Q:Does infidelity affect spousal support rewards in Oregon?
A:Oregon is a no-fault state; therefor, infidelity does not directly affect spousal support rewards. That being said, judges can use a fair and equitable standard in order to set spousal support, which may be altered if the unfaithful spouse utilized marital funds for the affair, (say to purchase jewelry or take the boyfriend/girlfriend on trips). Thus, infidelity can have an indirect effect on a spousal support reward in Oregon.
Q:When might spousal support be appropriate in an Oregon divorce?
A:There are three types of spousal support: maintenance spousal support, compensatory spousal support, and transitional spousal support.
Maintenance spousal support is the most common and it allows the receiving spouse to enjoy a lifestyle not overly disproportionate to the life they enjoyed during the marriage. Maintenance spousal support is based on equitable principles, which is why it’s difficult to tie down an actual number until the other facts of the case are clear. The support payments may change depending on whether there will there be a child support award, a large property award, etc.
Compensatory spousal support is typically ordered when one spouse needs to pay the other spouse back for some manner of investment. The court may order compensatory support if either spouse received an education or a form of training that allowed them to be a higher wage earner than they would have been.
Transitional spousal support is a form of support aimed at allowing the receiving spouse to continue their education or necessary training in order to re-enter the work force. Generally, if you see a large disparity of income and a longer duration of marriage, you’re far more likely to see some manner of spousal support. That being said, spousal support is always modifiable whenever there has been a significant or unanticipated change in financial circumstances since the time of the last award.
Q:How long might you end up paying or receiving spousal support?
A:Spousal support in Oregon is based on equitable principles, which makes the duration of the spousal support award a little difficult to tie down. Generally, a good rule of thumb to follow when determining spousal support payments is that the payments are likely to last for half the duration of the marriage. So, if a couple was married for 10 years, the receiving spouse may receive support payments for about 5 years. However, determining the actual duration of support depends on each couple’s circumstances and the specific facts of their case.
For example, if you have someone who is 60 years old and several years away from collecting social security, that individual’s spousal support award may last for a shorter period of time due to the fact that social security is going to step in and help in a matter of years. Alternatively, if you have someone in their early 20s, you can’t expect a long-term award due to the fact that people of this age are usually just entering their earning years, thus a shorter duration is more likely.
Overall, the court looks at what’s equitable, what’s fair, what’s available, and what’s practical. The duration of spousal support payments is incredibly fact-dependent and will vary from case-to-case.
Q:When might spousal support be modified or terminated?
A:Spousal support is modifiable depending on what type of support you have (compensatory, transitional or maintenance). Each of these forms or spousal support can be modified under certain circumstances.
Modification of a maintenance award can happen any time there’s been a substantial and unanticipated change in financial circumstances since the time of the original award. The original award will play a large role in determining the modification.
If your judgment does not specify when a spousal support modification would be justified, then anytime there has been a substantial and unanticipated change, you may qualify for a modification. Judgments vary, and some may have clauses outlining what types of changes in circumstances will allow for a modification. For example, some judgments may have a clause stating that retirement does not count as a substantial change, or, alternatively, that it does.
Termination of spousal support works much the same way. What does the original award say about when support should be terminated? When determining modification or termination of spousal support, the court will look at what the judgment says, what we anticipated at that time, and whether there has been an unanticipated or substantial change.
Q:How does the Tax Cuts and Jobs Act impact spousal support?
A:In the past, spousal support, (prior to the 2019 tax year), was considered income to the receiving spouse, and a deductible to the paying spouse. Thus, the paying spouse paid no taxes on that money, while the receiving spouse counted it as income. Starting in 2019, the paying spouse is responsible for paying taxes on those funds, and support payments are tax-free for the receiving spouse.
This new law has caused quite a bit of interest in the family law field. This influx of interest stems from the fact that spousal support rewards, when they were tax deductible for the paying spouse, were about 30% less than they are under the new law. Now that paying spouses are also responsible for paying taxes on spousal support, settling spousal support issues is more difficult than ever. With the advent of the new tax code, it’s important to talk to your family law attorney, and perhaps a CPA, to see how the Tax Cuts and Jobs Act could impact your income and your net budget monthly, depending on your spousal support award.