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DuPage County divorce lawyer for tax issuesWhen going through a divorce, many people wish it was as simple as dividing everything in half and ending the marriage. However, divorce is often much more complicated, and in addition to settling issues like the division of property, couples must also consider how taxes will affect their case. Here are a few ways that taxes can complicate the decisions made during your divorce:

Taxes on Alimony Payments

Recently, the way spousal maintenance (alimony) is taxed changed significantly, although this change only applies to those who finalized their divorce on or after January 1, 2019. For these couples, the person paying alimony cannot deduct the cost of these payments from their taxable income, while the person receiving alimony will not report it as income. This may have a detrimental effect on the amount of maintenance that a person will pay. In some high net worth divorce cases, the spouse paying maintenance may be able to reduce their tax burden by creating a trust that will be used to make payments to their ex-spouse.

Taxes on Real Estate

A person who makes less money than their ex-spouse may wish to keep the family home in the divorce instead of spending more money to buy or rent a new home. However, recent changes to the tax codes could also affect this decision. State and local property taxes are no longer fully deductible from federal taxes, and this could mean that the spouse who keeps the home may not be able to afford to pay property taxes. In many cases, it can be more beneficial to sell the house during the divorce and divide the proceeds between the spouses.

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When facing a high net-worth divorce, parties may question the "best" possible path. Should they go through mediation and settle? Is litigation the answer? Deciding is not always easy. Each case is unique, and the exact details do have a significant influence on the more appropriate path. Still, some considerations can help you in weighing the pros and cons of each option. The following information offers some guidance, and it explains where and why you should seek assistance before making a final decision.

Domestic Violence, Intimidation, and Coercion

Statistics indicate that one in four women experience physical abuse in an intimate relationship. Abuse rates for men, which are thought to be underreported, are about one in seven. When you add in those that are emotionally or financially abused, the rates are much higher.

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Family dynamics have changed significantly over the last few decades, but there are still areas where women remain at a disadvantaged. One prime example is when they embark on divorce. Thankfully, women can mitigate against their risks in divorce. The key is to know what the most common mistakes are, and how to avoid them. The following explains further and provides some details on where to find assistance.

Understanding the Potential Risks

Women have become fully integrated into the workforce, but there are still some that choose to remain home. Some do so to care for children. Others do so because they have no need to work. Still, others simply may not have the education or skills to secure gainful employment. Whatever the reason for not being employed outside the home, these women are at a serious risk for financial disadvantages after the divorce.

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While nearly every divorce is painful and difficult, it is those with a high net worth that tend to be the most contentious. Sadly, it is often the lower-earning or non-earning spouse who is at a severe disadvantage during the case. What is worse, many do not realize that the asset hiding and deception that sometimes occurs often takes place long before the divorce starts. Learn more about protecting your finances in a high net worth divorce with help from the following information.

Asset Hiding Often Starts During the Marriage

Non-earning and low-earning spouses are often kept in the dark when it comes to their marital finances. Sometimes it is because the disadvantaged spouse was not concerned about their finances or divorce. In other instances, the lack of knowledge is intentional; their spouses may have been hiding money for years - perhaps since the start of the marriage.

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Divorce can be an expensive undertaking for anyone, but entrepreneurs and business owners are at an especially high risk for financial complications. Thankfully, divorce planning can (and often does) help mitigate this risk. Learn more about how you can effectively prepare for your divorce, and why an experienced divorce lawyer is critical in this process.

The Sooner the Better

Perhaps the most critical thing to know about preparing for divorce is that sooner is almost always better. Time is literally everything. You will need to track your finances, living expenses, and determine the overall value of your assets so you can plan appropriately for your potentially scaled-down lifestyle. The extra time also gives you and your attorney a bit longer to work on developing a strategy. That might mean waiting until the "right" time to file or knowing which assets you should keep and which ones you should sell.

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