Alimony Feed

No More Alimony Deduction on your Taxes! Why and What does it Mean to your Rhode Island Divorce?

IMG_4945
Alimony Deduction Gone

Authored By:  Christopher Pearsall, RI Divorce Attorney
a.k.a.  " The Rhode Island Divorce Coach ℠ "

Under the Tax Cuts and Jobs Acts, alimony that has not been already been established by a Final Judgment or Final Decree of divorce or a settlement document incidental to a Final Judgment or Final Decree of divorce as of December 31, 2018 is no longer taxable as income to the payee receiving it, nor is it deductible from income by the payor spouse.

Alimony was previously deductible to the payor against their income and includable in income of the recipient payee.  This provided a modicum of fairness between the payor and payee.  The payor didn't have to pay the tax on the alimony monies being paid to the recipient payee because it was money the alimony payor wasn't able to keep.  By the same token the payee was held responsible for the tax on the alimony money being received but it was money the payee did not actually earn.

Why did our legislature change this long-standing deduction in the law? 

The answer?  Tax revenue.  The person paying the alimony in a divorce or separation (called a "Divorce from Bed and Board" in Rhode Island) proceeding was almost invariably the higher earner.  The person receiving the alimony payment was the lower earner.  Generally speaking, the payor of the alimony was then in the higher tax bracket and would end up paying more taxes on his or her income.   The recipient payee of the alimony was in the lower tax bracket and would pay less taxes on his or her income.  By eliminating the deduction, the taxes paid on the alimony will now be paid by the higher tax payer in the higher bracket resulting in more tax revenue to the government.

What could the removal of this deduction mean to your Rhode Island Divorce proceeding?

If you are the payor of alimony either by entering into an agreement with your spouse to pay alimony in divorce or separation settlement or by a judgement of the court that requires you to pay it, it could mean a greater alimony burden for you if the judge does not account for this new tax consequence because you will be responsible for both the out-of-pocket alimony payment as well as the taxes on those alimony monies at the end of the year based on your tax bracket for that year.'

Will the family courts change how it determines alimony based on this change in the tax deduction? 

It's unclear at this point how this will affect the courts legislatively, procedurally or administratively.  The hope expressed by some practitioners is that judges in Rhode Island and throughout the country will take the removal of this long-standing tax deduction into consideration for the payor when it comes to issuing judgments providing for alimony payments.  Since the tax burden can be significant depending upon the tax bracket and the amount of alimony that may be ordered to be paid, one would hope that the trend would be a reduction in the amount of alimony awarded.  By reducing alimony judgment amounts the court might normally have issued prior to the removal of the alimony deduction, a judge could fairly offset the payor's total alimony burden by taking into account this tax consequence which causes the payor to pay more because of the alimony judgement.  Since the spouse receiving the alimony is essentially receiving "tax-free" money and no longer has to pay taxes on the money received because it is no longer includable in income, it would seem more than equitable that the court make such an adjustment to the amount of alimony to account for the added tax detriment to the payor and the added tax benefit being received by the recipient spouse of not having to pay taxes on the alimony received.

It is always best to sit down for an advice session with a competent and experienced family law attorney in the state in which you have your issue before taking any kind of action.

For people within the State of Rhode Island, feel free to call me to set up your comprehensive low-cost flat fee legal advice session. Know what your options are before you act.

Call today and be on your way to getting the answer you need!  (401) 632-6976


Request for Relief Issues in a RI Divorce Complaint Matter!

Picture of Attorney Christopher Pearsall
Atty Chris Pearsall

Authored By:  Christopher Pearsall, RI Divorce Attorney
a.k.a. The Rhode Island Divorce Coach℠

Google+ Christopher Pearsall Profile

Publisher Postings on Google+

In a Rhode Island divorce proceeding the filing spouse is often concerned about the relief that is requested in the divorce complaint itself. 

