The Alabama legislature passed two major pieces of legislation in the area of divorce law in 2017. Both laws will become effective on January 1, 2018. The US Congress also passed a bill regarding the treatment of alimony and federal taxes.
HB 257 regarding divorce and alimony
On April 13, 2017 Governor Ivey signed HB 257 into law. This new law substantially changes the alimony laws for the State of Alabama. The legislature’s new law gives trial courts a clear desire to avoid periodic alimony or what I like to call “forever alimony.”
What has changed? The Alabama legislature wrote a law that only rehabilitative alimony shall be awarded to a party and that rehabilitative alimony shall not exceed five years, unless the court expressly finds that rehabilitation is not feasible. This new rule is similar to the child support guidelines which provides a formula for how child support shall be calculated unless the court gives a written reason for a deviation from the guidelines.
Once the court finds a deviation, the court is limited to a period not to exceed the length of the marriage. However, there is an exception. If the parties have been married 20 years or longer, there is no time limit.
The courts can still give “forever alimony” but only for “extraordinary circumstances.” This law gives lawyers and those going through a divorce a better idea of what to expect if they go to trial.
HB 208 regarding divorce and retirement
On April 13, 2018 Governor Kay Ivey also signed HB 208 into law and the bill became ACT # 2017-162. This law eliminates the requirement that the parties must be married for 10 years before the court may award retirement benefits.
Folks that have been married for less than 10 years and have a retirement account might be upset with this bill at first glance. Up until this law was passed, in order to receive a spouse’s retirement the marriage must have lasted 10 years.
This law simply gives a judge more flexibility and more options upon divorce. Lawyers were making settlements frequently involving short term marriages and retirement accounts. This law gives the trial judge the ability to do the same.
Tax Cut and Jobs Act
Under current tax law, alimony and separate maintenance payments are deductible by the payor spouse and includible in income by the recipient spouse. On 12/22/2017 President Trump signed the “Tax Cuts and Jobs Act.” Under the new law, alimony and separate maintenance payments are not deductible by the payor spouse. The new tax law repeals the Code provisions that specify that alimony and separate maintenance payments are included in income.
Sam Bone is a Gadsden divorce lawyer where he practices in the areas of divorce, custody, and criminal defense.