Alimony may seem straightforward at a glance—one ex-spouse pays another spousal maintenance due to court orders—but there are various caveats that each party may want to know before getting too deep into it.
As USA Today details, recent tax changes upheaved a decades-long practice of tax deduction strategies. A payor may not deduct these payments off their taxes nor does the IRS consider them taxable income for the recipient. This is one of many complications that crop up in divorce cases. For those separating in Colorado, a brief primer on the types may help.
The courts may order a higher-earning spouse to support the other during the divorce process. This type of maintenance only lasts through the proceedings, at which point any awarded spousal support kicks in.
Contractual and non-modifiable maintenance
This is an agreement between spouses that, once signed, no court can amend afterward. These arrangements allow for a degree of security for spouses. If the payor works into a better career after the marriage, the spouse cannot ask for more alimony. And providing a higher-earning spouse with a steady agreement may be a useful negotiating tool for the recipient.
This is the usual award people think of when they hear the words alimony. According to Colorado statutes, courts look over several factors including each party’s gross income, financial resources, financial need and the length of the marriage. Once calculated, these spousal maintenance awards may last for life such as with marriages lasting longer than 20 years. Others may last only months or years depending on other details.
Divorce is a sticky situation. When financial support is on the line it may be worthwhile for each party to come to the table knowing what to look for out of the agreements.