The full retirement age is increasing. That is not us talking; that is the Social Security Administration (SSA). Beginning with folks born in 1938 and continuing on through the baby boomers born in the psychedelic 1960s, full retirement age inches upward to 67. This matters because, whether you are paying or receiving spousal support payments, new laws could affect those payments when you retire.
Some Divorcing Couples In For a Shock
For some divorcing couples, the July surprise in Virginia’s new laws could be a nasty shock. Those penny pinchers trying to handle divorce and property settlement on their own — or through a so-called “fast” internet-based law firm — may write themselves into a costly corner.
Non-modifiable or Modifiable?
Spousal support can be non-modifiable or modifiable. That is, an agreement for spousal support can either be irrevocably binding on both parties, or it can be revisited in future years depending on evolving circumstances, what Virginia law calls “material changes.”
Under a new Virginia law effective July 1, 2018, Code of Virginia § 20-109, “Changing maintenance and support for a spouse; effect of stipulations as to maintenance and support for a spouse; cessation upon cohabitation, remarriage or death.” The law about changing spousal support changes to require specific wording that an agreement is non-modifiable.
Retirement’s Effects on Spousal Support
Before the amended law, your retirement did little to affect your spousal support, either as the payor or the payee. Under this amended law, retirement directly affects support; it is considered a material change in circumstance, and could be grounds (by either party) to seek a modification in spousal support.
Attorneys and tax accountants may soak up the wording of every passed law with a peculiar relish, leaving most people to largely ignore the fine points and get on with their lives. In this case, however, if you are dealing with both retirement and spousal support, you should spend some worthwhile minutes comparing the existing wording with the new July 1, 2018 law.
If you are not so moved, we can break it down for you succinctly:
- Old law § 20-109 — bits and pieces of which date back to 1919 —had subsections from A through D, at which point it sat down to rest
- New law § 20-109 retains subsections A through D and then tacks on subsections E, F and G like some kind of major remodeling project, only for law and not kitchens
Spousal Support Modifications
When an attorney (for either side) files a motion for modification of spousal support based on retirement, the court must now consider six completely new factors related to retirement. Subsection §20-109.1(F) requires the judge to consider:
- Whether the retirement was contemplated by the court and specifically considered by the court when the spousal support was awarded
- Whether the retirement is mandatory or voluntary, and the terms and conditions related to such retirement
- Whether the retirement would result in a change in the income of the payor or the payee spouse
- The age and health of the parties
- The duration and amount of support already paid
- The assets or property interest of each of the parties during the period from the date of the support order and up to the date of the hearing on modification or termination
Though as yet untested, language in the newly amended laws seems to apply retroactively to spousal support suits filed before July 1, 2018. No judge has yet been forced to interpret the legislative language; give it a try yourself (our emphasis added):
The provisions of this subsection and subsection E shall apply to suits for modification or termination of spousal support orders regardless of the date of the suit for initial setting of support or the date of entry of any such order or decree.
Spelling it Out
One passage in the new law makes clear that retirement is that material change we talked about, and it could lead to dramatic changes in the amount of money an ex-spouse — most often but not always the ex-wife —receives and the amount many Virginia men have to pay.
The pertinent zinger is in subsection F:
“In an action for the increase, decrease, or termination of spousal support based on the retirement of the payor spouse pursuant to subsection E, where the court finds that there has been a material change in circumstances, the court shall determine whether any modification or termination of such spousal support should be granted.”
To exclude retirement from calculations of spousal support, your attorney must now spell out that the “stipulations” described in the property settlement agreement are non-modifiable. Here again is subsection F, later on:
“The provisions of this subsection (i) shall be subject to the provisions regarding stipulations or contracts as set forth in subsection C, and (ii) shall not apply to a contract or stipulation that is non-modifiable.”
A good family law attorney will know how to protect your rights under this newly amended law, but if you need suggested wording, your attorney could insert a statement like this:
“The amount or duration of support contained in this (agreement) is not modifiable except as specifically set forth in (agreement).”
Making a Clear Statement
Another aspect of the amended laws can affect future divorces. § 20-107.1, fetchingly titled “Court may decree as to maintenance and support of spouses,” inserts a new proviso:
“Any order 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 text removes any possible argument from litigants (you or your ex-wife) about whether or not retirement was contemplated when the agreement was reached.
One More Wrinkle: Taxes and Spousal Support
New wrinkles in divorce law would not be complete without some news about taxes. Alimony is no longer deductible to the payor (again, usually the guy; lucky you!) and tax-free to the payee (usually the ex-wife; lucky her).
If you and your ex-wife reach a settlement before December 31, 2018, any future modification still follows the previous law. If you are actively proceeding with a divorce in 2018, insist that your attorney include language to specify that any payments included in your separation and nuptial agreements executed in the next six months conform with alimony as defined under Internal Revenue Code Section 26 U.S.C 71, 26 U.S.C. §§ 215(a) and (b).
Call the Spousal Support Lawyers for Men
To get up-to-the-minute guidance on the changing legal landscape, please consider calling The Firm For Men at 757-383-9184, or contacting us online. We are experienced Virginia family law attorneys, and we strategically work to preserve men’s rights in divorce, child support, and yes, spousal support, even as the laws evolve.