When breadwinner spouses in Wisconsin get divorced, they are often most concerned about spousal support. In fact, their financially dependent spouses worry about this too. Will they be eligible to receive it? And, if not, will they be able to make a living on their own after holding back on their career pursuits or leaving the job market altogether for so many years?
In an article published by Business Insider, a man explained that paying spousal support cost him all his disposable income. For 30 years, he worked as the sole or main breadwinner in the family. After the divorce, he agreed that he should help his ex-wife get back on her feet as she learned to find her own financial footing. However, that cost him 20% of his earnings at the time of his divorce.
As he is now a freelancer with no 401(k), he worries about his retirement plans. Now, he regrets not giving better thought to what the judgment of the spousal support agreement would be during mediation. Because of the length of the marriage, he believes the court may hold him responsible for spousal support for the rest of his life.
To avoid this problem, both parties need to better evaluate the financial situation and come to an amicable agreement whenever possible. If an ex changes their mind later on, they may need to return to court to get a different ruling.
NerdWallet also reminds divorcees-to-be to keep the tax effects of spousal support in mind. Because of the recent tax reform, spousal support now counts as a part of the payee’s taxable income but is no longer taxable income for the recipient.
This puts the payee of all spousal support agreements that recently came into effect in an even worse financial position. Keep this in mind when negotiating spousal support. Sometimes a one-time lump settlement may work out better for both parties.