The decision to divorce is almost always a difficult one, and the resulting process can be a very complicated one in the state of Washington. Finances and achieving a fair settlement are certainly major considerations as are the continued well-being of all the parties concerned. Divorce can have a significant impact on the lives of children and preserving their relationship with their parents is paramount.
Arriving at a fair financial settlement can go a long way to mending hard feelings, and this in turn can contribute to continued successful relationships with one’s children. A significant change brought about by the Tax Cuts and Jobs Act of 2017. The law, which became fully effective on January 1 of this year, removed the alimony deduction for the person paying it. This means that the person paying spousal support is paying more in taxes and therefore has less income available to pay in support.
There are options that can still allow for tax benefits. For couples with significant retirement account balances, those accounts can be split through the use of a qualified domestic relations order (QDRO), which allows for the asset to be transferred without paying a penalty or tax on it. The recipient will have to pay tax when the funds are withdrawn, but he or she has control of the asset in the meantime. One limit to alimony is that it can stop in the event of the payor’s death.
Financial disagreements can lead to family discord whether divorce is involved or not. If one can eliminate or reduce financial contention in the divorce process in Washington overall family harmony can be improved. That typically helps to preserve family relationships. Professionals experienced in family law and familiar with the new tax laws may be able to help one arrive at a reasonable financial settlement.
The Law Offices of Stacy D. Heard, PLLC
