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Articles Posted in Alimony

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law-series-4-1467436-300x226By:  Jessica A. Saldin

In prior, recent blog posts, I overviewed both the impact the federal tax changes will have on maintenance (alimony) awards starting January 2019, as well as the revisions to Colorado’s maintenance and child support laws to account for the tax code changes.  The purpose of this blog post is to provide concrete examples of the difference between the pre-August-2018 maintenance and child support laws and the new ones which started this month.  

Since the statutory changes are going to have more of an effect on maintenance awards entered after December 31, 2018 (any maintenance awards entered before that date would remain tax deductible for the payor) this blog post will use the 2019 minimum wage amount for the first scenario.  Beginning January 1, 2019, Colorado minimum wage increases to $11.10 per hour.  This is most applicable for situations where a party is not working and can be imputed income (see prior blog posts to determine when this may be appropriate). Continue reading

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denver-capitol-hill-1620432-300x199By:  Jessica A. Saldin

Starting August 8, 2018, there will some statutory changes being made to the Colorado Uniform Dissolution of Marriage Act (the main statute/law that governs Colorado divorce and custody cases).  As these changes may have major impacts on your divorce or custody case, it is important to know what they are.  A few of the statutes are undergoing minor word changes, which are not being discussed in this article.  The major changes, which will be the primary focus of this article, affect the statutes governing spousal maintenance and child support.

C.R.S. 14-10-114 is the statute that governs maintenance (often called spousal support or alimony).  As discussed in a prior blog post, the federal tax code is changing in 2019, with an impact on how maintenance payments are treated for tax purposes.  It used to be that a payor’s maintenance payments were tax deductible to the payor and a recipient’s maintenance payments had to be claimed on the recipient’s taxes as income.  Starting in 2019, the recipient will not have to declare maintenance payments as income; however, the paying party will not get a deduction for maintenance paid.  As mentioned in the prior post, such was anticipated to have an effect on Colorado’s maintenance law because the formula was created with the understanding that maintenance would be tax deductible and taxable, respectively.  As anticipated, the Colorado legislature has made changes to Colorado’s maintenance law to account for these federal tax changes. Continue reading

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house-2-1225477-300x236By:  Jessica A. Bryant

After a divorce decree is entered, there may still be steps that need to be taken to wrap up property division issues (for example completion of forms and orders to divide a retirement account and/or steps to divide the ownership and responsibility for real estate). When a home was jointly titled and jointly mortgaged during the marriage, and one person is keeping the property following the divorce, there are steps to take to finalize the sole ownership of that property item. One such step is changing over the title, which is as straightforward as signing a quitclaim deed and recording it with the clerk and recorder’s office for the county in which the property is located. The more complex step is getting the person that did not retain ownership off of the mortgage. This step is necessary for the protection of both parties. For the party retaining the property, it ensures they have complete ownership of the property, as well as complete responsibility for all liabilities, and can be solely responsible for future decisions for the property. For the person not retaining the property, it is critical to ensure you are removed from the mortgage. If the other person does not pay the mortgage, and you are still on the mortgage, the bank can come after you for recovery of the debt, regardless of what your divorce orders say. Therefore, if the other person will not be able to remove you from the mortgage for the property, it may be important to consider alternative methods of dividing the property, prior to finalizing the divorce, to ensure you are protected from creditors.

It is not uncommon for the individual that is the primary parent of the children to want to retain the house as their property, to ensure consistency for the children. However, depending on the person’s income, they may not qualify to refinance the mortgage into their sole name, which may cause issues for the other parent in terms of protection for credit, ability to qualify to purchase another home, etc. Therefore, before finalizing a divorce case, it is important to consider all aspects of the property division, including whether the party receiving any real estate as their sole property will be able to refinance any mortgages into their sole name.

