Many of our clients are not thinking about how taxation affects settlements in their divorce. However, the process of dividing assets and liabilities, and decisions of child and spousal support can have a significant impact on one’s taxes. There are many issues in a divorce that have an impact on taxes including:
- Liquidation of Stocks or Assets
- The Sale of a Business
- The Structuring of Alimony / Spousal Support and Child Support
- Distribution of Retirement Accounts
- Sale or Transfer of a Home or Real Property
At the Law Offices of William L. Geary, we give careful consideration to the tax implications of a proposed course of action or settlement. We look at the potential “net cash after tax” implications of each aspect of the separation agreement to make sure that both parties receive the greatest net benefit and direct you to your financial counselor or C.P.A., when necessary. Any monies that are rightfully owed through taxation are dollars that are not left in the hands of our clients.
For example, generally speaking in Ohio, spousal support is taxable income to the spouse who receives it, and serves as a tax deduction to the spouse who is paying it. However, in some cases we may be able to keep more actual cash in the hands of both parties if we replace spousal support with a trust asset, stock or cash in a specific investment or account and avoid spousal support payments or receipt of spousal support.
We regularly work with CPA’s, accountants and financial professionals to calculate the tax implications of each component of a proposed settlement, and to structure transactions that provide the greatest net benefit to each of the parties. If you are concerned about business ownership, substantial assets in a divorce or the taxation affects settlements involving property division or support we invite you to contact us at (614) 289-1227