With changes to the 2019 tax code, now might be a good time for those who’ve been considering filing for divorce to call a family law attorney. As cynical as it may sound to consider the timing of a divorce, there’s really nothing wrong with a person seeking to understand the financial affects that a separation might have. When a couple is married, there are constant questions about finance as they make decisions together. After a divorce, the need to consider one’s financial well-being doesn’t disappear.
This article was written so that those who are seeking a divorce, or considering taking this step, might begin to consider changes to the tax code. It’s important to remember that family law is complex. If you or your spouse might be dealing with alimony payments, the division of a business, or other investments, it’s highly recommended that you discuss your situation with an attorney. If after reading this article, you have questions, contact our office to learn how we can help.
Impacts to Alimony and Prenups
A recent article published in the New York Times examined the tax changes going into effect January 2019. The article entitled “Should You Get a Divorce Now or Later”, noted that the new laws will particularly impact spouses required to pay alimony.
Under current tax law, spouses paying alimony are allowed to deduct these payments. Spouses receiving alimony, meanwhile, are taxed on the amount they receive. However, this won’t be the case come January 2019 when spouses paying alimony will no longer be able to deduct the amount. The spouse receiving alimony will pay no tax on what they receive.
These changes could potentially affect prenuptial agreements.
“For couples who drew up prenuptial agreements, the outcome should they divorce is more uncertain,” the Timesnoted. “It is common in prenuptial documents for lawyers to insert language calculating alimony payments based on years of marriage and a clause saying alimony payments are deductible for one spouse.”
But as one legal expert interviewed by the Times noted, in the absence of IRS guidelines, it remains questionable whether such clauses would remain valid once the laws on alimony deductions change.
Taking these things into consideration, a couple might want to think about whether now is the right time to push for a divorce, or whether it would perhaps be better to wait.
Is Now the Time to Seek A Modified Alimony Agreement?
Those ordered to pay alimony often ask whether they will have to provide support to their former spouse indefinitely. The answer to this question depends on a number of factors including the former spouse’s financial situation, whether or not the spouse remarries, even the economy and job outlook. That said, there are situations in which a spouse who is paying alimony can request a modification to the agreement. To find out more about more about alimony modification, contact our office to discuss your situation.
Have Questions? Contact a Family Attorney
Family law is complicated. This is due in no small part to the overlap of personal finances, asset management and tax law. Some divorces are relatively simple, particularly if the separation doesn’t involve many assets or doesn’t deal with questions of alimony. However, couples who have spent many years together accruing assets and propertywill likely experience more complications. A good lawyer will be able to look out for your best interests while you go through this difficult time. If you have further questions about tax law, it’s also recommended you speak with a certified tax expert.
If you are considering filing for divorce, or have questions about family law, contact the office of Jason Smith to schedule a consultation.