One aspect that can be considered in determining a person’s qualifications or ability to refinance is whether there maintenance (alimony) orders in the case.  Alimony payments may be considered as “income” for mortgage qualification purposes.   However, alimony payments will only be considered for a refinance if they are court ordered payments, have been received consistently for six months, and will be received for at least three years. These time frames are important because steps you take while your divorce case is pending could actually affect whether a person is able to refinance the home. For example compare the following scenarios: Continue reading

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tax-1501475-300x226By: Jessica A. Bryant

A bill was recently passed that makes several changes to the current U.S. tax law. One such change affects the way spousal support (maintenance/alimony) is treated. Under current tax code related to divorce, the spouse paying maintenance is given a deduction on his/her taxes and the spouse receiving maintenance had to declare the maintenance received as income on his/her taxes. The new tax bill eliminates the deduction for the alimony paying spouse as well as the requirement that it be declared as income by the receiving spouse. However, this change does not go into effect until 2019. Specifically, anyone currently under an order to pay maintenance will continue to receive the deduction, even after 2019, and anyone divorced before 2019 will receive the maintenance deduction as well. For Separation Agreements and initial maintenance awards entered on or after January 1, 2019, though the paying spouse will not receive any tax deduction. Continue reading

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654679896-AlimBy:   Stephen J. Plog

In Part 1 of this post, I gave a basic introduction into the issue of alimony, called “maintenance” under Colorado statute, reasons why either party might seek to modify maintenance orders, and the legal standard for modification of of alimony set forth in Colorado Revised Statutes 14-10-122.

As set forth in Part 1, the general standard to modify alimony is that there has been a substantial and continuing change in circumstances which renders the current orders for spousal support “unfair.”   When looking at modifying Colorado child support, the “substantial” and “continuing” standard is also applicable, with “substantial” actually being numerically quantified as being a ten (10) percent or more change to the monthly child support figure.   When dealing with a modification of alimony, the ten percent threshold is not applicable.  In fact there is no numerical percentage applied.   Whether a ten percent or more change is suggested by the party seeking to modify their alimony orders, they still have the burden of proving, or convincing the court that the modification they are seeking is needed because the current orders are “unfair.”    Thus, the standard and hurdles are greater when modifying maintenance.   Of course, the analysis begs the question of what does “unfair” mean? Continue reading

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654679896-AlimIn any Denver divorce, there is the potential for one spouse or other to be awarded alimony, called “maintenance” under Colorado Revised Statutes.     Alimony is designed to provide financial support for a spouse who is unable to meet his or her reasonable financial needs or pay necessary living expenses in light of the parties getting a divorce.   The specific statutory standards for alimony are set forth in C.R.S. 14-10-114.    Pursuant to statute, there are various, enumerated factors court should look at when determining the issue of alimony.  Those can include income of the parties, resources available to them, any disability one spouse might have, whether one party is caring for an extremely young or disabled child, and the standard of living the parties maintained during the marriage.    The court might also look at whether the prospective payer spouse will have the ability to meet his or her own reasonable financial needs while also paying alimony.

Starting in 2014, statute was amended with the Colorado legislature including a formula for calculating alimony for couples making under a combined $360,000 per year adjusted gross income.   A table setting forth duration based on number of months married was also input into the statute.    Though the formula and duration chart are not mandatory, courts are encouraged to follow them and if they do not, they should set forth the reason(s) why.   Of course there are families making more than a combined $360,000 per year and courts are still vested with discretion regarding the issue, though it is much less gray and much more formulaic than in years past.    Of all the factors statute indicates a court should look at, income is the most important.  A  support order for alimony will ultimately be entered, which will set forth the monthly amount (or other payment terms) and duration of the maintenance.   In most cases, after that support order is entered, support is paid pursuant to the terms and the parties move on with their lives.   However, that’s not the end of the story.   As with any situation in life, things can change.   Statute acknowledges this by affording people the opportunity to modify their alimony orders in certain situations, both as to amount and duration. Continue reading

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divorce3

In a Colorado divorce, reasonable financial needs do matter in a determination of alimony. Reasonable needs matter for both parties, though not to the same degree as previously stated in statute. Much has been made of the new 2014 alimony (properly termed “maintenance”) formula, with individuals often jumping right to the formula without so much as a review of the initial factors in determining maintenance. This can include both family law attorneys and judges alike.

The first part of the statute regarding maintenance, C.R.S. 10-14-114, still includes a review of whether an individual requires maintenance to meet their reasonable needs. The Court must first make this determination of such, which requires a review of whether an individual has sufficient income to cover their reasonable needs or has enough property, either marital or separate, to meet these needs.

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