Unless couples are older when divorcing in New York, retirement is probably the last thing on their minds. For a long time, this may have been just fine. However, the new tax reform that took effect in 2019, made changes that could cause spousal support to affect retirement plans.
Couples divorcing this year in New York may be surprised to learn that the new tax laws affect divorce and spousal support. According to CNBC, the changes reverse tax laws put in place almost 80 years ago that made it easier for ex-spouses to make and receive alimony payments. In the past, the spouse receiving alimony paid taxes on the amount received, while the paying spouse took a tax cut. The new laws allow the receiving party to exclude it from their taxable income, while the payer must now pay taxes.
Spousal support, which you may hear called alimony, is one form of support ordered during a divorce by a New York court. Regardless of whether you will receive or pay it, it is helpful to understand how the court calculates it. The different factors the court considers will allow it to properly formulate how much you may pay or receive and for how long.
Very little about divorce is simple, but the complexity of marital property distribution and spousal support can be overwhelming. In New York, if the parties involved in a divorce cannot agree on these issues, the state Supreme Court will order support from one spouse to another based on the circumstances of the case.
New Yorkers who are involved in a divorce might be interested to learn about spousal support, also known as alimony. During divorce proceedings, alimony may be awarded to one of the former spouses in order to mitigate the effects of losing the higher-wage-earning spouse's financial support. Alimony is usually paid on a temporary basis while the payee gathers the resources to become self-sufficient.
Most people enter into a marriage certain it will last forever. While that sometimes is the case, nearly half of the marriages in the U.S. end in divorce. As a result of this alarming statistic, more New York couples may be seeking a prenuptial agreement. While the idea may not be romantic, it is only logical to consider all possibilities before you say your wedding vows.
Not all divorces among the famous are uncivil affairs. Some well-known personalities enter into divorce proceedings amicably or at least without overt contention. Celebrity wealth inflates the figures at the divorce settlement table. The marriage-ending process for celebrated divorcing couples remains much the same as it does for not-so-rich, not-so-recognized marriage partners.
The New York State Law Revision Committee has until the end of the year to report on recommendations about a year-old, formula-based spousal maintenance law. The New York City Bar Association wants the committee to widen the use of the formula to include Family Court divorce cases.