3 Important Things to Know About Alimony

3 Important Things to Know About Alimony
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Alimony is money paid from one spouse to another as part of a divorce settlement. The amount of alimony that a spouse may get depends on his or her earning power after the couple splits. It may also depend on how many children one spouse is left to raise either on his or her own or mostly on his or her own.

Alimony May End If the Payee Gets Married

If the person receiving the alimony gets married, it may no longer be necessary to for the other spouse to continue paying alimony. In some cases, it may only be necessary to prove that the spouse receiving alimony is living with a significant other and receiving financial support from that person. For instance, if an individual moves in with a boyfriend or girlfriend, that could be construed as support that could terminate alimony. Alimony could also end if the person receiving payments receives an inheritance or another windfall that would put them on solid financial footing.

Alimony Is Rarely Permanent

For the most part, alimony payments are based on an individual’s ability to get a job after a divorce. It may also take into consideration whether one spouse intentionally stayed out of the labor market or delayed getting an education to take care of children or otherwise take care of the household. Therefore, alimony is generally limited to the amount of time needed to get an education or to get a job that allows for a basic standard of living. However, payments may be made permanent if the marriage lasted for more than 20 years or one spouse has a physical or mental disability that makes getting a job impossible.

Alimony Payments May be Tax Deductible

One benefit to making alimony payments is that they may a tax write-off for the person making them. Conversely, they may be taxable income to the person who receives them. That is why it is critical to keep good records related to payments made and received to avoid running afoul of the government. Keeping good records may also be beneficial in the event that there is a dispute over when or if a payment was made. There are many services that will help you track your payments and verify that they have been received.

If you are paying alimony, you will be required to do so for as long as the divorce settlement stipulates unless mitigating factors come into play. However, it may be possible to ask that the payments be terminated or modified if your circumstances change or your former spouse’s circumstances change.