Most people are interested in ways that they can save money, but not everyone is interested in putting their marriage on the line to do so. However, the so-called ‘marriage penalty” has some high-earning Pennsylvania couples talking about using a strategic divorce in order to save money on their taxes. The Tax Cuts and Jobs Act subjects high-earning couples to a higher tax liability when they file taxes jointly.
Despite the fact that strategic divorce can be used to help some couples save money, there are several downsides that a couple would want to consider to make sure they are not saving money in one area and then losing money or paying out a lot of money in another area. For example, one spouse may use health insurance that comes through the other spouse’s employer. If a couple were to divorce, private health insurance policies can be expensive, up to $12,000 per year.
Strategic divorce could also negatively affect a business that is owned by a couple. Even if the terms for the divorce are amicable, one of the individuals may be making a decision that would give away their control of the business from a voting power perspective. It is a lot of leverage to give to someone. The individual who has less power may always have doubt in the back their mind.
Before a couple makes a decision about divorcing in order to save money, they may decide to speak to an attorney. A family law attorney may be able to provide information about how a divorce would impact their business interests. The couple may find out how the business would be split in the divorce and how much control each ex-partner would have over it. The attorney may also provide other practical information to help a couple make a decision that would benefit them now and in the future.