Recently Acquired Income Deficiency Syndrome (RAIDS)


When affluent partners divorce, there’s the possibility that one party will have to pay alimony or spousal support to the other.  This often occurs when one party makes most if not all of the family’s income while the other either doesn’t work at all or earns a very small percentage of the family’s total income.  When the more affluent spouse is told to pay a percentage of his or her income to the ex-spouse, this demand is very often met with adversity.  It’s natural that any person wouldn’t want to be financially responsible for another who is no longer involved in their lives.  Some in this situation are so against the idea of having to pay this kind of money that they purposefully find a way to make substantially less income in an attempt to alter the payments.

This phenomenon has been termed Recently Acquired Income Deficiency Syndrome or RAIDS.  The more affluent party claims that they no longer make enough money to pay such high amounts of alimony and or child support, bringing about the need for a renegotiation of payment amount.  A divorce case was brought up in the New York Law Journal where a husband paying alimony suddenly was making substantially less money from when he was still with his wife.  A ruling was made based on what is called the “present income” rule, whereby a spouse pays less in alimony based on a drop in income.  It was also noted in the article that if a court believes a person to have voluntarily created a situation where they made less money in an alleged effort to pay less alimony that a court would not simply allow that person to pay less support.  If in the situation where you’re the person being paid support and you believe your ex has voluntarily placed him or herself in a situation in an attempt to pay you less, be sure to gather as much evidence as you can to support this claim.

Receiving A Lump Sum Could Be Better Than Receiving Alimony Payments

Hands giving money

If you’re in the process of ending a marriage with an affluent partner, it’s best to opt for a lump sum versus alimony payments.  This is because alimony is based on the income and current assets of your spouse.  Therefore, there is the possibility that your spouse could lose income or have other things occur following a divorce to make your alimony payments less than what they start out to be.  It’s recommended to individuals leaving a high-income spouse to opt for the lump sum so that games cannot be played with the money you’re awarded following the divorce.  Once you have the money, it’s yours.

However, if you have a history of being negligent with money or if you have poor financial planning skills, it may not be wise for you to receive the lump sum without first receiving guidance from a financial planner or accountant.  If you get the lump sum, this usually means you won’t receive anything more from your ex-spouse in the future, so what you get in the lump sum needs to be invested and used wisely.  This will be especially crucial if you don’t have a career or income of your own at the time of your divorce.  It’s very difficult to gain employment after an extended period of being unemployed, no matter what the reasoning behind the unemployment was.

Be sure to make secure financial plans with your legal team and/or accountant prior to finalizing your divorce so that you can receive the best financial outcome possible.