This is particularly true if the spouse filing for divorce in Rhode Island wants to keep things amicable and is concerned about their husband or wife becoming upset or even fanatical when they receive a divorce complaint that requests something that the other spouse believes is outrageous or unreasonable under the circumstances.

In a divorce complaint many attorneys will prepare a complaint for divorce that requests virtually every form of relief that the filing party might want from the court.  Thus, an attorney may prepare a divorce complaint for filing in the Providence County Family Court that asks for alimony, placement of the minor children, child support and resumption of maiden name.  This may be true even if the attorney has been told by the client that he or she does not want alimony or to resume her maiden name.  

These provisions are often included by the attorney as a precautionary measure to ensure that the client does not waive that relief if something changes and he or she changes their mind after the complaint for divorce is filed.  In truth, it is a good practice when dealing with a client who is undecided or who seems to hesitate about any particular form of relief.

I personally don't disagree with the idea of including every possible form of relief in the request for relief regarding a client so as to make certain that the client has not waived any relief he or she may want after the complaint has been filed.  However, it's best to strike a balance here and discuss the matter with the client.  If the client expressed identifiable uncertainty to the attorney about the specific type of relief requested, it is better as a practitioner to request it in the complaint and ask the client for permission to include the provisions he or she expressly stated were not desired.  If the client is opposed to requesting, for example  "alimony" in their divorce complaint because he or she is afraid that the other spouse will take action to retaliate, then it is a better practice to listen to the client and exclude that provision it the divorce lawyer determines that it would be a marginal alimony case and simply make sure that you include for the client a sentence in the relief requested area of the divorce complaint that you also request "and any and all relief that this court deems fair and just."

You as the client should be aware that in practice things may be a bit different than a strict application of the law.  When the little clause just mentioned above is included in the complaint, then Rhode Island family court judges will generally allow an amendment of the complaint to include the requested relief later in the proceeding if there is a justifiable basis for doing so.

Ultimately, you are the client and you are in charge. If you don't want particular language in your Rhode Island divorce complaint then it is up to you to tell your Rhode Island divorce attorney that you want the language removed.  You may do this even if your attorney advises you that the language should remain for your protection.  This does not mean that your attorney must agree with you, nor does it mean that your attorney must continue to represent you if he or she thinks you are making a grave mistake. 

On the rare occasion an attorney may even refuse to proceed as your counsel if you want to exclude certain language that your divorce lawyer finds is crucial to your case.  Though this may be merely a precaution against any potential malpractice claim against the attorney later, it should be taken as a strong indication that if your attorney is willing to go this far to ensure that the language is included, that you, as the client, should probably defer to your attorney's advice.

In the end, a good attorney will advise you of the various considerations involved but ultimately defer to your wishes on the vast majority of issues even if he or she finds them to be contrary to your best interests.

It is good for the lawyer and client to reach an understanding on all family law issues in order to strike a balance between your personal and non-legal concerns as the client and the advice of an experienced and licensed legal practitioner. 

When in doubt, it is always best for you as the client to make the extra effort necessary to retain a lawyer with a dedicated family law practice who practices regularly (weekly if possible) before the Rhode Island Family Courts.

You are the client.  It's your life.  A good divorce lawyer who cares about your case will discuss all related matters with you and work with you on them to do what is best for you regarding your legal and non-legal concerns.  Once again, it is your life.  Don't settle for anything less than what you want and what you determine is in your best interests.


Why add an alimony request in my divorce complaint if I don't qualify for it?

Picture of Attorney Christopher Pearsall
Atty Chris Pearsall

Authored By:  Christopher Pearsall, RI Divorce Attorney
a.k.a.  " The Rhode Island Divorce Coach ℠ "

See Me on Google+

Find My Publisher Information on Google+

The best way to understand the request for alimony in a divorce complaint is by an example.

Let's say that Jillian and Sarah are a same-sex couple that were married in the Commonwealth of Massachusetts some time ago but for many reasons their relationship has broken down due to incompatibility.  Both Jillian and Sarah make about $45,000 and $57,000 respectively and they each have a fairly good job history that shows they will each be able to take care of themselves once a divorce is complete.

