A seldom used tool in divorce

Typically a divorce will have two possible areas where money exchanges hands on a monthly basis from one party to another. Those two areas are child support and maintenance, which is the term Wisconsin law uses for alimony. Whether or not one or both of these types of payments is an issue depends on the facts of each specific case. In some cases, both child support and maintenance payments are due from one party to another. That specific situation is where family support comes in.

In recent decades family support has fallen out of use. The reason for this is simple - It was cheaper for both parties to define two separate payments; One payment for child support, and one payment for maintenance. Maintenance payments are tax deductible to the person making them, leaving more money available for both parties. As of January 1st, 2019 this will no longer be the case. Maintenance payments will no longer be tax deductible under the new tax bill.

This may eliminate the trend for divorces to have two separate defined payments as described above. There will be no need from a financial standpoint to separate the two forms of payment. Family Support payments are the combination of child support and maintenance combined into one payment. This can often be an effective negotiating tool. Consider this scenario:

A divorcing couple has three children, ages 17, 15, and 13, and they have been married for 25 years. Party A significantly more than Party B. Party B has primary placement of the children. Party B may be entitled to a term of maintenance in the vicinity of 12-13 years. Party B is also entitled to child support. As the children grow older and graduate high school, the child support obligation for Party A would go down, but maintenance may go up to make up for that difference. With separate orders for child support and maintenance the parties may have to return to court each time a child graduates in order to set the new support amounts. With family support, one total amount is ordered, and that amount does not change until the payments end 12-13 years from now. This saves the parties money from return court trips, simplifies the process, and no longer will have negative tax consequences for either party.

If you are going through a divorce where maintenance and child support are an issue be sure to consult an attorney who is able to navigate these murky waters creatively, to your benefit. And, don't forget, if you would like a free consultation on your issue please do not hesitate to contact us.

Click here for a brief article on this same issue.