can effectively litigate a fair result on the client’s behalf. Call today for your free consultation.