How Will Alimony Affect My Finances?
You have many considerations and changes to make when you get divorced. One of those is a reduction in income. Many households consist of two working adults. Divorce changes one household with two incomes into two households each with a single income.
“The wage earner with the higher income may have to pay alimony”, explains Attorney Matthew Z. Martell, one of the top divorce lawyers that Sarasota, Bradenton, Lakewood Ranch, and Venice, Florida residents have come to count on for their divorces. That alimony payment basically ensures that the lower income spouse does not experience a significant drop in her standard of living during the marriage due to the divorce. The court looks at the income and assets of both parties. Therefore, if your spouse has a trust fund or significant assets, protect yourself by pointing that out in court and documenting it when making a request for alimony.
You might think your salary cannot cover two people alone and it probably cannot. Alimony typically does not provide a reimbursement to the lower income spouse for the entire income that the higher income spouse earned during the marriage. It just provides a portion of it—normally up to 40% of his net monthly income at most. The court reasonably expects that the lower income spouse will continue working or will get a job in order to become self-supporting financially.
“You have a few ways of protecting yourself from having to pay alimony in a long-term marriage, but you need to take these legal actions well in advance of a divorce, and oftentimes in advance of even the marriage itself”, says Bradenton divorce lawyer Matthew Z. Martell.
Prenuptial Agreements
If you have your fiancée sign a pre-nuptial agreement, this legal agreement will determine the financial arrangement that occurs upon a divorce. This legal document fully discloses both parties’ incoming incomes, delineates which property each person already owns, and lists what each person already owes for his or her debts. It must be stated in the prenuptial agreement what the specific settlement of property distribution will be if a divorce shall occur. Normally, these pre-nuptial agreements provide for no permanent alimony, no permanent attorney’s fees and costs, a nominal amount of temporary alimony and attorney’s fees and costs to make in legal under Florida law, and an agreement that each party will keep the assets that they brought into the marriage upon divorce.
Postnuptial Agreements
The less well-known and rarely utilized postnuptial agreement lets you establish a similar agreement to a pre-nuptial agreement, but it is done after you are married. Normally, these post-nuptial agreement are executed when the married couple is having marital problems and is contemplating a divorce. Normally, based on my experience, it is only high-net worth married couples who have both been divorced before that end up actually getting a post-nuptial agreement. To be frank, you probably are going to run into unwillingness from your spouse to enter into one of these agreements if you’ve already began having marital problems. As stated above, they are rare.
Lump Sum Alimony- Negotiate a Larger Property Settlement
Another option is to work with your attorney and your spouse’s attorney to negotiate a property settlement that provides more of the marital assets and no monthly alimony income. This is called lump sum alimony. You might provide her with a larger portion of the retirement accounts, your marital home, and/or the vacation home. Offer her favorite asset from the marriage to create a “can’t say no” offer.
Lump Sum Alimony- Negotiate a Large Monetary Payment
The business term “buyout” gets parlayed into divorces, too. You might have a spouse who wants her life to not change at all. She wants a house in the same neighborhood but not the one you shared. Perhaps she has some need for a large influx of money for a desired investment. You can offer a large lump sum payment in lieu of monthly alimony income. To do this, you might liquidate stock you owned prior to the marriage or dip into a trust fund. Talk to your CPA before making this decision, so you do not hurt your own income or your taxes.
Other Considerations
When you do make monthly permanent periodic alimony payments, they do not necessarily go on in perpetuity. For example, when your spouse remarries, you no longer have to pay. When your ex-spouse is cohabitating in a long-term supportive financial relationship with another man, then if you can prove it under Florida law you may also get your alimony terminated. We recommend that you a private investigator obtain this evidence for you.
You can lessen the amount you owe each month by divorcing sooner. The longer you remain married, the more the Florida law considers alimony a necessity for the other spouse. “If you know your marriage is not going to work out, then get divorced more quickly in order to try to owe either no alimony or alimony for a shorter time frame”, says trusted Bradenton and Lakewood Ranch family attorney Matthew Z. Martell. You essentially owe alimony payments for a longer time period with the passing years you stay married. Also, consider requesting the court approve an end date to alimony. For example, you might pay it for the two to three years your former spouse needs to attend school to update their skills, but then get it cut off once they have their degree, a job, and have established steady employment for a year or two. This is called rehabilitative alimony.
“You can also reduce the amount you will need to pay for alimony by requesting that the judge order an evaluation your spouse’s fitness to work. Your spouse may want to just stay at home and be a homemaker, but if that would cause you additional financial hardship and/or is not necessary, then the Court can impute monthly income to her for what she could be earning if she were working in a local job that she is, or could be, qualified to do. This is called a vocational evaluation.”, explains top-rated Sarasota divorce lawyer Matthew Z. Martell. A vocational evaluation basically looks at whether the spouse has an education and skills that could obtain her a job in the local area in today’s job market. For example, if your spouse has a Master’s degree and in-demand job skills, then the court will most likely impute a fairly high level of monthly income to her if you get a good vocational evaluation done. If she has not worked recently, the court may inquire into what it would take and how long for her to update her job skills. If they are truly physically disabled, then the court will not make her work or impute income to her. But a person of able body and mind who could obtain an education or already has one either needs to work or will have income imputed to him or her. This reduces the amount of alimony and child support you must pay, although the court might temporarily order you to pay for a school program so she can update her job skills. For example, a CPA who has let their credentials lapse would need to update his or her continuing education courses and re-qualify for their accounting licenses credentials first. This could take at least few months, so the court would have the higher-income spouse pay for the schooling and for a higher amount of monthly alimony during that schooling.
Remember also that child support and alimony typically go hand-in-hand. If you obtain sole parental responsibility (which is rare), then you probably will not be required to pay child support. If you share parental responsibility and your timesharing is 50/50 (which is very common), and you make more money, then you will need to pay child support for each child and probably also alimony to your spouse if it is a mid-length marriage or a long-term marriage.
Call the Law Offices of Matthew Z. Martell, P.A. today at (941) 556-7020 for an Initial Phone Consultation to learn more about how alimony affects your divorce proceedings. When you need one of the best Sarasota, Bradenton, Lakewood Ranch, or Venice, FL divorce lawyer, turn to one you can trust—contact Attorney Matthew Z. Martell today for help!
