As 2019 rapidly approaches, experts continue to speculate and predict how the new tax laws may affect divorces. Although high asset divorce agreements finalized before 2019 will be grandfathered and allowed to remain under the old standards, the agreements could be affected if any changes arise in the future. In addition, some individuals in Pennsylvania may be surprised to learn that prenuptial and postnuptial agreements could need updating if the laws make some of the agreement terms inadequate.
Divorce agreements may take longer than normal in 2019. Since alimony will no longer be tax deductible, it is expected that higher income earners will argue for lower alimony payments, and it is expected that the other party will hold out for higher payments. In addition, it is anticipated that couples may want the process to take longer as 2018 winds down to ensure that all aspects are considered under the new law.
Couples who are already divorced may also be affected by the new laws. If an existing divorce agreement needs an amendment, it as well may fall under the new tax laws. Amendments to a divorce agreement following a divorce often occur when one party has an income change or has requested a change in payments. In addition, the new tax laws may invalidate some terms in prenuptial or postnuptial agreements, requiring renegotiations.
Whether divorced, processing a high asset divorce or making plans in case of divorce in 2019, it is best to seek the advice of an experienced attorney. Family law attorneys in Pennsylvania are aware of the tax law changes. Attorneys will continue to advise according to a client’s needs, encompassing the changes in the law.