If you’re going through a divorce, there is one thing to add to the list that includes death and taxes – alimony. Whenever two people in the US officially split up, it usually ends up with one paying money to cover the other party’s living costs, as well as that of the kids.
Unfortunately, people with more money and assets tend to get an unfair deal. So, it’s not uncommon for those who have to pay alimony, usually men, to want to strike a fair agreement.
Use this guide to make sure you don’t lose in court and end up with the worst contract ever.
What Is Alimony?
In short, it’s a court order that makes you liable for payments towards your ex-spouse. The fees are usually made after the break-up, but they can happen before your divorce is finalized, too.
The reason it’s awarded is that your spouse doesn’t have the means to look after himself or herself financially as they make less money. It can be assigned to either the husband or the wife; however, it’s mainly men who have to pay as they tend to earn more.
Spouses can apply and win alimony even if there aren’t any children involved. This is because the law states that they have the right to lead the same lifestyle after the marriage as before it.
Although it sounds quite simple to understand, there are lots of small things that affect how much and how long you have to pay alimony. Terms differ based on the state, but the general rules across the US are that you will have to pay until:
- A judge sets a date, usually several years later on
- Your former spouse remarries
- Your children no longer need a full-time parent at home
- A judge decides that your spouse has not made an effort to become self-supporting
- A significant event, such as retirement, happens and convinces a judge to change the amount
- One of you dies
How Does A Judge Decide The Amount?
If you have to pay alimony, the question will want answering is: “how much will I have to pay?” The amount is down to the judge, so there isn’t a one-size-fits-all amount. But, it’s possible to figure it down understanding the process courts use.
Firstly, the judge will work out the typical expenses for both parties. That way, they know how much to award without hurting either the husband or wife. Secondly, they take the earning power of both spouses into account. Finally, the court will gauge whether the person responsible for paying alimony will be able to lead their standard of life.
The latter is called “the standard of living established during the marriage,” and it’s a vital part of getting a good deal. Why? It’s because alimony payers get to share the burden if they can prove that the amount negatively affects their marital standard of living. If this happens, the judge has no option but to make sure both the husband and wife share monetary burdens equally.
Can You Avoid Paying Lots Of Alimony?
Men going through a divorce, or any spouse with the biggest earning potential will assume that their alimony payments will be harsh. There’s no doubt that there are enough horror stories out there to back up this idea. Plenty of breadwinners have been ripped off in the past, and plenty more will be in the future.
Just because you have to pay alimony doesn’t make you a bad person, and neither does wanting to get a fair deal. Here’s how to do it.
Hire A Quality Lawyer
The person who represents you is going to have a significant role in your alimony deal. However, this doesn’t mean you have to pay a fortune to retain them for your day in court. Yes, the best attorneys are expensive, but there are ways to find affordable legal representation. A prime example is a type of no-win-no-fee deal. Specific law firms only take a cut if they secure the desired result, which is vital for two reasons – it means you’ll have the money and makes them work hard to get paid.
Some companies do it a different way, where you can pay your litigation funds out of a settlement.
Invest In Stocks And Shares If Your State’s Laws Allow It
There are hardly any state restrictions that stop you from making investments. But, this refers to the gray area of savings. While certain states include them in the settlement, others don’t see them as ‘valid standard of living considerations.’ In simple English, it means that the likes of Florida and Hawaii have ruled that they are off-limits and can’t be used to determine how much alimony you will pay.
You will have to prove that they are genuine investments.
Keep It Amicable
The majority of your marriage went without a hitch. You loved each other and wanted the best for the other person, and not much has changed. So, why do divorces get heated? It’s because it is a challenging process and staying cool is tough. However, you must do, or else you run the risk of your spouse trying to hurt you via alimony payments.
Going to mediation to find a compromise that suits you and your spouse is an excellent idea as the mediator is an unbiased third-party.
Freeze Credit Lines
Any credit lines that are solely in your name make you vulnerable. If your spouse has access to them and knows divorce is around the corner, he or she can run up new debt that they won’t have to pay. Therefore, it’s a smart move to freeze those credit cards right away.
Speak To An Accountant
An accountant or bookkeeper can help save you money in a divorce. It sounds strange, but it’s true, and it’s because alimony payments are tax-deductible. Figuring out the best way to structure your payments so that you pay less tax could save you a healthy sum in the long-term.
Do you have any burning questions about your divorce? At Divorce Mistakes Network, we connect you with professional and expert divorces services to make sure you don’t spend the next ten years cursing your agreement.