North Dakota couples that have decided to move forward with divorce may think that it’s best for their interests to negotiate a final settlement out of court. This can allow a couple to avoid some family law disputes that come with litigation, but it is smart to keep the focus on a strong post-divorce future throughout this process. One way to do this is to consider the tax implications of all divorce-related choices.
Being smart about taxes during divorce can protect a person’s interests in the future. One of the most important tax-related considerations during divorce is the tax credit for kids and which parent can claim them. Typically, the parent who has the majority of parenting time will get this benefit. Additionally, parents will also want to think about how the income of the custodial parent could affect their child’s eligibility for financial aid in the future.
In divorces where one spouse is likely eligible for spousal support, recently changed tax laws make it especially important for a couple to carefully consider how they handle this type of financial support. These changes have made it more difficult to negotiate over the issue of alimony. In some cases, it may make sense for the paying spouse to put that money in a trust.
Before agreeing to any terms, it is prudent to do a run-through of the entire tax situation. This can help someone understand options and make practical and beneficial choices for the future. There is benefit in speaking with a North Dakota family law attorney about the specifics of the individual situation before agreeing to a settlement.