- 13 - payment would survive her death. We reject both of these arguments and the circular reasoning on which they rely. Unallocated family support is a technique sometimes used in domestic relations cases to encourage sensible cash-flow planning between separated spouses.7 If used correctly, the technique enables the parties to achieve a higher net transfer of funds to the payee spouse because the payor spouse, who is generally in a higher tax bracket, reaps an economic benefit from the larger tax deduction obtained when unallocated family support payments are structured to be deductible as alimony. See generally H. Rept. 98-432 (Part 2), at 1495 (1984). These unallocated payments, while typically temporary, can facilitate the economic transition that must occur as a result of a divorce or separation, provided the parties understand and agree to the tax consequences. In this case, the Temporary Orders are silent regarding the tax consequences of the unallocated family support payments. Although petitioners could have agreed to the tax consequences of the payments, they failed to do so. See sec. 71(b)(1)(B) and (c). Colorado's UDMA does not state expressly whether combined spousal and child support payments must terminate on the death of the payee spouse. We must examine, therefore, whether the provisions of the UDMA applicable to temporary orders permit us 7This practice is sometimes referred to as "Lesterizing". See Commissioner v. Lester, 366 U.S. 299 (1961).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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