In a Family Law case the Court can make an award of Temporary Spousal Support, while the case is pending. In determining Temporary Spousal Support, the Court will use a computerized program called Dissomaster, which is used to calculate both Child Support and Temporary Spousal Support. In calculating Spousal Support, the court has discretion to decide on a different amount for a Temporary Spousal Support Order than the Dissomaster Calculation, but the Judge may be required by the law to state the specific reasons he or she is making an order that differs from the Dissomaster Calculation. In deciding on Permanent Spousal Support, the court is required under California law to take a different approach and consider about fourteen factors spelled out in the Family Law Statutes. These factors include the age and health of the parties, the length of the marriage, the standard of living the parties enjoyed during the marriage, and other factors that include special needs of either party, the existence of Domestic Violence, in some cases tax planning considerations, contributions that a spouse has made to the other spouse’s acquisition of a professional license or degree and other factors that may be just and equitable. Usually Permanent Spousal Support is awarded for a period equal to one half the length of the marriage, in Marriages that have lasted less than ten years. There are special rules for Marriages of “Long Duration” that have lasted more than ten years. Usually the trial court has retained jurisdiction to modify Spousal Support in marriages of “long duration”, that is, marriages that have lasted longer than ten years.
The court in a Family Law case also has the power to require the party receiving Spousal Support to seek employment, since there is a duty for each spouse to become self-supporting. If a Spouse is not meeting his or her responsibility to seek employment in order to become self-supporting, his or her spousal support may be reduced by the court. Recent 2018 changes in Federal Tax Law have significantly limited the deductibility of Spousal Support Payments, also referred to as Alimony Payments, from the income of the paying spouse, for Federal Income Tax purposes. For Divorce Decrees entered after December 31, 2018, Spousal Support payments will no longer be deductible for Federal Income Tax Purposes from the income of the paying spouse, and includable in the income of the receiving spouse. Property awards are treated differently when it comes to Income Tax issues. A division of property between husband and wife in a divorce is not itself a taxable event. But there may be very different tax consequences to receiving a property award that includes property which significantly increased in value during the marriage.
In negotiating and working out a Marital Settlement Agreement, you need to give careful consideration not only to the dollar amounts involved in Spousal Support, but also to the tax consequences or your Marital Settlement Agreement. Susan Cohen has the experience in Family Law and also in Federal Tax Law to help you understand these issues and work out a solution that provides for your future, and keeps down the tax burdens on the income and property you receive in your Dissolution of Marriage or other Family Law case.