Alimony in mediation and collaborative divorce

When you hear the term “alimony”, there’s a tendency to think there’s no way a divorcing couple could ever agree. Hence, there’s often an assumption that divorces where alimony is involved might not be good candidates for mediation or collaborative divorce. With the new alimony statutes in Massachusetts, where alimony terms are now more clearly defined, mediation or collaborative divorce are still the best options for divorces that might include of what makes mediation or collaborative divorce a better option stems from the interrelationship between alimony and child support. Any weekly support payment can be designated as either all child support, all alimony or a combination of both.  There are pluses and minuses for each designation.

Some judges prefer one option, others prefer a different approach.  It literally varies from judge to judge. Thus, your result might be determined by your judge’s personal preferences rather than your individual needs. For couples going through mediation or collaborative divorce, the options around child support and alimony can offer negotiating opportunities that might not be available in a litigation setting and often result in outside-the-box solutions.

In collaborative divorce, in particular, divorcing couples typically work with experts to address things like finances, child support, college, etc. Many collaborative teams retain financial experts to assist in making financial decisions. These financial experts will analyze options available to the parties and often propose solutions. The use of alimony versus child support is one variable that can provide flexibility for divorcing couples, depending on the particular situation.

For example, child support is paid with after-tax income by the payor and is not considered income and therefore not taxed to the payee. Alimony, on the other hand, is tax-deductible for the payor and must be declared as income by the payee. If the parties are in different tax brackets, it might benefit the payor from a financial and tax strategy standpoint to pay alimony and benefit from the tax deduction as opposed to child support.  The payor might be willing to pay a larger weekly amount in order to get the tax benefit and also to offset the taxes that will be incurred by the payee. The payee may prefer to receive a larger support payment designated as alimony, even though he/she would have to declare and pay taxes on the income, rather than a lower child support payment. A financial expert is critical to this type of analysis as there are a number of related tax regulations that will need to be considered when crafting an alimony/child support designation.

Timing can also play a part in the alimony negotiation. Child support can last up until age 23 if your child is a full-time college student or 18 if your child enters the workforce after high school. The duration of alimony payments under the new alimony law is determined by the length of the marriage and/or relationship.  In litigation, you might receive a child support order that is going to end in just a few years because of the ages of your children, requiring you to go back to court for alimony.  In mediation and collaborative divorce, the parties can anticipate future events and plan around them to save the necessity of future trips to court.

What the alimony and child support options do, as part of mediation and collaborative divorce, is put more control in the hands of the divorcing couple. A judge, though learned and experienced, does not know your situation. He or she will most likely follow the formula laid out in the law to the letter with little or no flexibility. By considering alimony or introducing it as an option in mediation and collaborative divorce, you can create some flexibility to reach an agreement that best meets the needs of all parties.