When Congress passed the latest tax reforms in 2017, there were many changes that impacted people across the tax brackets. Though many of the changes may have been beneficial for some taxpayers, others discovered that they were facing significant increases in their tax bills. Some Texas residents may be considering the merits of a high net worth divorce in order to realize some tax relief.
There are many valid reasons to seek a divorce, though, for most couples, the relationship has broken down to the point that it’s beyond repair. However, there are situations where a couple may choose to end a marriage, at least on paper. The Tax Cut and Jobs Act subjected couples in the higher income tax brackets to what is referred to as the marriage penalty. In addition to this so-called marriage penalty, a few of the presidential candidates have proposed raising taxes on the higher income brackets if elected.
Along with those who are wealthier, some of the less wealthy couples may find themselves contemplating a divorce to realize savings in other areas. One situation that may prompt spouses to divorce is if one faces a serious medical problem or declining health. It may be prudent for these couples to divorce in order to qualify for government medical care. Furthermore, a divorce may also allow a college student to qualify for more in federal financial assistance if the custodial parent is in a lower income bracket.
The decision to divorce, whether it is a high net worth divorce or not, is never an easy undertaking, regardless of the underlying reasons. There could be serious financial ramifications that could impact retirement savings and health care costs. Texas residents who are in the process of considering filing for a marital dissolution will likely benefit from consulting with an experienced family law attorney who can structure a settlement agreement that will ensure future financial stability.