The economic and emotional challenges that follow most Florida divorces can be even more difficult for older couples. For starters, seniors have fewer potential working years left. Additionally, the Tax Cuts and Jobs Act legislation that was signed into law in December 2017 has provisions beginning in 2019 that will impact many future divorces.
The new tax law changes how alimony is treated for federal income tax purposes. Previously, alimony was deductible by the payor and treated as earned income for the recipient. Beginning with new divorces in 2019, the payment of alimony will be considered a non-taxable event. This switches the respective tax liabilities of the payor and payee.
The family home and retirement accounts continually rank as the biggest assets for property division considerations. If one receives the family home, a question of the ability to pay arises. If the house is sold, the amount of gain excluded for tax purposes for a single person will be half of what it would be for a married couple. The money in retirement accounts may or may not be subject to taxation upon withdrawal depending on the type of account. Furthermore, if more than mandatory distributions are needed, penalties may apply.
Family law involves a number of important legal issues that become all the more complex when a high-asset divorce is in play. That's why an older person going through a divorce may need legal representation. A family law attorney can help craft an agreement that recognizes and respects the rights and responsibilities of all the parties involved in a divorce.