Going through a high-asset divorce is procedurally the same as any other divorce. However, because the marital estate is larger, there are additional issues that arise that may not arise in a divorce with a smaller estate. One such issue is Virginia spousal support, which we have posted about recently.
As an overview, alimony or spousal support is only awarded by the family law judge when it is necessary, and only where the receiving spouse is not the reason for the dissolution. For example, the receiving spouse cheated, which is the reason for the divorce. In addition, the judge looks at the factors found in Virginia Code, Section 20-107.1 to determine if alimony is appropriate and if so, how long it should last.
While alimony does not have to be of a specified duration, an alimony order is not necessarily set in stone. Both the receiving and paying ex-spouse can petition the issuing court to modify the maintenance and support order.
This modification can be to have the alimony award increased, decreased or terminated based on a significant change in circumstances. For example, if the paying ex-spouse loses their job, before falling behind on alimony payments, they should petition the court to reduce or pause their alimony obligation based on their significant change in circumstances.
Manipulating financial circumstances
One may think the ability to modify alimony incentivizes the paying party to manipulate their income, like willingly becoming unemployed or allowing themselves to be underemployed. However, Virginia law plans for this as judges can find that the spouse is voluntarily unemployed or underemployed and deny their modification order. Judges can also find this during the original alimony calculation and base the alimony order off of the spouse’s potential income, rather than their actual income.
Another key consideration in alimony cases is taxes. Prior to the 2017 Tax Cuts and Job Act, alimony was tax deductible. However, as of 2019, that is no longer the case if the settlement agreement or final divorce order was executed after 2018. However, even if it was entered before 2018, if the agreement or order was modified after 2018, the alimony payments likely no longer apply. As our Alexandria, Virginia, readers can likely tell, divorce and alimony can get complicated quickly, which is why a divorce attorney is always recommended.