The debate about taxing the wealthy is not restricted to presidential campaigning. For some people in Maricopa County, these discussions have sparked serious thoughts about how they might respond to changes in the tax system in an attempt to keep a greater proportion of their income. One of the issues that has been highlighted is the “marriage penalty.” While people at lower income levels often receive tax benefits by marrying, those in the highest bracket enter it as a married couple earlier than they would as two single high earners. However, few wealthy people are likely to divorce to save hundreds of dollars on taxes, especially given that the costs associated with property division would far outweigh the tax savings involved.
Still, the concept of strategic divorce can be appealing for people of different financial means when dealing with certain types of problems. Marriage can provide safeguards and benefits, but it can also pose difficulties. For example, an elderly person with dementia or terminal illness requiring full-time nursing care may find it difficult to pay down their assets enough to receive Medicaid coverage for a nursing home. Their spouse may also be left impoverished. Divorce may be an appealing option if it could help the partner in need receive care.
Parents may also find themselves considering divorce when they confront the escalating costs of college attendance. Financial aid is assessed based on the income of the custodial parent only, so divorcing and establishing the lower-income parent as the one with custody could help a child to get more loans and grants for school.
There are a wide range of complex financial consequences that can come with any divorce, no matter how amicable. A family law attorney may provide guidance on reaching a fair settlement on property division, spousal support and other matters.