Interviewer: It seems as if the court will put child support before alimony. For example, if you have limited resources, and there’s only so much to give, will the court favor a higher child support and a lower alimony if the two have to be traded off against each other?
The Tax Consequences Are a Factor in Determining the Amount of Child Support and Alimony
Tanya: It depends on the individual facts. It may make more sense, dollar and cents wise to give the money to the mother as alimony because of the tax consequences. So that at the end of the day the same dollars that dad has in his pocket are taxed at a higher rate than if they went to mom’s pocket
And so if the courts instead award it to the wife as alimony, the family would actually have more money to live on. Because sometimes it’s not that the courts are thinking of the children as more important than the wife. It really could be just the actual calculation based on the tax factors. Where does the money make more sense to be?
Interviewer: So, I’m amazed at how complicated it is.
Tanya: It can become complicated. This is because obviously if you’re going to lose $5,000 to the IRS if you leave it with father and you call it child support, but if you give it to the wife, the whole family saves $5,000. Doesn’t that make more sense?
A Qualified Matrimonial Attorney Can Advise You on the Best Resolution
Interviewer: It also speaks to why you should have a qualified matrimonial attorney because I didn’t know any of these issues existed.
Tanya: Yes, and you need an attorney who knows how to do calculations, which are math really when you’re dealing with finances. But it’s really very important to understand business. That is one of my firmest beliefs. It’s very important to understand liabilities, debt, and tax implications as a matrimonial lawyer.