Prenuptial agreements provide many protections to those who want to get married. They can protect you from your partner’s debts and protect your assets from them if you want to get a divorce.
Changes in the way alimony payments are being treated in America could hurt many who signed prenuptial agreements including provisions about alimony. Alimony may be added to prenuptial agreements, dictating what a person pays to the other if he or she wants a divorce. Normally, provisions can be dismissed if a court finds them unfair. Now, with changes that make alimony nondeductible, judges have to consider how that affects those who signed prenuptial agreements when old laws were in place.
This could throw off many people’s agreements. The change could result in those in higher tax brackets paying much higher taxes than they would have previously. With divorces becoming more common and prenuptial agreement use increasing as well, there’s no reason not to think that these changes will influence thousands of people. Adjusting a past prenuptial agreement might not be possible for some couples, or it could create contention in a working relationship as a couple discusses altering an agreement they were both happy with in the past.
Governmental changes to taxes, in particular, can have far-reaching consequences. For those it affects, the tax changes could cost them thousands more that they believed they would have saved in deductions on their taxes. For more on these changes and how they could affect you, make sure you speak with someone familiar with the new changes in the law.
Source: Daily Herald, “Prenups under attack as tax law boosts cost of alimony payments,” Ben Steverman, June 03, 2018
