Everyone has concerns about financial security at the end of a marriage. If each spouse is not financially self-sufficient, there must be a conversation about how the income that used to support one household will now be used to support two households. This conversation can be stressful, especially if your earning potential is not what your spouse’s earning potential is. But even if you are the spouse who has earned most of the money during the marriage, the idea of paying alimony, or spousal support, may be worrying.
You may be asking:
Will I be able to keep the house?
What will I do for health insurance?
How will I be able to pay my bills?
Will I be okay in retirement?”
All of these fears are very normal.
In North Carolina, unlike in some other states, there is no formula and no alimony “calculator” to provide straightforward answers. So, how do you decide the essential cash flow questions: How much? And for how long?
You may also be aware that alimony payments can be affected by tax law. Tax Cuts and Jobs Act (TCJA) that passed in 2017 means that spouses who pay alimony no longer can claim those payments as a tax deduction, and spouses who receive alimony are no longer required to report payments as income.
Discussions about cash flow can be the most difficult because long-term marriages, and even some short-term marriages, often involve a complicated co-mingling of assets and income. The decisions and contributions of each spouse during the marriage feel very personal, and frank discussions about cash flow can make each feel vulnerable, unappreciated, or confused about his or her responsibilities.
As a collaborative attorney, I have a structured process for helping my client determine what their financial needs will be after the divorce, what their expenses and incomes will likely be, and what is the most equitable way to make sure my client can meet his or her financial needs, both in the short term, and in the long run.
My goal is always to help my client a reach solution that allows them to achieve the financial security needed to successfully transition to the next stage of life.