Spousal Support Concerns for a Stay at Home Parent and Payor Spouse

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by | Feb 11, 2020 | Blog, Divorce, Spousal Support

When a parent has been out of the workforce for a while, divorce can be particularly stressful because he or she is likely to experience a significant change in financial circumstances. Until a few years ago, this parent could expect, depending upon the facts of their case, to receive spousal support for many years after the divorce, possibly forever. However, in 2016, New York substantially modified its spousal support law to provide greater predictability in the awards and address concerns regarding fairness given the variations in the court decisions regarding support.

In particular, the new formula was enacted with the intent to compensate for the elimination of professional license and degree valuations, which used to be considered a marital asset subject to equitable distribution. It also created predictability in terms of the length and amount of support awarded regardless of whether or how much time the recipient spouse needs to become self-supporting.

Thus, the 2016 law generally provides spousal support for those who meet the statutory requirements for a recommended duration based upon the length of the parties’ marriage. Consequently, for marriages having a duration of less than 15 years, payments should last between 15% to 30% of the marriage’s length. For marriages of 15 to 20 years, payments should last between 30% and 40% of the length of the marriage. For marriages over 20 years, payments should last for 35% to 50% of the length of the marriage.

Notwithstanding this recommended structure, the court may consider the party’s age, health, need for training/education and other factors in making a final determination of the length of time that spousal support should be paid. Generally, the courts recognize that a stay at home parent may need additional time and assistance to become employable. In addition, if there are still young children in the home, the other spouse will be required to contribute to child care expenses incurred by the custodial parent so the custodial parent can obtain an education and training, look for a job and eventually work outside the home. The tax impact of spousal support awards may also be considered especially in light of changes under the 2017 Tax Cuts and Jobs Act.

Under the 2017 Tax Cuts and Jobs Act, spousal support is no longer tax-deductible to the payor spouse. Thus, all spousal support determinations or agreements made on or after January 1, 2019 are, for Federal tax purposes, tax-free to the recipient. In New York, however, payor spouses retain the right to deduct all spousal support payments from their gross income when calculating their New York State and New York City income tax liabilities.

While the old law treated spousal support as rehabilitative in nature, the goal of the new support law appears to have been to compensate the lesser earning spouse for their efforts during the marriage over time. Notwithstanding the 2016 spousal support law, non-titled spouses may continue to claim a percentage of the appreciation of the other spouse’s business or professional practice occurring during the marriage based upon the degree of contributions he or she made to the business or professional practice.

Although spousal support is subject to statutory guidelines, the parties can continue to negotiate their own agreement and reach terms that differ from the statutory guidelines and formulas.

If you are considering divorce or you are divorced and seeking a change in your spousal support award, contact us to learn how we can help you.

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