Jillian files for divorce in Rhode Island and Sarah counterclaims for divorce both upon the grounds of irreconcilable differences.  Sarah is of the understanding that Rhode Island is substantially rehabilitative in nature and she doesn't need any rehabilitiation.  Sarah realizes that she has a good long-term job so she's not concerned in the least about alimony from Jillian.  Therefore, as a matter of principle, Sarah does not ask for alimony from Jillian and does not ask that Jillian be denied alimony from her.  Sarah is not really concerned about the alimony aspect of divorce because she's confident she can take care of herself once the divorce is over.

Jillian just follows her lawyers advice and while she doesn't intent on pursuing the alimony portion of her divorce complaint she includes it in her complaint because her lawyer does not want her to waive such a valuable right.

During the divorce, Jillian gets in a horrible car accident and he can no longer work anymore.  She is permanently disabled for life and no one is admitting to liability.  Jillian's lawyer speaks to her because he realizes that if Jillian doesn't get some long term alilmony from Sarah then Jillian is not going to be able to make ends meet due to her permanent disability.

Sarah is surprised at the request for alimony and feels that since the accident wasn't her fault that she should not have to pay the price for an accident that she had no part in.  Nonetheless, Sarah finds herself on the receiving end of a very serious and substantial claim for alimony because essentially Jillian has no choice otherwise she won't be able to fianancially survive.

While this is an extreme example, it is not uncommon.  Accidents happen during divorces and sometimes necessitate alimony claims.  Alimony is a protective measure, not a punitive one.  It is intended to make sure that the parties involved who are claiming alimony are deserving of it and that it makes sense.

If you were to fill out a divorce complaint are you going to leave the request for alimony out of your request for relief due to pride, out of an abundance or respect for your partner, or because you don't think it would be fair?  Or would you be cautious like Jillian did?

Divorce proceedings are also about protecting unforeseen events.  Are you ready not just for the Alimony question but for the others that may come along.  Have you correctly worded your divorce documents so that you do not waive your rights by accident?

Remember, lawyers don't go to law school and beat their heads against the wall for nothing.  Everything has a reason and there is a reason for everything and even one misplaced word can mean the difference between protecting yourself and finding out that essentially "your screwed."  Sorry for the vernacular there.  Words failed me in that instance.  it happens to the best of us.


A Major Reason to Include a Request for Alimony in Your RI Divorce Complaint by a Rhode Island Family Lawyer!

On November 27, 2012 I wrote an article entitled "Why Did My Lawyer include Alimony in my Divorce Complaint When I Don't Want It?" in my blog at RhodeIslandDivorceTips.com.  The content of that article was responding to a person who did not understand why their Rhode Island lawyer might include a request for alimony in the divorce complaint when the person (i.e. the client) told the attorney that the client didn't want alimony.

 This article on alimony explains more specifically the type of situation that a lawyer might anticipate by including a request for alimony on the client's behalf.

As I mentioned in the previous article, alimony is one of those subjects that if not requested in the complaint for divorce might be considered waived by the client if not contained in the initial complaint.  Therefore, it is extremely important for both the client and the attorney to carefully consider whether a request for alimony should be left out entirely in the divorce complaint.

Though it may be rare, lawyers and clients should consider even the rarest of circumstances when excluding an alimony request.

Consider the following situation:

Tamara wants to divorce her husband, Jonathan and decides to represent herself to prepare the paperwork.  Tamara is a relatively successful graphic artist and has a bright future. She does not include a request for alimony from Jonathan in her divorce complaint.

Before a Final Judgment is entered in Tamara's divorce she is accidentally hit by a delivery truck. Tamara is now confined to a wheelchair for life and her main drawing hand is partially crushed.  Tamara's promising future has come to an abrupt end.

Tamara is now disabled and needs help caring for herself and supporting herself.

