Finances are often at the center of a Colorado high asset divorce. While that will often make for a contentious back and forth between the parties, the law can be taken for granted as a secondary issue. Now, with changes to the U.S. tax law set to go into effect at the start of the new year, those who have significant assets could have their circumstances impacted by the new law. With that, it is imperative to grasp how they can be affected and if there is anything that can be done about it. Having legal assistance is critical toward this end.
If people who are getting a divorce do not complete it before the end of the year, they will no longer be able to deduct alimony payments. This can be of significant concern to people who are wealthy as it could result in the loss of massive savings they otherwise received prior to the new law. This is serving as a catalyst for those in this situation to complete their divorce before the year is over.
Wealthy people will have more to disagree about in a divorce. Whether that means homes, cars, jewelry, artwork and a business, this can lead to a long and contentious court case. If there is one spouse who earns most or all the income, the other spouse might fear they will be deprived of what they should get if they are being treated in a way they deem as fair. Even when negotiation is possible, it can take extensive time to complete. In general, the spouse with higher income will pay support – alimony – to the other spouse. This can last for a finite period or it can continue for an open-ended period. Since those paying alimony will no longer be allowed to deduct that on their taxes, it will have a domino effect on how this is handled.
There is the possibility that people who complete the agreement before the end of the year will get the tax benefit even if the divorce is not yet official. When a couple determines that their marriage is over and they are getting divorced, time might or might not have been an overriding factor before the new tax law. Now, with it on the near horizon and coming fast, people are wise to consider expediting the process to derive benefit from the current law until year’s end. A law firm that is experienced with high asset divorce and how various laws impact it should be called for advice on how to proceed.