For those about to get divorced in Kentucky or anywhere else in the United States, it may be a good idea to finalize it by the end of 2018. This is because the Tax Cuts and Jobs Act (TCJA) calls for the tax treatment of alimony to change starting on the first day of 2019. However, if a divorce is finalized before then, the terms of the split can be changed while maintaining the status quo regarding alimony.
People in Kentucky rarely want to think about the potential of divorce while they're still engaged in wedding planning. Nevertheless, planning can help people to avoid bigger problems further down the road, even for people of modest means. When people think of prenuptial agreements, they often think of celebrity news or heirs to family fortunes. However, many people can benefit from developing prenups to protect their interests in the case that their relationship changes in the future.
People who live in Kentucky and who are getting a divorce may make some common financial mistakes if they are not careful. For example, some people might be tempted to go on a spending spree during or just after a divorce. While this may be satisfying in the short term, those bills will need to be paid eventually.
There are certain personality traits that may increase the likelihood that a Kentucky resident might get a divorce. For example, all people are selfish sometimes, but people who are consistently selfish and always have to get their own way may be endangering their marriage.
Kentucky divorces in which children or alimony are a factor will be affected by the 2017 Tax Cuts and Jobs Act. This act changed how parents can claim children on their taxes and how alimony is treated.
A growing number of older Americans in Kentucky and across the country are choosing to end their marriages. While divorce rates have held steady or even declined across the American population as a whole, "gray divorce" rates have doubled since 1990 for people age 50 and older. As is the case for younger couples, divorce is more likely when a couple is married for a second time or when they have only been together for a few years. However, many older couples divorcing have been together for many years or even decades.
Choosing to untie the knot can have a serious health-related impact on anyone in Kentucky regardless of age. This is why it ranks as the number two stressor on a scale that predicts what life events are most likely to result in a stress-induced breakdown within a two-year period. For couples 50 and over, uncoupling can be even more impactful on health. What's more, while divorce rates have fallen for people 40 and under, they have doubled for older adults since 1990 - a phenomenon often referred to as "gray divorce."
Research indicates that women who come from divorced families are 60 percent more likely to go through a divorce themselves. For men who come from divorced families, it's 35 percent. Kentucky couples who have beaten the odds by staying married until they reach an older age need to be acutely aware of these risks. That's because divorce has become more socially acceptable and common, and this is especially true for couples past the age of 60.
In 2015, more than 600,000 taxpayers across the country, including many in Kentucky, were able to claim a deduction for alimony payments. However, thanks to the Tax Cuts and Jobs Act, alimony will no longer be deductible by the individual paying it and the income will no longer be taxed for the individual receiving it as of 2018.
Kentucky residents who decide to divorce may face more significant, longer-lasting financial changes that far outweigh the emotional issues that can accompany the end of a marriage. After years of building savings accounts, the division of assets that comes with divorce can lead to major changes in each partner's budget and approach to spending. One of the most significant asset types dealt with during a divorce is the couple's retirement savings. These funds are often a couple's largest single asset, and the distribution that comes with the divorce may spark each partner to begin saving intensively for the future.