Tamara files a Motion for Alimony in the Rhode Island family court since a Final Judgment has not entered.  The judge determines that because Tamara never included a request for alimony from Jonathan that any request for alimony was effectively waived regardless of the change in circumstance.

This is only one of many possible circumstances that can happen that make it important to include an alimony request in a divorce complaint.  This is true even if the person filing the complaint or counterclaim for divorce doesn't expect to receive alimony from their spouse at all.

 As you can tell from reading this article, including a request for alimony in your divorce complaint or counterclaim is meant to protect a valuable legal right that you have available to you.  Sometimes it is merely included in your divorce documents only to protect you from that rare instance like Tamara's case.  In most cases, leaving the language out entirely is not a risk worth taking.

Remember, none of us can predict the future with any degree of certainty no matter how well we plan or how well we think we know our spouse.  In the example regarding Tamara, she chose to leave out the language and I am certain she would have regretted it.  

It may help to think of it this way.  Including the language in your complaint or counterclaim for divorce is not to anger your spouse, it is not for revenge (or, in my humble opinion should not be used that way), rather it is the protection of a valuable legal right that may be lost forever if it is not included in your divorce complaint or counterclaim.

 

My Very Best to You in Addressing Your Family Law Issues,

Attorney Christopher A. Pearsall aka "The Rhode Island Divorce Coach."®

 

Serving Rhode Island Families exclusively in the Rhode Island Family Courts throughout our State for more than 12 years.

Call (401) 632-6976 for your low-cost paid advise session to make sure you know your rights.


Why Did My Lawyer include Alimony in my Divorce Complaint When I Don't Want It?

I hired a lawyer for my divorce in Rhode Island and my husband was all upset when he got served with papers that said I wanted alimony when I told the lawyer I didn't want alimony.  Why would my lawyer put something in my divorce complaint that I didn't want?

I've heard quite a few people who come to me when they aren't happy with their lawyer right from the start.  Yet as I tell everyone, I don't sugarcoat things.  Invariably I ask why the person is  asking me that question instead of the lawyer that was hired.

Divorce complaints are signed and sworn to under oath by the person who files them.  Therefore, if you are person doing the filing (i.e. the Plaintiff), then you should ALWAYS read your Divorce Complaint and approve of the language that is included in it before you sign it and swear to it under oath.  

With that said, there is often a very good reason for including a request for alimony in a divorce complaint.  Typically, the general rule is this - if you don't ask for alimony in your divorce complaint then it is very likely that the Family Court Judge will take the position that you have waived alimony permanently and you will not have the opportunity to request it later.  

The point?  Your attorney is probably just protecting you.  

However, you should not sign the divorce complaint without asking the question and understanding the answer.  It is NOT acceptable for a lawyer to simply tell you that it is just "standard language" and that it must be included.  That is neither correct nor is it true.  

If you instruct your attorney to remove a request for alimony from the divorce complaint then he or she must do so.  Remember, you are the client.  You need to know your legal rights, your options, your alternatives, and the possible consequences.  You should be instructed by your lawyer on those matters.  However, as the client YOU and not your lawyer should make the decision regarding the language.

Are there other reasons why a lawyer might recommend that you include a request for alimony in your divorce complaint.

Absolutely!  However, that is for another article.

 

My Very Best to You in Addressing Your Family Law Issues,

Attorney Christopher A. Pearsall "The Rhode Island Divorce Coach."®

Serving Rhode Island Families exclusively in the Rhode Island Family Courts throughout our State for more than 12 years.

Call (401) 632-6976 for your low-cost paid advice session to make sure you know your rights.

 

My Very Best to You in Addressing Your Family Law Issues,

Attorney Christopher A. Pearsall aka "The Rhode Island Divorce Coach."®

 

Serving Rhode Island Families exclusively in the Rhode Island Family Courts throughout our State for more than 12 years.

Call (401) 632-6976 for your low-cost paid advise session to make sure you know your rights.