Articles Tagged with santa rosa spousal support attorney

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Spousal Support Tax Law ChangeHow does the new spousal support tax law for 2018 affect couples currently divorcing or considering a divorce? On Friday, December 22, 2017, President Trump signed the new tax reform bill into law. The changes went into effect on January 1, 2018.

The tax law preceding the new tax reform bill of 2018 made payments of spousal support (alimony) deductible to the payor and taxable to the recipient.

The prior law held: “Amounts paid to a spouse or a former spouse under a divorce or separation instrument (including a divorce decree, a separate maintenance decree, or a written separation agreement) may be alimony for federal tax purposes. Alimony is deductible by the payer spouse, and the recipient spouse must include it in income.”

Spousal Support Tax Law Change

Under the new law, spousal support is no longer tax deductible to the payor nor is it taxable to the recipient. While the new law goes into effect on January 1, 2018, this change will not affect anyone who is divorced prior to December 31, 2018. Consequently, parties who divorce prior to that date will be “grandfathered” in to the old law regarding tax consequences of spousal support. There will be no effect on those parties who divorced prior to December 31, 2018.

The number of payors of spousal support who took the support deduction on their federal tax returns in 2015 was approximately 600,000. While nothing will change for them, the payors who divorce after December 31, 2018 will no longer have the benefit of deducting their support payments.

The new spousal support tax law rules won’t affect anyone who divorces or signs a separation agreement before 2019, but undoubtedly this new spousal support tax law will change the landscape of divorce cases, family law litigation and settlements for years to come in terms of how parties approach spousal support. Continue reading →

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support PaymentsSupport payments in California. Leaving a marriage can be a difficult decision. It is not made any easier by the financial constraints associated with dividing a household. Living separately is obviously going to cost more, and in many cases that means both parties are going to have to adjust the living standards to which they have become accustomed. How are the financial decisions made in California divorce cases? If you are seriously considering divorce, it is time to see an experienced family law attorney.

How are Spousal/Partner Support Payments Calculated?

California Family Code section 4320 lays out specific considerations to factor in when determining how much spousal or partner support payment is appropriate:

  • Time: How long has the marriage or domestic partnership existed?
  • Need: How can each partner best experience an equivalent standard of living?
  • Liabilities: What debts will each partner keep?
  • Assets: Who, if anyone, will stay in the home? What other property is being divvied up?
  • Employment: Will both partners be employed, or will one have primary childcare responsibilities?
  • Previous career advancement: Did one partner support the other through school or licensing programs to propel a career?
  • Training: Will on partner need education or training in order to obtain meaningful employment?
  • Age/Health: Do one or both partners have particular health needs that must be addressed?
  • Domestic Violence: Was there mental or physical abuse in the relationship?
  • Tax Impact: Because tax laws do not recognize domestic partnerships, will tax implications be favorable or unfavorable?

Temporary or Permanent Spousal Support Payments

Temporary support payments may be assigned while a case is pending; judges typically use a formula specific to their own county to make a calculation for the appropriate amount. Once the case is finalized, “permanent” support payments may be ordered based on the factors listed above. Do not be fooled by the term permanent. In this case, it simply means the order becomes valid once the divorce is finalized. It may or may not have time limits.

Changing the Support Payments

Imagine that after the divorce, the person paying support loses a job, or the person receiving support payments inherits a windfall. Either individual may, at some future time, experience a significant change in financial circumstances, prompting a request to change the amount of support. If both partners agree to the changes, a simple stipulation written up and given to the court will result in a new order relatively quickly. On the other hand, if there is a dispute, the individual requesting the change must file a motion with the court. This is something that should be done sooner rather than later, as changes to the order cannot be made retroactively. Continue reading →

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spousal support payments, spousal supportHow are spousal support payments calculated in a California divorce? Ending a marriage can affect almost every aspect of your life, including your financial stability. In many relationships, one party chooses to forgo education or pursuing a career in order to support the other person’s ambitions. Even if this is not the case, some couples fall into “earner” and “caretaker” roles, particularly when there are children involved. This may result in significant economic inequality between the parties to a marriage, and may leave one spouse without any income absent judicial intervention.

Fortunately for some who people seeking a divorce, California law allows a court to order spousal support payments (or partner support payments, in the case of a domestic partnership) in order to provide for the financial needs of the party unable to support themselves financially. Spousal support payments can significantly impact both parties: the one ordered to pay and one receiving spousal support payments. Consequently, it is important for anyone involved in a divorce or other legal proceeding in which spousal support is at issue to discuss their case with an experienced lawyer as soon as possible.

How Are Spousal Support Payments Awarded?

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