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Did You Know...
Family Law Software can calculate child support guideline amounts in 21 states.
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Question: How Can I Split Alimony Savings Between the Parties?
Answer: The first thing to do is to answer the question, "alimony savings compared to what?"
For this example, we will examine how to split the alimony savings compared to an "all child support" scenario.
1. Using the Alimony What-If screen, you can see the After-Tax Cash of both parties in the "base case," where all the payment is child support and none is alimony.
2. Now click the link on the right that says, "[Show Another Alternative]." Enter the same amount, but all alimony with none as child support.
3. You will see, in most cases, that the payer is better off and the recipient is worse off.
4. Now, increase the alimony amount by the recipient's gap, to "make the recipient whole." You will have to increase the alimony by a bit more than the initial gap, because the recipient will lose some of the increase because the alimony the recipient receives is taxable.
5. You are now at a position where the reicpient is as well of as s/he was under the "all child support" case. But the payer is better off.
6. Now, you can increase alimony still further. With one additional dollar of alimony, the recipient will be better off than with all child support, and the payer will still be better off. You can keep increasing alimony for awhile.
7. As you increase alimony, you will eventually reach a point where both spouses are better of by the same amount, compared with the base case of all child support. Your goal has been reached.
8. We have been considering a one-year time frame. But you can consider a multi-year time frame by totaling the after-tax cash for each party for all years under consideration. Build the total first for the "all child support" base case. Then build the total for each trial alimony case. Using those totals as you go through this procedure. It takes a bit more time to use totals over several years, but it may be more worthwhile to the parties. Note that you may export the screen to Excel, and use Excel to total up the columns for you.