Alimony vs Child Support: What are the differences?
On this episode of A Wiser Retirement™ Podcast, Casey Smith and Missie Beach, CFP®, CDFA® are joined by guest, Leslie O’Neal, Family Law Attorney. They talk about the differences between alimony and child support, the factors that determine alimony, different types of alimony, and why alimony is not as common anymore.
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Summary
Determining Alimony Payments
Alimony can be a dicey concept, it is discretionary and dependent on the payor’s ability to pay and the receiver’s need. It’s decided by a judge and can depend on their interpretation of various factors like length of marriage, financial resources, and health of the parties. Negotiating alimony can be difficult, especially when households have limited disposable income and the costs of sustaining two separate households add up. It does not have a definitive end, except in cases where a court loses jurisdiction over the adult children. Overall, it is becoming less expected, especially if the recipient is able to work.
Determining Child Support Payments
Child support, on the other hand, is relatively straightforward and based on a formula using parents’ gross monthly incomes. The determination becomes more ambiguous when dealing with self-employed or parents pad via commission. Child support ends when a child turns 18 or when they graduate from high school, whichever comes sooner.
2 Types of Alimony
Rehabilitative alimony and lump sum alimony are two different types of alimony. Rehabilitative alimony is paid to allow one spouse to get back into the workforce, but it is awarded less frequently due to the increase in working women. Lump sum alimony is awarded instead of regular alimony payments, and it is less common.
Why is alimony not as common?
Alimony is becoming less expected as more women join the workforce and become financially independent. Forward-thinking judges are also a reason it is not awarded as often anymore.
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