Who Gets to Keep the Income in a Divorce and What is Maintenance?
The court can order one spouse to share income with the other spouse. Prior to a final hearing this is called income equalization. The parties can either agree to a distribution of the income, assets, and debts or the court can ask the family court commissioner to do an assignment of income and debts. The case law in Wisconsin asks the court to first consider what would it take to give each spouse the same disposable income. The court must look at the income of both parties, consider the debts that each party is paying, consider the tax consequences and come up with a solution that equalizes income in both households. At the time of the final hearing, the court can set maintenance. Maintenance can come in many varieties. Maintenance has serious tax consequences. If one party is ordered to pay maintenance to the other party, typically speaking those payments will be excluded from income and included as income to the person receiving maintenance. There are special provisions in the tax code that can allow family law attorneys to work with their clients to maximize the tax consequences of maintenance payments.