Prenuptial agreements are designed to predetermine various aspects of a divorce in order to avoid or at least minimize litigation. These types of agreements, which are common among spouses in Alabama and other states, will decide issues of property division and spousal support. A strong prenuptial agreement will stand up against any legal challenge to the validity of its terms in court. One couple’s prenuptial agreement was put to the test recently in court when the wife attempted to challenge the validity of the agreement. Apparently, the couple had mutually waived their rights to spousal support when they signed their prenuptial agreement in 1999. The wife filed for divorce in 2009 and was able to convince the judge in the trial court to award her $3,500 per month in spousal support for the period of 49 months, despite the prenuptial agreement. The trial court judge ruled that forcing the wife … Continue reading Court upholds spousal support waiver upon appeal
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Alabama couples to avoid contingency pitfalls in alimony
Alabama residents who are considering divorce may want to be aware of a pitfall relating to tax deductions. The U.S. Tax Court recently denied a man’s alimony payments that were deducted in 2008. Although his divorce decree stated that the alimony could be deducted and that his wife should report the received payments as income on her tax returns, the termination contingency on the divorce decree invalidated that stipulation. According to the man’s divorce decree, he had to pay a specific amount in alimony per month. His ex-wife was also eligible for a 40 percent portion of his bonus. It was stipulated in the decree that these payments would both terminate in the event of the ex-wife’s remarriage or the demise of either one of the two parties. However, the first termination condition on the decree stated that payments would be cancelled when the youngest child reaches high school graduation. … Continue reading Alabama couples to avoid contingency pitfalls in alimony →
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Alimony payments may be considered tax deductible
Although many people might not know exactly what to expect when deciding to file for divorce, it will certainly provide lifestyle adjustments. Of course, couples can work together to ease that transition for themselves and any children involved in the split. Some people may consider requesting alimony payments as part of a financial settlement. Spousal support in this form isn’t a mandatory aspect of divorce, but it can help ease some financial difficulties created by divorce. For example, one spouse may have a much higher income than the other. During marriage, both individuals become accustomed to the lifestyle associated with sharing income, so alimony payments can help balance out changes caused by living with a single income. Of course, before drawing any conclusions about a divorce settlement, it can be helpful to be aware of the ramifications for specific decisions. When couples reach an alimony agreement, for example, they may … Continue reading Alimony payments may be considered tax deductible →
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