Memo Review Discussion Board

Memo to file

To: File

From : Paul P an th er

Client: Ben

Subject: D ivorce d ecree

Facts

"Ben and Jennifer were divorced two years ago and the decree stated that Ben was to make

monthly payments to Jen. The court designated $500 a month as alimony and $600 per month

as child support. Ben was unemployed for a quarter of the year and paid Jen $ 9,900 during the

time he was employed. He said $5,400 was for child support and $4,500 was alimony. In

addition, Ben transferred home theatre equipment to Jen w ith a FMW of $ 3,300 and a basis of

$6,000 in exchange for her promise not to pursue any claim against him for unpaid child

support and alimony. During his three months of unemployment Ben collected $3,000 of

unemployment benefits. He earned $72,000 in salary for the nine-month period of

employment."

Issue and Conclusion

Can Jennifer accept the home theatre equipment as payment for the unpaid child support and

alimony?

Yes, if she agrees w ith the method of payment then it is possible.

Analysis of conclusion

A former spouse can agree to receive property as a form of alimony payment over a written

agreement o f promise. If Jennifer is comfortable w ith the offer and does not plan to pursue any

claim, she can use the written agreement as proof to the IRS the method of payment.

Issue and conclusion

What if Jennifer were to disagree w ith that offer and decided that Ben made more than enough

money over the year to give her the remaining unpaid child support and alimony. Would it be

possible to pursue any claim against him?

Yes, because his income is above the threshold and being unemployed for 3 months does not

give him the right to not pay.

Analysis of conclusion

Alimony is calculated based on the spouse ability to pay and the need of the depending spouse.

Since Ben made $72,000 in salary for that year, he therefore qualify to pay the unpaid amount.

Issue and conclusion

Can Ben decided what portion of the money is child support and what is alimony?

No

Analysis of conclusion

If payment are required for both alimony and child support by the court decree, then payments

are first applied to child support and the remaining is alimony. The law says that when a minor

child is involve in a divorce, the need of the child come first over all else. Therefore Ben did not

have the authority to decide what portion of the money goes to what.