By Cindy R. Hart Riecke, CLU, ChFC, CFP® – Senior Director, Product Development

Alimony is a topic commonly tested on the CFP(r) exam. There are several requirements for alimony payments to be considered tax-deductible: 1) the payee and payor cannot be members of the same household at the time the payments are made; 2) the payment must be made in cash (although if the payee spouse owns life insurance on the life of the payor, the premium payments made by the payor for that spouse will qualify as cash for this purpose); 3) a legal document cannot designate that the payments are not alimony; 4) payments must be made directly to the payee spouse or to a third party for the direct benefit of the payee spouse (e.g., making a mortgage payment); and 5) the payments cannot extend beyond the death of the recipient spouse.