Planning Beginner: Financial Considerations in Divorce

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An advantage of alimony is that in most states the monthly amount is set for life and not subject to change.

True

False

False. In most states, alimony laws typically allow those paying alimony to modify the terms later if circumstances change.

Which of the following is true regarding alimony negotiations?

It is often wise to seek the services of a financial planner in making financial projections and calculations.

Alimony recipients should keep in mind that they will likely become ineligible to collect state unemployment benefits.

Alimony is determined primarily by reference to factors provided by state law, so the parties have little flexibility in their negotiations.

It is often wise to seek the services of a financial planner in making financial projections and calculations. Very often, attorneys lack the necessary financial expertise.

Which of the following is true regarding alimony negotiations?

Online and printed self-help materials are excellent resources for those who wish to handle it themselves.

Judges generally set alimony after referring to state guidelines and allow little or no departure through the parties' negotiations

Alimony is tax-free to the recipient

None of the above are true

None of the above are true. The opposite of each statement is true.

Child support ________.

Is not taxable to the person who receives it and not tax deductible to the person who pays it

Is paid to the custodial parent, who has full discretion under the law as to how it is spent

Cannot lawfully be spent in any manner that benefits the custodial parent

All the above

Is not taxable to the person who receives it and not tax deductible to the person who pays it. The other two choices are not accurate.

Regarding individual retirement accounts and divorce, which of the following is true of the beneficiary designation forms?

They determine where an IRA goes upon the owner's death

They are automatically revised by the court order granting a divorce

Both the above

None of the above

They determine where an IRA goes upon the owner's death. The court does not control assets that have designated beneficiaries.