Will New Tax Laws Affect My High-Asset Divorce?
If you are facing a high-asset divorce, then you are well aware of the financial stakes. Your future financial livelihood is at stake as you move through the divorce process, so you must be well-informed about all the different parameters that could affect the final outcome.
While financial matters are important to all couples going through a divorce, they become particularly critical for couples with high net worth. One especially important factor to keep in mind in your high-asset divorce is how tax laws will affect your divorce agreement. New tax laws make some significant changes, so you should be aware of how these new laws may affect the financial outcome of your divorce.
When Alimony Is an Issue
Alimony is often a crucial component of a high-asset divorce, and it is important to both the spouse providing alimony as well as the spouse receiving it. If you know that you will have to provide alimony payments after your divorce, the new tax laws will be of particular interest to you. In divorce settlements beginning January 1, 2019, spouses who pay alimony will be responsible for the taxes on the alimony payments. Up until now, the spouse paying alimony could take a deduction on the payment, while the spouse receiving alimony was responsible for paying the taxes on it. Since a high-asset divorce may involve a high alimony payment, this topic may be of particular relevance in your situation.
How to Deal with New Complexities
Many financial experts are advising their clients about how to proceed with regards to changes in the tax code that will go into effect next year. The average layperson does not have the skills to fully understand all the ins and outs of the complicated new tax laws. Especially when it comes to a high-asset divorce, it is important to consult with a legal professional regarding the implications of new tax laws as well as state laws and how these will impact your settlement.