Divorce is one of the most emotionally taxing events a person can experience, a fact that undoubtedly leads to numerous poor decisions when filing the ensuing paperwork. One of the most common areas where errors are made is during the process of alimony negotiation. Alimony is confusing to work out. In every state, the process for determining the amount of alimony — or “maintenance” payments — a breadwinner spouse must make to the other varies. The process requires a lot of consideration of finances, income, assets, and potential earnings of the non-breadwinner party in the marriage. Combined with the emotional high-wire act of the divorce process — and the pain that so often lingers from the dissolution of a marriage — stupid mistakes are bound to happen.
To help you avoid them, we spoke to a variety of experts to see what common mistakes to avoid when negotiating alimony payments — and what to keep in mind in order to not lose your cool.
Opting For Lump Sum or Short-Term, High-Cost Payments
“Every time I represent the breadwinner, the first thing they think is: I want to pay the least, and I want to pay for the shortest amount of time,” says Vikki Ziegler, a divorce attorney who has been working in family law for 20 years. While she understands that people want to wipe their hands of the whole marriage as quickly as possible, Vikki says it’s always a big mistake.
“Sometimes, you have to think about paying for a longer period of time but paying less,” says Ziegler. “People want to buy out their alimony. It’s like a bargain shopper, who gets a ton of stuff because it’s on sale.” There’s also the fact that with long-term, low-cost payments, people can terminate alimony payment if their ex-wife begins to cohabitate or marries someone else. If they pay a lump sum, although they may wipe their hands of it, they will never get that money back.
Not Seeking the Help of Outside Experts
“Dads, and even their attorneys, overlook the need for at least two experts in every case that deals with significant alimony payments,” says Scott Trout of Cordell and Cordell, the world’s largest men’s litigation firm. Those types of experts, per Trout, are a vocational rehabilitationist, and an accountant. “They’re an integral piece of not only minimizing the impact but perhaps even trying to prevent the award of alimony,” he says.
A vocational rehabilitationist will interview the other party in the divorce — the one who hasn’t been working — and tries to, with the knowledge of her skills, education, and work history, determine what their salary could be if they rejoined the workforce. This is important because most states don’t have a calculator for alimony payments.
A CPA or accountant, preferably a family accountant, will look over everything. This is particularly important in the face of the upcoming tax bill changes that will get rid of the deductions for alimony payments. A family accountant can actually look at someone’s bank accounts and determine what a family’s lifestyle actually is — and how much money will be needed to maintain that lifestyle.
Hiding (or Spending) Money to Reduce Payments
“Don’t just go spend all your money, thinking that you’ll pay less in alimony,” says Ziegler, who says this is a regular tactic used by scorned spouses. “It’s determined mostly on your income, not assets. So people think, Oh, let me go spend all my money, and the court is going to think, poor me. It does not work like that.” If someone does this, she says, they’ll be flat broke, paying alimony after they’ve spent all your liquid cash. And don’t even think about trying to hide or divert income from the court. If someone gets caught — and they will get caught, warns Ziegler — “Their credibility will be shot.”
Not Being Specific About Grounds for Termination
In many alimony payment agreements, there is specific language regarding the groundwork for termination of the payments. Whether it’s a change in financial circumstances or a new marriage, many dads make the mistake of being vague about when and how alimony will be cut off.
“You need to ensure the strongest language possible for termination in your negotiation,” says Trout. “If you are going to pay, you want some cohabitation language in there, not just remarriage language. Something that says: ‘In the event that the wife cohabitates with someone, whether it is intimate or not, whether it be a roommate, if she receives financial support in any manner, you can either say it’s grounds for modification by agreement; or grounds for termination.’”
A lot of people overlook this, says Trout, thinking that remarriage is enough. Such specific language will make certain that, if one’s ex does find someone new and things become serious enough to cohabitate, they won’t be paying for their new partner’s rent. It also helps bolster their case for any change in financial circumstance as a reason to renegotiate payments.
Not Taking Care of Yourself
“I think getting help from a therapist, with respect to the emotional aspects of divorce, is crucial,” says Ziegler. “Alimony can make people very angry. It’s not fun to have another payment to somebody when you’re working so hard. I’ve divorced a lot of people, and most people are resistant to getting help. But when you’re calm, you can make informed decisions much more easily than not. I think it’s an important component of the overall divorce process.”