When a couple in Louisiana obtains a dissolution of marriage, there are often continuing financial ties and obligations between them. One big adjustment for everyone concerned is that the divorce usually means that the same overall total income must now be used in some manner to support the routine living expenses of two households rather than one. Often spousal support and child support is paid by one ex-spouse to the other, with major financial and tax consequences.
It is helpful to remember that spousal support or alimony is taxable income to the spouse who receives it, and deductible to the ex-spouse who pays it. Child support payments, in contrast, are neither taxable income to the custodial parent receiving it, nor is it deductible for the parent paying it. The issue of which parent can claim the child as a dependent is determined by specific IRS rules, but these can be modified to a certain extent by an agreement between the parties that can be incorporated in the divorce settlement agreement.
In an increasing number of divorce settlements, the assets held in individual or joint retirement or pension plans must be taken into account and factored in to any property division. Because of the expenses of paying for two households, it is often necessary to downsize the type of housing that one or both ex-spouses live in.
A divorced person clearly needs to re-examine their budget and should not forget to make some provision in it for saving for unexpected expenses. They can no longer count on extra help from the ex-spouse when additional expenses are required for unanticipated reasons.
If you are going through a divorce or contemplating one in the near future, contact an experienced Louisiana family law attorney. Your attorney will work diligently to protect your rights during the divorce process and can help you with complicated legal matters, including property division, child support, spousal support and child custody.
Source: Fox Business, “How to financially readjust for post-divorce life” Andrea Mured, Aug. 02, 2013