Alimony is soon changing in this country. For individuals in California dealing with a high asset divorce, the timing of one's divorce can soon become important. A change in the tax code brought about by the Tax Cuts and Jobs Act will now make alimony payments non-deductible for any divorces made after 2018.
Individuals in the state of California typically must wait six months before a divorce can be finalized, so for any person who wants to end his or her marriage this year, time is running out. For any person who wishes to take advantage of the alimony rules as they currently exist, the time is now. Of course, there are pros and cons to each side, and luckily, a person can review the law against his or her own situation to see which is best.
In some circumstances, a person may be able to pay (or receive) a lump sum payment instead of recurring monthly payments when settling his or her divorce. Attitudes about alimony are changing, since both partners now typically have an equal chance to accrue income. Alimony payments are now more on a focused timeline instead of being a support that one can count on for life.
A high asset divorce may include alimony when one of the partners makes considerably less money or had to take time away from work to raise the children. In California, individuals with a high net worth will likely want to review the rules surrounding alimony as they undergo the divorce process. Since, sometimes, the impacts are hard to discern, many people choose to work with an experienced family law attorney for help in settling their divorces.
Source: CNBC, "Act now if you want to keep this tax break when getting a divorce", Lorie Konish, May 31, 2018