Many couples prepare for their new marriage by drafting a prenup agreement. The reasons for doing this are as unique to the circumstances of the people involved, but the idea is to start the new union off on with a strong understanding of the financial assets and obligations.
The new Tax Cuts and Jobs Act makes changes to alimony, which many couples will need to address if their divorce is finalized after December 31. It is also smart to address those changes in a postnuptial agreement if a married couple currently has a prenuptial agreement.
Ashift in tax obligation The former tax arrangement stipulated that the spouse would pay alimony (or spousal maintenance) and it would be tax deductible to the payer and taxable as income by the spouse receiving payment. The new arrangement gives no tax deduction to the spouse who pays, but the spouse who receives payment does not pay taxes on it.
Maintaining the spirit of initial agreement
Whether it was a difficult negotiation process or a straightforward one, a current prenup may no longer accurately reflect the original spirit of the arrangement, particularly if the agreement does not already contain terms for the numeric or formulaic specifications. Think of these as course corrections to maintain the arrangement. Ideally, they will be done without damaging the relationship and not when there is an impending divorce.
A family law attorney with experience with modifications and pre- and post-nuptial agreements will be a tremendous asset in insuring that the new and binding arrangement maintains the original agreements intent while addressing the necessary changes.
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