The last three months of the year have begun, which means that many Massachusetts residents may be trying to determine what matters they need to wrap up before the end of the fiscal year. This endeavor took on more significance this year since new tax provisions take effect on Jan. 1, 2019. Couples awaiting the final order in their divorces are probably glad they had the chance to resolve any alimony questions before it was too late.
Divorces finalized next year that include alimony provisions may include lower payments than they would this year. This is because the paying former spouse will not have the right to deduct the amounts paid from his or her taxes, which could make it more difficult to afford higher payments. Many suspect that courts will begin making smaller awards since the resources of paying spouses could diminish.
Massachusetts couples who wanted to take advantage of the current tax laws probably scrambled to reach a settlement or get through the trial phase in time to get their cases finalized by Dec. 31 so they can continue to enjoy the current tax advantages for payors and the (potentially) higher payments for payees. Some locales in other parts of the country are preparing for a deluge of filers wanting to get their divorces pushed through before the end of the year. Even though many jurisdictions can’t afford to hire extra help, resources could be diverted from other areas to assist.
Here in Massachusetts, couples anticipating the tax changes in the treatment of alimony need only wait out the remainder of their 90-day Nisi period at this point. However, those whose divorces will not be finalized by Dec. 31 are not necessarily out of luck. They simply need to take a different approach to their negotiations in order to help ensure that each party receives a fair and equitable settlement. Finding that balance in light of the new tax laws will probably require the advice and assistance of legal resources in the area.