For a spouse who has been the primary breadwinner during the vast majority of his or her marriage, if divorce enters the picture he or she may have to continue to provide for his or her ex well after the marriage is over. For some individuals in Massachusetts that will simply mean paying alimony. For others, however, the court may have other ideas in mind.
A good example of an alternative form of alimony is a support-paying spouse being ordered to keep his or her ex as a beneficiary on a life-insurance policy. Doing this will ensure that the receiving spouse is guaranteed support even after one’s death. If this happens, does it mean that the premiums paid toward that policy count as alimony? Maybe.
This can be a tough question to answer. In order to count life-insurance premiums as alimony a few things have to happen. First of all, there must be a court order that states one is responsible for maintaining such a policy. Second, the receiving spouse would have to count the premiums as taxable income on his or her taxes. Third, the wording in the divorce decree regarding alimony has to be just right.
Alimony can be a complicated thing to figure out, especially when it involves more than just a payment to one’s ex. Obviously, those in Massachusetts who are required to support their ex-spouses want to make sure that they can get their maximum tax benefit. An experienced divorce law attorney can help one achieve an alimony set up that is financially fair and meets all the necessary qualifications to be tax deductible.
Source: marketwatch.com, “Can I deduct the life-insurance premiums that I pay as alimony?“, Quentin Fottrell, Aug. 24, 2017