HOW TO DETERMINE ALIMONY

Posted by on May 21, 2018 in Alimony

In New Hampshire, the court has the authority to issue an order for alimony.  Alimony is spousal support.  It is usually intended that alimony is rehabilitative.  In other words, it is a payment for a period of time to allow a spouse to get back on their feet and to become self- sufficient.  The current alimony statute in New Hampshire, RSA 458:19, provides that the Court shall make an alimony award if the court finds that the party in need lacks sufficient income, property, or both to provide for that party’s reasonable needs, and that the party from whom alimony is sought is able to meet their reasonable needs while meeting those of the party seeking alimony.  This two part test generally is very fact specific.  The Court will analyze whether the party seeking alimony is unable to meet their reasonable needs taking into consideration the style of living the parties were living while married.  Once the Court determines that a spouse is in need of alimony, the analysis then shifts to the paying spouse to determine whether that spouse can afford to pay alimony.  Because this analysis depends a lot on the individual parties and their financial circumstances, there is a wide variety of outcomes that can occur, which does not give parties a lot of direction in determining if alimony will be ordered, and if so, how much will be ordered and for how long will the paying spouse be required to pay the alimony. Because of the difficulty in predicting outcomes, parties are oftentimes unwilling to reach agreement if they and their attorneys cannot agree on a likely outcome should they go to court on the issue of alimony.  To help this uncertainty, there is currently a bill pending in the New Hampshire legislature that would change the alimony statute and would, hopefully, provide more guidance to individuals and attorneys on what a likely outcome would be.  The proposed bill introduces a formula which essentially provides that the amount of alimony shall be the lesser of the individual’s needs, or 30% of the difference between the parties’ incomes.  The bill also provides clarification that the maximum duration of the alimony award shall be ½ of the duration of the marriage.  This bill, if it is passed, is likely to provide additional guidance to practitioners and parties when trying to determine an appropriate alimony...

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Big Changes In Tax Law Bring Big Changes for Divorces

Posted by on January 16, 2018 in Alimony, Collaborative Law, Divorce, Family Law, Uncategorized

  The Tax Cuts and Jobs Act of 2017 (the new tax law) was signed into law by President Trump on December 22, 2017. Some of the changes from the law go into effect on January 1, 2018 and will affect the tax filings for the 2018 taxable year.  Notable changes that will affect divorcing spouses and parents are as follows: No more claiming your kids as tax deductions. Effective for the 2018 tax year, parents can no long claim their children as dependents for the purpose of deducting them on their taxes.  This change will certainly modify divorce orders and agreements as parents no longer will need to agree about who will claim the children on their taxes each year.  However, while Congress has taken away the ability for parents to claim your children on their taxes, it did double the child tax credit from $1000 per child to $2000 and allow parents to alternate this deduction for children each year.  All divorce agreements and orders after January 1, 2018 should contain language for how parents will claim the child tax credit.  Congress also allows all taxpayers earning up to $400,000 to claim the child tax credit, an increase from the prior cutoff income level of $110,000. Alimony payments are no longer deductible by the payor. Beginning with the 2019 tax year, for all divorce agreements signed after December 31, 2018 and later, those who pay alimony can no longer deduct alimony as an itemized deduction.  Those receiving alimony no longer have to claim alimony as income and will not be taxed on the payment of alimony to them.  This is a significant change.  According to the United States Census Bureau, 243,000 people received alimony in 2017.  This law change will speculatively could impact divorce negotiations with couples arguing about whether alimony should be paid when there is no longer a tax benefit to the payor.  It appears that the IRS will allow all ex-spouses who modify their alimony to follow the 2017 tax law in claiming alimony as a deduction for those that pay it and having those that receive alimony claim it as income so long as their agreements or orders specifically state that they wish to follow the old tax law and the decree or agreement was made before December 31, 2018. The new tax law eliminates many itemized deductions. Starting with the 2018 tax year, the new law maintains deductions for charitable contributions, retirement and student loan interest but eliminates other deductions.  The law limits how much a taxpayer can deduct from property taxes as well. However, Congress has doubled the standard deduction for individuals from $6,350 to $12,000 and for married couples from $12,700 to $24,000. Parents can use 529 education plans in creative ways. The new law allows parents to use up to $10,000 per year per child in funds in a...

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Alimony modifications

Posted by on July 24, 2014 in Alimony, Family Law

Alimony it is one of the most difficult issues that we grapple with in a divorce.  If a case is appropriate for alimony (meaning one spouse has a need for financial support to get to a point of self-sufficiency and the other spouse has the ability to meet that need) the most difficult questions for spouses, lawyers and judges is how much alimony should be paid, and for how long.  Unlike child support, there is no formula to determine what is appropriate, rather it is a judgment made based on the specific facts of the individual case. Alimony can also be modified; in New Hampshire in order to modify an alimony award an individual must prove that there has been a substantial and unforeseeable change of circumstances that makes the current alimony award either improper or unfair.  That is a standard that has been described as difficult, and a high burden to meet.  The New Hampshire Supreme Court has recently clarified that this standard for modification does not apply to cases where an extension or renewal of alimony is being requested.  Rather, if an individual is asking the court to extend the length of time an alimony award will last, the standard is lower and is described by the Court as “to establish that justice requires a renewal or extension”  See, In the matter of John Lyon and Kimberly Lyon, 2013-401, slip op. (May, 2014)....

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