Spousal maintenance and alimony disputes are often one of the more contested aspects of divorce in Houston. Whether you are a prospective spousal maintenance payor or recipient in your case, obtaining experienced legal counsel is vital. Our Houston spousal maintenance attorneys will help you pursue an equitable resolution for spousal maintenance in your case.
Understanding the Tax Implications of Alimony in Texas
When it comes to alimony, it's important to understand the tax implications, especially in the state of Texas. Alimony, also known as spousal maintenance, can have tax consequences for both the payer and the recipient. Our experienced alimony lawyers in Houston can provide guidance on the tax implications of alimony and help you navigate the complex tax laws.
Key points to consider regarding alimony and taxes in Texas:
Tax treatment of alimony payments
Reporting requirements for alimony recipients
Impact of alimony on tax brackets
Tax deductibility of alimony payments
Tax consequences of modifications to alimony agreements
Understanding the tax implications of alimony can have a significant impact on your financial situation. Our team at Diggs & Sadler is here to provide expert legal advice and support to ensure that you are well-informed and prepared for the tax aspects of alimony in Texas.
What is the difference between maintenance and alimony?
In Texas, 'maintenance' and 'alimony' are used interchangeably to refer to the financial support paid from one spouse to the other after a divorce. There is no legal difference between the two terms in the state of Texas.
Can a prenuptial agreement affect spousal maintenance?
Yes, a prenuptial agreement can impact spousal maintenance in Texas. If the agreement contains provisions regarding alimony or spousal support, it may influence the court's decision on the issue.
Is spousal maintenance taxable in Houston, TX?
Yes, spousal maintenance is taxable income for the recipient and tax-deductible for the payor in Houston, TX. It is important to consider the tax implications when negotiating spousal maintenance.
What happens if the paying spouse fails to make maintenance payments?
If the paying spouse fails to make maintenance payments, the recipient can seek enforcement through the court. Legal remedies may include wage garnishment, property liens, or other means of collecting the unpaid maintenance.
What Is Spousal Maintenance in Texas?
Unbeknownst to many, spousal maintenance and alimony are actually two different forms
of
post-divorce
support
to
be paid
by
one
ex-spouse
to the
other in Texas.
Spousal maintenance is defined by the Texas Family Code as an award of periodic payments
from
the
future
income
of
one spouse
for
the support
of
the
other
spouse
in
a divorce.
Maintenance can be ordered by a court even if one party disagrees with the need for
it.
For
example,
a judge
could
order
spousal
maintenance
such
that
a party
must
provide
their
ex with a
certain
amount
of money
per
month,
even
if
the person
responsible
for paying
disagrees
with the order.
However,
to
engage
in
a contractual
alimony
arrangement
in Texas,
both
sides
must
agree
on the need
for alimony
and enter
into
an alimony
agreement for the court
to approve.
Who Qualifies for Spousal Maintenance in Texas?
During divorce proceedings, either spouse may request spousal maintenance from the
other.
However,
the Texas
Family
Code
specifically
limits
the
circumstances
under
which
a Texas
court
may
order
spousal
maintenance.
A Texas court
may order
spousal
maintenance
only if
the recipient
spouse,
upon divorce,
will
lack sufficient
property,
i.e.
assets,
to
fulfill
their
basics
needs,
which
the Texas
Family
Code
describes
as the spouse’s
“minimum
reasonable
needs,”
and
at least one
of the
circumstances
below exist:
The paying spouse has a conviction for family violence against the other spouse or
their
child
within
two
years
of filing
for divorce
or while
the
divorce
was pending.
The requesting spouse can't earn sufficient income to support themselves because
of
an incapacitating
physical
or
mental
disability.
The couple's marriage lasted at least ten years, and the dependent spouse does not
have
assets
nor
the ability
to earn
an
income
that
meets
their
basic
(minimum
reasonable) needs.
The spouse requesting alimony is responsible for a child, including an adult child,
of
the marriage
who requires
significant
care
or supervision
due
to
a
physical
or
mental
disability
that prevents
the
parent
from
earning a living.
There are multiple considerations that the court may take into account in determining
the amount and duration of spousal maintenance.
Below are the factors considered when determining the amount of alimony in TX:
The spouses’ ability to provide for their individual needs;
Prior education and any employment skills of each spouse, and the amount of time
needed to seek education or training by
the supported
spouse
to
become
financially
independent in the future;
The length of the marriage;
Age, previous employment history, earning capabilities, and physical and emotional
state of the person pursuing spousal support;
The impact of a child support order on the paying spouse’s ability to pay spousal support;
Any assets either spouse brought into the marriage;
Marital misconduct, such as adultery or abuse, by either person throughout the time
they were married;
Any individual spouse's contributions as a homemaker; and
If either person contributed to their spouse's training, education, or increased
earning potential during the marriage.
Many factors affect whether alimony can or will be awarded in a divorce proceeding
and how long the support will last. The following variables are just
some
of
those
factors and the reasoning for their impact:
Disability:
A spouse seeking maintenance who also has a disability may obtain an award for alimony
for the duration of the disability.
