Everyone has concerns about financial security at the end of a marriage. If either 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. This conversation can be stressful, especially if you earn significantly less than your spouse.
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 questions 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?
In Collaborative Law, we have a structured, non-judgmental process for helping each spouse determine what their financial needs will be post-separation, what their expenses and incomes will likely be, and how each spouse can meet his or her financial needs, both in the short term, and in the long run.
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 moving forward.
For example, alimony payments can be affected by tax law. The Tax Cuts and Jobs Act (TCJA) that passed in 2017 means that spouses who pay alimony can no longer claim those payments as a tax deduction, and spouses who receive alimony are no longer required to report those payments as income.
Our goal is always to help our clients reach solutions that make sense to them and for their families.Leave a reply