LaRocca Hornik Rosen Greenberg & Crupi, LLC

Call for a Consultation

732-246-2112 Attorney Advertising

NY Office

Setting up a trust in New Jersey to make alimony payments

Once the emotion is removed from a divorce situation, it basically amounts to negotiating a business deal. Part of those negotiations for some New Jersey couples who are divorcing involves alimony. But even in the best of circumstances, negotiating a divorce settlement is rarely easy, especially with relatively new tax laws in place, which has meant changes in the ways payors and payees of alimony look at things.

Essentially, the spouse who now pays alimony can no longer claim the payment as a tax deduction, while the spouse on the receiving end doesn't have to claim the funds as income. These payments are now more costly for the payor because of the elimination of the tax break, so many such payors have set up trusts to pay their former spouses alimony. Grantor trusts actually mean the payee pays taxes on funds paid out, so it takes some negotiating finesse to get a payee to agree to this situation. 

There is a negotiating tool with respect to these trusts. The trade-off is that a payee could continue to collect funds from the trust once his or her former spouse dies, whereas conventional alimony payments end at death. Another way to save on taxes is by selling the family home. This can be especially prudent in New Jersey which is a high property tax state.

An experienced New Jersey lawyer may be able to counsel a client on how he or she can minimize the tax implications of paying alimony. A client who has questions regarding these payments -- whether on the paying or receiving end -- may find matters less confusing after speaking with an attorney. Having answers to perplexing questions may make it easier to come to an agreement with a former spouse.   

No Comments

Leave a comment
Comment Information

Contact Our Firm

To schedule a consultation, call LaRocca Hornik Rosen Greenberg & Crupi, LLC at 732-246-2112 or contact us online.

From our offices in Freehold and New York, we serve clients in

  • Monmouth County
  • Ocean County
  • Middlesex County
  • Central New Jersey
EMAIL US FOR A RESPONSE

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

  • newjersey
  • avvo-rating
  • peer-rated-for-highest-level-of-professional-excellence
  • new-jersey-supreme-court

Freehold Office
83 South Street, Suite 302
Freehold, NJ 07728

Phone: 732-246-2112
Fax: 732-409-0350
Freehold Law Office Map

New York Office
40 Wall Street
32nd Floor
New York, NY 10005

Phone: 732-246-2112
Fax: 212-530-4815
Map & Directions

review us

At LaRocca Hornik Rosen Greenberg & Crupi, LLC we value your feedback. Please leave us a review.