Should I File For Divorce Before The End Of The Year?
Most of the time it really does not make much difference whether one files for divorce before the end of the year. If one wants to wait until the holidays are over until dealing with a potential divorce, typically that will not effect the outcome of the case. Historically, the only reason to file for divorce before the end of the year would be concerns that one's spouse has some potentially serious tax issues (that will be the topic of my next blog). However, in 2018 there is at least one very good reason why it might be imperative to file for divorce before 2019.
Here is the reason, alimony, known as spousal support in Michigan, is still very much alive and well. I am frankly surprised by how many people I talk to that think alimony is somehow no longer with us. That could not be further from the truth. Now, whether you are a man or woman, if you earn more money than your spouse, you very may well have to pay alimony. The longer you are married and the greater the difference in income, the more likely you will have a very serious alimony liability.
The reason this is an issue this year is the recently passed tax bill that includes very serious changes to how the Internal Revenue Service (IRS) treats alimony. In memorable history (I started practicing law in 1996 and it was a well established regulation at that time), spousal support has always been deductible to the payer of support and included in the income of the recipient for tax purposes. For cases that are filed after 2019, alimony or spousal support will no longer be deductible to the payer.
This poses three significant problems for the family law community: (1) it is more advantageous in most cases for family to have the spouse with the higher income deduct the alimony at her or his higher tax bracket and include it in the recipient spouse's income at a lower tax bracket because overall the family will pay less taxes between and have more money for the children or the parties; (2) it will be harder for the attorneys to determine the appropriate terms with the changes in the rules; and (3) frankly, it will be more difficult to negotiate an amicable resolution to divorce cases involving alimony because one of the few selling points to a client that will have to pay alimony is that at least it will be tax deductible.
Divorce and family law are deceptively complicated areas of the law that effect the most important, intimate parts of a person's life and often involve the largest and most uncomfortable financial transactions one will ever face. If you think you might have to deal with the unfortunate possibility of a divorce in your future, please schedule a consultation with me by contacting my legal assistant, Cathy at (248) 608-4123 or through this web site, I can help you.