One of the common concerns people considering divorce often have is how it will affect their standard of living to go from two incomes to one.
In Pennsylvania, the courts divide marital property equitably rather than equally, so a couple will not have a complete idea of the outcome of the property division phase until the judge issues the final order. Alimony may affect the outcome further.
The courts use several factors to ensure consistent and fair property division:
- Earning power and other income, assets and liabilities of each spouse
- The length of the marriage
- The age of the spouses, particularly if they are nearing retirement age
- Tax consequences of the property
- Physical health of each spouse
- Other issues relevant to the specific case
Couples who want to create their own agreement and present it to the judge would be wise to use these factors so that the outcome is likely to be fair and acceptable to the courts. If they are unable to agree, the judge will decide for them.
Alimony awards vary in nature, amount and duration, as well as how a spouse pays. For example, it may be for a short time, to help one spouse make the transition to single life or get settled in a new home. Or, after a long marriage or in the case that a spouse is near retirement, alimony may be permanent.
The Tax Cuts and Jobs Act has changed the way the IRS treats alimony. The payor cannot deduct payments, and the receiver does not claim payments as income. As a result, some couples look for alternatives to traditional alimony. For example, one spouse may take a larger share of the assets during property division rather than receive payments. When spouses work together, they may be more likely to come up with solutions that fit their particular circumstances.