Recent changes to the tax code may affect the way people get divorced, at least until 2025. Under the old law, a higher-earning Nebraska spouse might use alimony as a way to keep more of the marital assets while ensuring their former spouse has the money they need to survive. However, the changes that go into effect at the beginning of 2019 make alimony a less attractive option. Since the person who pays spousal support will no longer be able to deduct the money they pay when they file their income tax return at the end of the year, they may use creative strategies to divide the marital wealth without impacting either spouse’s retirement savings.
Spouses who might have been ideal candidates for alimony under the old tax code due to their limited income might now benefit from receiving investment assets in their divorce settlement. Because of their low tax bracket, these people may not have to pay any capital gains taxes. Unless they plan to sell the marital home immediately after the divorce, choosing stocks instead might provide them with the income they need to meet their basic needs.
Couples who get divorced after they’re 50 years old may be less prepared to retire than those who end their marriages when they’re younger. With less time to make up for the loss of assets, people who get divorced in later years may find it more challenging to pay the higher living expenses associated with living alone.
Getting divorced after the beginning of 2019 may not be as simple as it was in the past for high-income earners. With spousal support no longer beneficial for both spouses, people who have a lot of assets might need the assistance of an attorney who focuses primarily on high-asset divorces. These attorneys might help clients find creative solutions to their property division dilemmas.
