From a financial standpoint, spousal support is one of the most controversial elements in a marriage dissolution case. Some jurisdictions have substantially rewritten their alimony laws in recent years, and some have not changed their laws at all. But Regardless of state law alterations, big changes are coming in January 2019.
Many people (mostly divorced men) view spousal support as a financial penalty. Anecdotal evidence abounds of second wives that must work outside the home to subsidize their mate’s alimony payments to a first wife.Other people (mostly divorced women) see spousal support as vital. There is some evidence, although not very much, that divorced women rebuild wealth at a much slower pace than divorced men.
Georgia law is a fairly good balance between these two viewpoints. The big change coming in January 2019 has nothing to do with alimony awards or the factors involved in such decisions. Instead, the change comes from Washington.
For the balance of this blog, we will assume that the obligor (person required to pay) is the husband and the oblige (person entitled to payments) is the wife. That’s the situation in almost all cases.
Alimony and Income Taxes
Since the 1970s, alimony payments have been tax-deductible and alimony recipients were required to report this income on their 1040s. The 2017 Tax Cut and Jobs Act reverses this situation. Beginning in January 2019, alimony payments will no longer be tax-deductible for obligors and no longer tax-reportable for obligees.
TJCA proponents insist that the change will benefit divorced women. Since it reduces their reportable income, the new rule should reduce their tax burden. Additionally, if she needs to show more income for some reason, such as qualifying for a loan, she may be able to report alimony income on her loan application or other document.
Others predict the opposite. Divorced men may claim that they cannot pay as much spousal support because they are losing the tax deduction. In Georgia, judges may consider the way tax consequences affect the obligor’s ability to pay spousal support. However, this consideration has nothing to do with the obligee’s economic need, which is the other main factor in these cases.
No one really knows what effect this change will have. We Shall simply have to wait and see. If the Democrats return to power in 2020,and that is a very uncertain “if,” they may well eliminate this portion of the tax code changes.
Types of Alimony in Georgia
When a couple splits up, they both experience a significant loss of income, assuming husband and wife both worked. This loss of income is often harder on women. They must pay child care deposits, property deposits, and other such expenses. They must also pay attorneys’ fees. These burdens are especially pronounced if the husband filed for divorce and the wife had little or no notice.
Cobb County judges can award alimony pendente lite (while the case is pending) to help women deal with these expenses. Temporary alimony is not automatic, but it is extremely common in Cobb County divorce cases. As The name implies, temporary alimony automatically terminates when the caseends.
Sometimes, the woman’s economic need does not end when the case is over. Many women must go back to school to complete a degree or take other rehabilitative steps. Otherwise, they cannot become self-sufficient.Other women face permanent barriers. They may have a physical or mental disability, or they may have custody of a seriously-disabled child and be unable to work.
Permanent alimony may be appropriate in either of these cases. But “permanent” does not always mean “forever.” Instead, in this context, permanent just means “after the divorce is final.” Indeed, most Cobb County judges narrowly tailor alimony according to the facts of the case. For Example, if the wife needs a year to finish school or must take a low-paying internship to re-enter the workforce, most judges limit the duration of alimony payments.
Factors to Consider in Alimony Awards
When it comes to setting the amount and duration of payments, Georgia law is quite subjective. There is no list of factors for judges to consider. Nationwide, many reformers have been harshly critical of such laws. They want alimony to be more like child support, which has an objective formula.
Nevertheless, most Cobb County judges consider roughly the same factors when weighing economic need against ability to pay. Some factors include:
- Length of the marriage,
- Earning capacity of each spouse,
- Awards of marital and non-marital property,
- Custody of minor children,
- Tax consequences for each party,
- Division of marital debts,
- Standard of living during the marriage,
- Amount of time the oblige needs to become self-sufficient,
- Noneconomic contributions to the relationship, and
- Agreements between the spouses.
That last point is quite significant. Most Cobb County Family law judges uphold premarital and post-marital agreements as long as they are not blatantly one-sided and both spouses had a roughly equal voice in the process.
Modifying Spouse Support Awards
Generally, either spouse may file a motion to increase or decrease the amount or duration of payments. The filing party must show that financial circumstances have materially and substantially changed.
Retirement does not automatically terminate or reduce alimony payments. Instead, the retiring party must file a motion to modify. The oblige can successfully challenge this motion in some cases. For example, many people retire early to take advantage of lucrative retirement packages.
Remarriage is a bit controversial as well. Many obligors feel, rightly or wrongly, that women “play” the system by not legally marrying their partners. That may or may not be true. In any case, if the obligor file a motion to modify based on reduced economic need, the judge will examine the relationship between the oblige and her new beau. If there is evidence that the relationship is a committed one that involves some financial considerations, judge may grant the motion even if the oblige is not remarried.
To reset the amount and duration of payments, if warranted by the changed circumstances, judges look to the same factors that govern initial determinations.
Work with an Assertive Lawyer
Both obligors and obligees have legal and financial rights in alimony matters. For a free consultation with an experienced family law attorney in Marietta, contact The Phillips Law Firm, L.L.C. After-hours visits are available.