Are Some Couples Really Getting Divorced Just to Take Advantage of Certain Tax Benefits & Other Programs?
A recent CNBC article addresses an important issue that has emerged today, and that is the consideration that a number of couples are considering getting a divorce simply in order to get by financially. This is known as a “strategic divorce,” and sometimes this is done because a couple feels like they are suffering from the “marriage penalty,” whereby they are getting overtaxed simply because of the tax bracket they fall into due to filing jointly with two incomes, or they have to get a divorce in order to qualify for Medicaid, for example, so that their child or another family member can get the health care that they need.
Paying for Particular Healthcare Costs
Indeed, if the family is in need of Medicaid for any reason, for example, to pay for nursing home care, they may, as a couple, have too many assets to qualify. This leaves some families with a choice of draining their assets and retirement accounts in order to cover the nursing home expenses, or getting a divorce so that they each have fewer assets and therefore could potentially qualify for Medicaid, without draining their assets to qualify.
Financial Aid for College
Another reason that some families may find divorce appealing is so that they can be able to obtain more financial aid to send their kids to college. Similar to Medicaid, it can be difficult for the children of couples with a combined income to qualify for financial aid. However, on their own, the custodial parent who fills out the Free Application for Federal Student Aid (FAFSA), has a lower income and other assets than they would while married, and could qualify for more financial aid for their child’s college education.
…Still, Don’t Neglect Working with The Right Attorney
Regardless of how amicable your divorce may end up being, working with an experienced divorce attorney helps ensure that you are protected in moving forward when it comes to important assets and expenses that you may not want to change once you are divorced. For example:
- You want to make sure that any retirement benefits do not suffer: This means pensions, joint and survivor benefits, 401(k)s, IRAs, etc. Some of these assets need to be split up via a qualified domestic relations order.
- You also want to make sure that you do not now have to pay out some $12,000.00 per year for healthcare premiums because you are no longer listed on your spouse’s plan but may not qualify for healthcare assistance. This could completely negate the financial benefits you experience from the divorce itself.
- If you started a business during your marriage, you absolutely must work with a divorce attorney, as addressing this asset can be very complex, whether you are splitting the business, buying the other spouse out so that you can keep it running, or pursuing other options. In fact, some shareholders ensure that spouses sign specific forms to ensure that they do not end up working with the founder’s ex-spouse, and so that other interests are protected.
Contact Our Orlando Divorce Attorneys
Regardless of what your reasons are for considering or pursuing divorce, contact our experienced Orlando divorce attorneys at Greater Orlando Family Law today to find out how we can help.