Before a divorce can be finalized, separating spouses need to split assets, allocate debts, determine child custody, and, if applicable, establish spousal support payments. If couples can’t make these decisions on their own, they can ask the court to intervene and make determinations on their behalf. In Virginia, spousal support is depending on many factors, including the duration of the marriage and the present and future earning capacity of both parties.
Virginia law currently offers the following spousal support orders:
- Temporary spousal support
- Rehabilitative spousal support
- Permanent spousal support
However, three new bills are significantly changing how alimony can be taxed and modified.
Senate Bill 614
Senate Bill 614 amended Virginia Code § 20-109(C) to state that unless a marital settlement agreement states otherwise, the court can modify spousal support based on a material change in circumstances. Per the bill, “No request for modification of spousal support based on a material change in circumstances or the terms of stipulation or contract shall be denied solely on the basis of the terms of any stipulation or contract that is executed on or after July 1, 2018, unless such stipulation or contract contains the following language: ‘The amount or duration of spousal support contained in this [AGREEMENT] is not modifiable except as specifically set forth in this [AGREEMENT].’”
Senate Bill 540
Per this bill, retirement at the age of 67 (maximum social security age) can be considered a material change that warrants a spousal support modification. Senate Bill 549 thoroughly amends Virginia Code § 20-107.1(F) by requiring, “any order of support granting or reserving any request for spousal support shall state whether the retirement of either party was contemplated by the court and specifically considered by the court in making its award, and if so, the order shall state the facts the court contemplated and specifically considered as to the retirement of the party.”
This bill also requires that any party requesting a spousal support modification under Senate Bill 540 also allow the court to review their financial asset and properties. Because spousal support was established by reviewing this information in the past, it’s only fair that the financial situation of both spouses be reviewed before agreeing to a modification.
Tax Cuts and Jobs Act (TCJA)
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act into law. The TCJA’s sweeping tax changes have completely transformed numerous guidelines and standards relating to divorce and family law. For example, after December 31, 2018, all spousal support payments will be nondeductible to the payor, and tax-free to the recipient. It also suspends personal exemptions while increasing standard deductions.
Seek Legal Guidance
Contact The Law Offices of Daniel J. Miller if you have any concerns about these bills or are interested in a spousal support modification. Virginia has very complex tax laws and the court is very particular when it comes to modifying spousal support. Schedule a free consultation today to explore your legal options with an experienced lawyer.