There was an article in the Sunday LA Times by Ben Steverman of Bloomberg News with some very clear advice from some divorce professionals that have been doing this for a long time.
His article was written before the fires started devastating the lives of thousands of our fellow Californians. PeaceTalks and every other mediation group I know of will help with emergency paperwork in concert with any attorneys to get something in place by December 31St. Everyone will do their bit. Good luck.
When a rich couple splits, divorce attorney Lowell Sucherman gets blunt:
“Look, I’ve been doing this for 50 years,” he says early in the negotiations. “I know how this case is going to come out within a few dollars.” Find a fair way to settle quickly, he says, and you can save enough in legal fees to send your kid to college. Or you can fight tooth and nail, he adds, “and I’ll send my grandchildren to college.” His warnings work only some of the time.
Michael Stutman, a partner at Stutman, Stutman & Lichtenstein in Manhattan, said he’s seeing more feuding couples open to negotiation as the alimony deduction deadline looms.
“When you’ve got people pretty close to an agreement, the specter of losing that benefit is pushing people together.”
Stutman is handling a divorce for a real estate mogul, and it’s taking a long time for two skilled forensic accountants to untangle the family’s holdings. The couple is “beside themselves” with how long it’s taking, he said.
Peter Walzer of Walzer Melcher, a law firm in Los Angeles. said:
“Still, there may be a workaround. If a settlement agreement, which often includes alimony terms, is reached by the end of this year, many divorce lawyers said, that would probably be sufficient to still get the alimony tax break. But that isn’t airtight, and there could be issues if the agreement is altered in the future.”
Chris Chen of Insight Financial Strategists, a firm specializing in post-divorce financial planning said:
“The difference between getting a divorce finalized this year and waiting until later is significant, especially among people with high incomes.
A chief executive living in New York City who is divorcing a stay-at-home mom would pay about $35,000 in child support for their two young kids. If he makes $1 million a year and agrees to pay her $360,000 in alimony, the 2019 rule change could cost them about $23,000 annually in higher taxes, according to an analysis by Chris Chen of Insight Financial Strategists, a firm specializing in post-divorce financial planning.”
The alimony change puts even more year-end pressure on divorce lawyers, judges and clerks. It’s not clear whether courthouses will be able to handle the extra crush of paperwork.
“They’re going to have a hard time processing all these judgments” said Peter Walzer.
Just to be safe, lawyers are getting paperwork in as soon as possible.