The non-breadwinning spouse's ability to find work:
A judge will typically consider the spouse's employability in determining whether
the court should order maintenance.
Financial abuse or control:
If either spouse has committed financial abuse by wasting, destroying or fraudulently
concealing the couples’ assets, the judge must weigh whether
or
not
such
circumstances
warrant either the denial or the imposition
of
spousal
maintenance
to compensate
for such treatment and
limitations,
as well
as weigh those
factors in determining
the
amount and duration
of the
maintenance to be awarded.
Premarital agreements:
If a valid prenuptial agreement exists and addresses alimony, a judge will consider
the deal when determining and ordering the alimony.
Although the above is not an exhaustive list of concerns and considerations a judge
will weigh when awarding alimony, it provides examples of the variance
in
issues
analyzed by a judge. A judge will use the items on the list
(and
potentially
more)
to grant or deny you spousal support.
Before you try to navigate these tricky and complicated legal waters on your own,
contact Diggs & Sadler to schedule a consultation and determine
what
the
strengths
and weaknesses are in your case.
Temporary alimony is spousal support that will provide the funds needed during the
divorce proceedings until a more permanent agreement is reached. Filing
for
temporary
alimony can be the answer you need to continue caring
for
both
yourself
and your family.
You should consider filing for temporary alimony if any of the following apply:
You have given up a portion or all of your assets for the marriage
You need spousal support to make ends meet
The divorce proceedings are lengthy
While filing for alimony of any kind can be a complicated process, a spousal maintenance
lawyer can make the process much easier.
Most maintenance does not indefinitely. However, some special circumstances favor
long-term payments. For example, if one spouse
gained
custody
of a
child
with
a disability,
they
might require
lifetime
maintenance.
This is also
the case
when maintenance
is
awarded
to a spouse
who
is disabled
to the
point of incapacity.
Lifetime
maintenance
is
the
informal name for maintenance
ordered because
of
a specific
condition.
In other cases, the duration of maintenance payments depends on how long the marriage
lasted. Texas law places the following time limits
on post-divorce
maintenance:
Five years if the couple's marriage lasted 10 to 20 years;
Seven years if both parties were married 20 to 30 years;
Ten years if the marriage lasted at least 30 years.
The amount of maintenance to be paid each month under Texas law is limited to the
lesser of $5,000 or 20% of the paying ex-spouse’s
gross
monthly
income.
But
the most
important limit
on the
payment
of maintenance
in Texas
is
the statutory
presumption
that
maintenance is not
warranted for
an
ex-spouse
who is
not disabled
or caring
for
a disabled
child, unless
that
spouse
has diligently
pursued obtaining
employment
and developing
skills to meet
his or
her minimum reasonable
needs
during
separation
and
while the divorce
case is pending.
Alimony agreements are legally binding documents that must be honored by both partners
for their full duration. But court-ordered maintenance
in
Texas
can
be
modified.
You may need to pursue
modification
if your
agreement
has become
unrealistic
considering
your
current financial
capabilities.
Texas law limits maintenance payments to 20% of the paying individual's average gross
monthly income or $5,000, whichever is lower.
The exact
amount
that
was
ordered
to
be paid every
month depended
on multiple
factors, including
the payor's
salary.
If,
at
any time, the person
paying alimony experiences
a decrease
in salary
or other
financial
change,
he or she could request
that
the court modify the
alimony
payment.
As either
party’s situation
changes over time,
these and
other
factors
may be considered
in decreasing
maintenance. Texas
has no
law that permits
the increase
of maintenance,
regardless
of the severity of the need.
How to Modify Maintenance in Houston, TX
To modify maintenance, you must file a new petition or lawsuit and have it served
on the other party. You must be prepared to provide sufficient evidence
to
prove
good reason to change the terms. Texas law requires the petitioner—the
requesting
party— to prove a material and substantial change in circumstances.
Alimony was once deductible under the US Tax code, but the alimony tax deduction
was repealed by federal legislation. As a result,
contractual
alimony
agreements
are not used as
often in divorce
as they
were
in the past.
Neither alimony
nor
spousal
maintenance
are deductible.
If you're the person paying alimony, you're required to continue paying despite getting
involved in a new relationship or marriage. However,
your
obligations
to
make
alimony
payments cease
if
your former
spouse remarries.
It's not a legal requirement to seek a modification in your court-ordered maintenance
when your ex remarries, because at that point,
your
obligation
to
pay maintenance
terminated—which
is nice,
if you know
about
it. If
you continued to pay
alimony
because
you were
unaware
that your ex
remarried, you
could file
suit to get
your
overpayment back.
In situations where the recipient enters a new live-in romantic relationship, alimony
payments may terminate if the court so finds.
Even
if your
former
partner
doesn't
get remarried
but simply
cohabitates
with a romantic
partner, a
court
could
order
an end to your
maintenance payments.
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