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Q Can you help me understand why my attorney is recommending that I settle for less than the law requires? He insists that I take up my husband’s offer to pay me just 20% of his bonus as alimony on top of the child support I get. I am staying at home with our four children and my husband has a big job that requires a lot of travel so I cannot work at the moment even if I wanted to as he can never help. My former teacher’s salary is less than what I would have to pay for childcare if I went back to work.
My attorney says that my husband’s salary is used solely to calculate child support and that only his bonus is available for child support. I can live with that, but my husband gets huge bonuses sometimes – it’s been a million dollars in the last two years. The alimony law says I’m entitled to 30-35% so I can’t understand why he’s telling me to only settle for 20%. Am I missing something or do I need another attorney?
A When the law changed a few years ago and alimony was no longer taxable income for the recipient and no longer deductible for the payer, the Family Law Bar recognized the unfairness of continuing to apply the percentages set out in the Alimony Reform Act. The Child Support Reform Act was drafted at a time when there were tax implications for child support payments, so it was fair. Now if we apply these numbers, your husband could find himself in a situation where he pays 38% (or more) of his bonus in taxes to the state. If he then has to pay you 30-35%, he only sees 27-32% of his bonus. The question becomes one of fairness and incentive. Is it fair for him to work and keep less than you? In other words, if he’s being forced to pay you more than he’s allowed to keep, what incentive does he have to keep working as hard as he’s likely to do to earn that level of income?
You may think it’s perfectly fair because you’re doing the hard work of raising the kids. You wouldn’t necessarily be wrong. However, I have yet to see a judge order that the payer’s spouse receive an equal or lesser amount of their after-tax income than the recipient’s spouse.
It would be great if legislators solved this problem by amending the alimony law to reflect the current percentages used by most practitioners now that alimony is no longer taxable so that people have confidence in lawyers’ advice.
Email questions to whickey@brickjones.com
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