February 3, 2018

Should Your Spousal Support Increase with the Cost of Living?

questions answers signSpousal support that lasts more than a couple years may be subject to cost of living adjustments (COLAs).  This is negotiated as part of your divorce settlement. As the cost of living goes up, spousal support can increase as well, to meet its intent of maintaining the ex-spouse’s standard of living.

Fortunately, the State of Minnesota’s Office on the Economic Status of Women (OESW) provides a booklet that contains a worksheet and instructions for calculating the cost of living increase for spousal support, as well as child support.  The OESW’s A Guide to Child Support & Spousal Maintenance Cost-of-Living Adjustments also has template forms for notifying the paying ex-spouse of the increase and an Affidavit of Service by Mail form. Why an Affidavit of Service by Mail form?  Because if the paying ex-spouse does not increase the support as requested, the affidavit is proof that they had been notified.

All these forms and worksheets should also be filed with the court administrator where the decree was filed.  This is a lot of paperwork, but OESW’s guide also has a checklist to make sure all of the involved parties get the correct documents.

One additional piece of information needed to complete the COLA calculations is the Consumer Price Index Table.  This table is also maintained and available for download at the OESW website.  The index numbers on this table are used to show the increase in the cost of goods and services over time. These index numbers are used in the calculations to determine how much spousal support (and child support) should increase to keep up.  The table shows over 20 years of data but, if one is being diligent about requesting increases, only the index numbers from the past couple of years should be needed.

The Consumer Price Index Table contains sets of price index numbers: the CPI-U shows how much prices have increased on average for the entire United States; the CPI-U MSP shows how much prices have increased in the Twin Cities Metropolitan area.  Your divorce decree will likely indicate which set of index numbers you should use.  Note that while using the CPI-U MSP can most accurately reflect the increase in prices in Minnesota, this set is updated twice a year, in January and July, and it takes an additional month for the updated figure to be published.

OESW’s A Guide to Child Support & Spousal Maintenance Cost-of-Living Adjustments is easy to follow and doesn’t require too many calculations.  If you are not good at math or filling out forms, it is a good idea to get help from a financial professional or your family law attorney.

Link to the Guide

Link to the Consumer Price Index Table

Amy WolffABOUT THE AUTHOR
Amy Wolff
AJW Financial, Inc.

Amy Wolff’s clients describe her as a financial educator and coach. She listens to their diverse concerns and guides them through life’s most stressful transitions toward confident financial literacy and independence. By remaining accessible and open to any question, Amy helps clients avoid pitfalls and make decisions today that align well with their plans long-term. Her approach to personalized financial guidance has given countless clients a non-judgmental place to make well-reasoned financial decisions for their futures and their loved ones.

Amy is a CERTIFIED FINANCIAL PLANNER™ professional (CFP®) and a Certified Divorce Financial Analyst™ (CDFA®). Feel free to learn more at www.ajwfinancial.com

Amy Jensen Wolff, CFP®, CDFA®
3300 Edinborough Way, Suite 550
Edina, MN 55435
Phone: 952-405-2000
www.ajwfinancial.com

Registered Representative offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC. Investment Advisory Services also offered through AdvisorNet Wealth Management. Cetera is under separate ownership from any other named entity.

Tagged with:

January 13, 2018

Three Stories of Empathy

Empathy is the word for the capacity to understand another person’s perspective or experience without necessarily agreeing with it.  Empathy allows humans to be in synch and resonate with each other in spite of differences.  There is plentiful scientific and Continue reading…

Tagged with:

January 6, 2018

The House Decision

Divorce has a way of completely upsetting one’s expectations for the future.  One day things are moving along just fine, and the next you are making decisions that will impact the rest of your life.  One of the big decisions Continue reading…

Tagged with:

November 26, 2017

Parenting in Divorce

  Children deserve the best, safe parenting they can get from both their parents.  This is a fundamental guiding principle for my work as a neutral child specialist.  It sounds intuitiveand obvious.  But in the context of separation and divorce, Continue reading…

Tagged with:

July 31, 2017

Holiday Traditions and Parenting Time

With the holidays upon us, most of us are getting ready for gatherings with family and friends and figuring out who is hosting which holiday.  Many families have traditions that may go back generations.  As parents, we may choose to Continue reading…

Tagged with:

July 24, 2017

Guiding Your Children Through the Holidays, Post-Divorce

Navigating the holidays post-divorce is a difficult enough task for adults, but it also brings out stress and anxiety in children, whether small or big (adult). We tackled holiday survival post-divorce topics like “finding your new normal” and “creating emotional Continue reading…

July 17, 2017

Teamwork in the Midst of Substance Abuse

About 3 and a-half years ago, a family in the Collaborative Divorce  process was working with the Neutral Child Specialist .   It was stated by my client that dad’s alcohol use was the primary basis for her seeking the divorce. She Continue reading…

Tagged with:

July 10, 2017

How to Avoid the Divortex – Part 3

In parts 1 and 2, we defined vortex as: 1) a whirling mass of water or air that sucks everything near it towards its center; 2) a place or situation regarded as drawing into its center all that it surrounds, Continue reading…

Tagged with:

July 3, 2017

The Delicate Art of Compromise

The Delicate Art of Compromise Compromise. It is the cornerstone of legal settlements. It is the foundation of civility. Yet it is not without its attendant difficulties. The most common meaning ascribed to compromise is an agreement or settlement of Continue reading…

Tagged with:

June 26, 2017

Friending Yourself

Throughout your life, and particularly through your separation or divorce, there may have been times when, even if you have an amazing support system, you realized that there is truly only one person that you can count on 24 hours Continue reading…