Originally Posted by
CompetentFool
Unfortunately for me looks like I’m 30 years into a marriage that’s gone to pasture. She’s filed and hired an attorney. I’m a 25 year WB captain at FedEx and she hasn’t worked in 25 years (3 grown kids). Semi-amicable and hopefully we can use a mediator. Here’s my question- I’m gonna have to pay her alimony (or whatever Texas calls it) for 10 years. The math according to Texas Statute works out to $5,000 per month for 10 years. I called the Fedex retirement center and they informed me that she’s entitled to half my pension AND she can start collecting her half the day we divorce (we’re both 57). So she gets about $5,500 per month until the day she dies from FedEx. So here’s my question - is spousal support on top of this money? If so, then she’s getting $10,500 per month for the next 10 years. Or, does this pension payment satisfy the spousal support requirements? Does anyone have any experience with this?
First get legal advice from a attorney. If you don’t already have one you are late to the game. I can tell you what I know but ignore it and get a attorney.
30 years married means basically you are going to split all assets in half. Your pension is a asset. It will not satisfy spousal support. She will receive a QDRO from the court. This entitles her to be paid half of the pension up front in cash in many cases for the entire value of her portion. Depends on plan structuring.
The 5500 spousal support you will pay on top of that. Here is why you need a attorney and need to get things moving fast. Sadly her attorney will probably know this and slow things down.
“”In divorce situations, an ex-spouse may be legally obligated to make payments to the other party. Since payments are often substantial, locking in tax deductions for the payer has often been important and involved a substantial amount of money.
Before the Tax Cuts and Jobs Act (TCJA) was enacted, payments that met the tax-law definition of alimony could always be deducted by the payer for federal income tax purposes. The recipient had to report the money as taxable income.
This treatment continues under the new law for alimony payments made under divorce agreements reached before 2019. But for payments made under agreements after 2018, things will change dramatically. Here’s what you need to know.
Alimony Deductions After 2018
For payments required under divorce or separation instruments reached after December 31, 2018, the tax deduction for alimony payments is eliminated. Alimony recipients will no longer include the payments in taxable income. For high-income individuals this can be an expensive change — because the tax savings from deducting alimony payments can be significant.
This new treatment of alimony also will apply to payments under divorce or separation instruments that are modified after December 31, 2018, if the modification specifically states that the new TCJA treatment applies.””
To summarize if you divorce is dated 31 Dec or sooner you get a massive deduction for the alimony. She pays taxes on the money. After 31 Dec 2018 you pay the taxes and she gets the money tax free.