House Republicans pushing a tax overhaul have managed to do something that's extremely difficult to pull off.
They've found a way to make the searing pain of divorce even more difficult for families.
The reason is a provision — little known except to family law attorneys who are now gnawing their nails to nubs — that cuts the deduction for spousal maintenance. If this proposal passes, those making payments (which some call alimony) face an even bigger financial hit.
The receivers of that money, primarily women, will likely have to make more with less.
And children, once again, will suffer the most.
"It won't quite be disastrous for the divorce process, but it will make quick resolutions more difficult," said Lisa Byrne, a Twin Cities-based certified divorce financial analyst who reviews spousal support proposals, among other hot-button issues.
"Family law attorneys I have discussed this with certainly believe it will make mediation and negotiations much more difficult, pushing people into costly litigation. It's certainly going to be detrimental to women who, statistically, still are the primary receivers of spousal support."
"It's terrifying," added Michael Boulette, a Minneapolis family law attorney with Messerli & Kramer, "and could really upend things for hundreds of thousands of people."
Currently, people paying spousal maintenance receive a deduction at tax time. That would go away under the House bill. The recipient of that support must report the money as income, and it is taxed as part of income received. That, too, would go away.
Not having to report such support as income might sound like a win for receivers. But those in the trenches don't see it that way.
They see payees arguing that they can't squeeze out any more green each month and still save for emergencies and child support payments (which are not deductible for the payer).
They see more fights in front of the kids, more litigation and less alimony agreed upon if this popular carrot is taken away.
"The nastiest battles are over money," said Byrne, who offers divorce workshops at three Twin Cities area locations (secondsaturdaytwincities.com), primarily for women.
"We say, particularly if they have children, if you can do this without burning bridges, you're better parents and better role models."
"The benefit of the alimony deduction now is that it's a really useful tool when you have a big income discrepancy. He has more money and she has more money, at a time when people are uniquely economically vulnerable. Everybody's a winner."
He guesses the origins of the change come from House Republicans seeing it as a seemingly easy way to pump more money into the federal government with nobody noticing. Divorce attorneys, he said, "are not that powerful in Washington."
Plus, the myth remains that all we're talking about here are wealthy moguls paying alimony to wealthy ex-wives, and it's hard to get worked up over them.
But the reality, Boulette said, is that his clients include couples where even $750 a month in spousal support makes an important difference.
Spousal support was never meant to reward or punish, Byrne noted. It was designed to more closely equalize families post-divorce, particularly when a woman remained on the home front to raise children, or worked part-time to better support her husband's aspirations.
Baby boomer women, she noted, are the primary receivers of spousal support. Particularly troubling, she said, is that one of the biggest drivers pushing women over age 50 into poverty is divorce.
"Now you throw another monkey wrench in," Byrne said. "It's primarily women who will be punished by this."
Boulette is alerting his current clients about the potential change, and telling them that they cannot count on the current system to continue.
While the proposal would not affect people who are already divorced, Boulette worries about what will happen if a payee, for example, loses his job and needs to go back to court for an adjustment after Dec. 31, 2017.
Byrne is getting the word out, too, encouraging clients to call their representatives in Congress.
"If you're in the midst of a divorce, there's only so much you can do," she said. "If you're close, absolutely get it done.
"We're not proponents of divorce," she said. "We're trying to provide people with education so they can make the best decision. The more prepared you are, the smoother it will be."
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