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Assessing how changes to tax law will affect upcoming divorces

On Behalf of | Dec 28, 2018 | Divorce, Firm News |

When couples in California decide to pursue divorce as an option for resolving marital conflict assuredly, they are faced with a difficult road to recovering, maintaining and planning their financial future. In serious cases where couples are unable to reach any amicable negotiations, each person may be at a critical disadvantage in being able to maintain their financial stability. 

Thanks to a recent change in long-standing tax law, people who are required to pay alimony are no longer able to include their payments to their ex as a tax deductible. Instead, this money comes from their pocket and its payment does not yield any benefit. While the law was passed some time ago, up until January 2019, it has not been effective. If a person is required to make both child support and alimony payments to their ex, rather than splitting them equally like a majority of people have previously done, many people will probably favor child support payments as alimony has no real advantage to them. 

For marriages where there is a lot of debt, experts warn couples of the chance that their ex could work quickly to pay down debt before asset separation is decided to avoid having to use his or her income to get rid of debt in their name. In cases where retirement assets are going to be split in some ratio, people will not be allowed to collect their portion until a judge formally permits them to. 

If people are pursuing a divorce from their spouse, they may benefit from the guidance of a qualified legal professional. An attorney may be able to help people make wiser decisions about their next steps in getting divorced so they can minimize the damage it may take on their financial future. 

Source: Fox News Network, “Tax guide to divorce in 2019,” Brittany De Lea, Dec. 28, 2018