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FS-Tips on Support and Alimony
Jan L. Warner & Jan Collins

Question: My wife left me nearly six weeks ago and took our two young children with her. I have never done anything that justified her leaving – ie, I have neither been abusive to her nor breached our wedding vows. She told me that she had not seen a lawyer (nor have I), and I am sending her enough money each month to cover her expenses for her and our children. I would like to get my children and wife back to me, and if this is not possible, I think I can be as good a parent as she. I have looked on the Internet for explanations about the implications of paying money to support her and our children, but many resources seem contradictory. Is there anything I should really know?

Answer: Yes! And Foremost is to seek the advice of a qualified and experienced matrimonial lawyer who can explain the eccentricities of the law of your state when it comes to support. That said there are basically two kinds of support: spousal and child, and each comes in both a temporary and permanent mode. Alimony, however, may be broken down into several subtypes -- permanent periodic, lump sum, rehabilitative, and reimbursement– for example, which are determined either by a judge based upon the evidence at a trial or by you and your spouse through an agreement. Alimony can be taxable/deductible or non-taxable/non-deductible, all depending on the wording of the order or agreement.

On the other hand, the amount of child support is generally governed by a statutory formula, and is never taxable to the recipient or tax deductible to the payor. Alimony may be paid until death, remarriage, cohabitation, or any date in between. Child support is generally paid until the latter of reaching age 18 or completing high school.

Here are some of the things you should ask about:

1) How long does each type of payment continue in your state and what are the rules about modification should there be economic changes later? Is collegiate, and head of the household education determined now or later?

2) Make sure you understand the tax consequences of what you are going to pay or receive because it’s too late to plan after the agreement or court order is signed.

3) "Alimony" as defined by your state may not be "Alimony" as defined by the IRS. Find out about how the agreement or order should be worded.

4) Even though child support is neither taxable to the receiving spouse nor deductible to the paying spouse, there are still questions about dependency exemptions, medical expenses, and head of the household that may affect your tax situation.

5) If the dependent spouse or a child is disabled, specialized planning is essential after determining which public benefits may be available.

6) If the payor dies or becomes disabled, even though Social Security benefits may be available, these payments may not be sufficient or may not continue for a sufficient length of time. So look into life insurance to secure support orders.

There are also many other areas to explore including later modification based on increased or decreased income. So find a good lawyer and get the answers with your state law in perspective. to secure the anticipated before you sign anything because rules vary from state to state.



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Suggested Reading:
Separation and Divorce Guidebook
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FS-Be Wary of Credit Issues with Ex
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FS-Becareful of Bargaining Away Alimony As Child Support
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FS-Lawyer Tells Me to Lie & Pension Double Dipped
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FS-On and Off Again Reconciles Can Create Agreement Disasters
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FS-The Dangers of Family Loans
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FS-Transference of Affection & 10 Tips of Divorce
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