What to Expect when Expecting Marital Litigation
During any divorce or separation of a marriage there is frequently a question of whether one spouse or the other is entitled to receive spousal support or alimony from the other. The answer to this question depends on a number of factors and is in the complete discretion of the trial judge. The Court of Appeals in South Carolina has determined that:
Alimony is a substitute for the support which is normally incident to the marital relationship.” Lide v. Lide, 277 S.C. 155 S.E. 2d 832 (1981). Ordinarily, the purpose of alimony is to place the supported spouse, as nearly as is practical, in the position of support she [he] enjoyed during the marriage. See Voelker v. Hillock, 288 S.C. 622, 344 S.E.2d 177 (Ct. App. 1986).
Section 20-3-130, Code of Laws of South Carolina, 1976 defines six types of spousal support than may be awarded by the family court: (1) periodic alimony; (2) lump sum alimony; (3) rehabilitative alimony; (4) reimbursement alimony; (5) separate maintenance and support; (6) such other form of spousal support, as the court determines just and appropriate under the circumstances. Lump sum and rehabilitative alimony awards are not favored and may require special circumstances to justify departing from the normal preferred permanent, periodic alimony or if done by informed consent of the parties.
Factors for the trial court to consider in awarding alimony were established by the Supreme Court as follows:
(1) Financial condition of the parties;
(2) Needs of the party seeking alimony;
(3) Age and health of the parties;
(4) Respective earning capacities and individual wealth;
(5) Contributions to the accumulation of their joint wealth;
(6) Conduct of the parties;
(7) Standard of living of the parties at the time of the divorce;
(8) Duration of the marriage
(9) Ability to pay alimony; and
(10) Their actual incomes;
Other South Carolina case law added the following additional factors for consideration:
(11) Special circumstances that might justify some other form of alimony;
(12) Tax consequences;
(13) The Equitable distribution award.
Alimony or spousal support must be requested in the pleadings when a complaint for Divorce and/or Separate Support and Maintenance is filed with the court. Do not enter into a binding agreement without knowing your legal rights. If you are going through a divorce or considering a divorce or separation, consult with an attorney to learn your rights as it relates to alimony and spousal support.
 Id. Lide v. Lide, 277 S.C. 155, 283 S.E.2d 832 (1981).
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I recently came across an article in the New York Post titled “How to Handle the Financial Pitfalls of Divorce”. Naturally, I was intrigued as this is one of the main areas of concern for anyone going through a divorce or thinking about separating from their spouse. As the article summarizes, it is nearly impossible to go through a divorce without financial frustration. Dividing assets is a cumbersome and often lengthy process. One way to potentially ease the pain of the process is by becoming familiar with both your and your spouse’s assets and debts and gathering as much information regarding the assets and debts as you can. Once parties separate, gathering information is one of the biggest and most expensive parts of the divorce process. Beginning the separation or divorce process with as much knowledge of your assets and debts is one way to handle the financial frustration that often accompanies divorce.
During the beginning of each new year, our clients often have questions regarding how their family law case will impact their taxes. One of the issues that parents going through a divorce or child custody case must resolve is which parent will claim the children on their tax return. The dependent exemption can result in big tax savings to the spouse or parent who is able to claim the children on their tax return.
The dependent exemption reduces the party’s taxable income. For the 2016 tax year, the dependent exemption is $4,050 for each child which is a substantial decrease in taxable income, especially if there are multiple children.
The IRS has clearly defined guidelines that answer the question of who will claim the children on their tax return. It is the “custodial parent” who will be able to claim the children on their tax return.
A custodial parent is defined by the IRS as:
“The custodial parent is generally the parent with whom the child lived for the greater number of nights during the year. The noncustodial parent is the other parent. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income”
During a divorce or child custody case, the custodial parent may release their claim to the dependent exemption. The custodial parent may desire to do this for various reasons. For instance, the custodial parent’s taxable income may be too high and thus the exemption is phased out or the parties may have agreed to alternate the exemption each year. If the custodial parent is releasing their claim to the exemption, then the custodial parent must fill out IRS Form 8332. This form allows the custodial parent to release their claim for one individual year, certain specific years (i.e. even or odd years), or for all future years. The noncustodial parent must attach Form 8332 to their return each year that they are claiming the children on their taxes.
The issue of dependency exemptions in a divorce or child custody case is a complex issue. Family law cases can last over a year before there is a final resolution. Both parents may feel entitled to claim the children while their case is pending but absent a written agreement and a signed Form 8332, the custodial parent as defined by the IRS will be the parent who claims the children on their tax return.
It is best to discuss this issue with both an attorney and an accountant. If you would like to set up a consult with Christophillis & Gallivan, please call our office at (864)233-4445.