New Mexico Alimony
New Mexico’s Spousal Support/Alimony
Prior to negotiating for “Alimony” or “Spousal Support”, the parties in divorce proceedings must consider whether the alimony award will be modifiable or non-modifiable.
Many alimony awards are subject to modification, meaning that either party can file a motion to modify the original court order. For some parties, modifiable alimony is desired so they have the option of increasing, decreasing, or terminating the amount of the award if their circumstances change. Remarriage of the recipient spouse, significant increased earnings of either spouse, retirement age are all reasons to consider a request for modification or termination of modifiable alimony.
Non-modifiable alimony is awarded only upon the agreement of both parties. The terms of contractual and non-modifiable alimony define a fixed amount for a specific duration that will remain constant regardless of any changes in income, marital status or employment of either party. The risk inherent in agreeing to Non-Modifiable Alimony is that, assuming the agreement is contractually sound, the New Mexico courts will uphold and enforce the terms regardless of a change in circumstances. The advantage is certainty. The parties both know precisely what the total amount is and know that it will not be extended and will not be increased or decreased.
Tax Consequences of Alimony
The most common handling of the tax effect of alimony is for the recipient spouse to pay taxes and the paying spouse to deduct the payments. Careful analysis and compliance with the IRS rules and regulations are essential when negotiating alimony and when drafting the alimony provisions in the settlement documents, to ensure that both parties have a full understanding of the tax ramifications and so that the documents have been drafted in full compliance with the IRS rules and regulations.
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