As if divorce was not hard enough, now Florida couples have to contend with new alimony laws that may turn the proceedings upside down. Alimony was once a useful tool for negotiating property division and for providing a lesser-earning spouse with some stability in the early years after the divorce. However, the new law removes the incentive for negotiation and may create a rush to court for many couples who have been postponing their divorces.
Previously, the spouse paying alimony could deduct those payments from his or her taxes. The person receiving alimony was required to pay taxes on it. The benefit of this arrangement was that it frequently gave the payer incentive to agree to alimony. This often kept couples out of court because a high-earning spouse was willing to consent to paying alimony to gain the tax break.
Many fear the changes in the law will drive couples to litigation and create more hostile situations between divorcing spouses. It may almost certainly create unforeseen financial burdens on the households of both the payer and the receiver. Another possible consequence is that some couples will simply decide not to divorce but to remain in their unhappy marriages.
The alimony provisions in the new law take effect in 2019, and some couples are already hurrying to finalize their divorces before then. Whether divorcing now or in the future, the assistance of an attorney is crucial for negotiating a fair property division that coincides with alimony arrangements. A Florida attorney can also answer any questions about the upcoming changes in the law.
Source: CNBC, “Alimony tax changes may scorch divorcing couples“, Annie Nova, Feb. 16, 2018