Spousal maintenance (also referred to as “alimony”) is an issue that our New Mexico Divorce Lawyers receive many questions about. Whether a party to a divorce is concerned about becoming the recipient of spousal maintenance payments or the party ordered to make such payments, the judge’s orders regarding this issue can have a significant impact on both spouses’ long-term financial prospects. Despite the importance of alimony in a New Mexico marital dissolution proceeding, this is an issue that is easy for people to be confused because no formula exists to calculate alimony so this issue can be one where it is difficult to make definitive predictions. There are a range of issues that people are confused about when it comes to spousal maintenance in New Mexico so we have addressed three of these issues below.
What is the tax impact of spousal maintenance payments?
This is a consideration that many spouses who attempt to enter into a marital settlement agreement without attorneys never consider despite the significance of the issue. Alimony is considered income to the recipient spouse so it must be included as gross income when filing a tax return with the IRS. Because the tax impact on the recipient spouse can substantially impact the net amount received, this issue must be considered so that both parties understand the actual amount that the recipient spouse will receive. It is also important to keep in mind that the paying spouse can deduct alimony payments when filing a tax return.
How can I calculate the estimated amount of alimony that I will receive so that I can take this into account when negotiating other issues?
The problem is that there is no mathematical formula for calculation of spousal maintenance, so the amount of alimony that is awarded can be very difficult to estimate. One way to deal with this problem is to negotiate a global settlement that defines the amount and duration of alimony in the context of property and debt division. Because alimony awards vary greatly between courtrooms and even within the same courtroom even when the facts are similar, a negotiated settlement can remove the unpredictability of relying on a New Mexico divorce judge to make this determination.
If I completely supported the other spouse during marriage, why won’t the judge insist that he/she relieve me of this burden once we are divorced?
Many spouses (typically husbands who are the primary breadwinner) find it counterintuitive that a recipient spouse’s right to alimony as well as the duration of the payments increases if the paying spouse provided most or all of the household income during the marriage. The financial dependence fostered by this type of financial structure in the household makes alimony more necessary for the supported spouse. Further, the court will presume that the ability of a paying spouse to achieve career advancement was aided by the other spouse focusing on domestic responsibilities like taking care of the kids and the family home. This general rule is why negotiating a prenuptial agreement prior to marriage that anticipates and defines future alimony obligations can be a valuable strategy.
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The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.
If you have questions about spousal maintenance in a New Mexico marital dissolution, the Jay Goodman & Associates offers a free consultation in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your situation and answer your questions. Call us today to schedule your free consultation at (505) 989-8117 to learn about your rights and options.
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