Quatela Chimeri, PLLC

How the new tax law will affect your high asset divorce

Saying "I do" can be the best experience of a person's life. For a high earner, it can also be the scariest. Protecting important assets -- including everything in the bank -- can be a nightmare during a high asset divorce, which makes prenuptial agreements an obvious and effective tool for New York couples. But just how will some of those prenups hold up in the face of the looming change to tax law?

Currently, individuals who pay alimony can deduct those payments on their taxes, reducing their overall taxable income. This is especially useful for people in the top income bracket who typically pay large monthly sums to their exes. However, for those divorcing in 2019 and thereafter, those deductions are disappearing.

It is safe to assume that those with large annual incomes took the current tax deductions into account when creating their alimony plan in their prenups. So what happens if they divorce after the new law goes into effect? Someone who agreed to a payment of $10,000 per month would still owe that amount and also be responsible for approximately $20,000 of pretaxed income.

Taxes are steep for the highest earners in New York, and alimony deductions have long been an essential strategy for managing post-divorce finances. With changes on the horizon, some individuals are choosing to amend their prenuptial agreements to better reflect the new tax law. However, those concerned about their current prenups or couples who are creating their first drafts should consider how an experienced family law attorney may help shape their agreements to best represent the needs of a high asset divorce should one occur at some point in the future.

No Comments

Leave a comment
Comment Information

Get Answers From A Focused Attorney

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Quatela Chimeri PLLC
888 Veterans Memorial Highway Suite 530
Hauppauge, NY 11788

Phone: 631-482-9700
Fax: 631-482-9707
Hauppauge Law Office Map

Mineola Office
215 Willis Avenue
Mineola, NY 11501

Phone: 516-750-8811
Fax: 631-482-9707
Map & Directions

Visa MasterCard American Express Discover