Divorce may be an option for some high-earning Wisconsin couples who want to save money on taxes. Some couples are discussing a divorce on paper in order to avoid what has been referred to as the “marriage penalty.” This is a higher tax liability for couples who are high earners and file their taxes together.
This is not the only circumstance that has some couples discussing divorce as a way to save money. Couples who are not mega-rich may consider divorce in order for a sick partner to qualify for Medicaid if they need nursing home care. Alternatively, a couple may decide to divorce on paper in order to have a custodial parent with lower assets request federal aid for a child’s college education. It is likely that a low-asset single parent will get more federal aid than a high-earning couple.
Deciding to divorce on paper is a big decision. It is important for a couple to fully understand what a divorce would do for them not only financially but also socially. They would not want to divorce in order to save money in one way but then end up losing money in another way.
One thing that couples would want to look at is how a divorce on paper would affect their retirement benefits. It could also affect their health insurance. If one partner is no longer covered under their spouse’s health insurance plan provided through their employer, they may have to get a private insurance policy, which could easily cost $10,000 a year more.
Before making such a big decision, it might benefit couples to speak with a family law attorney. The attorney may be able to provide information about high-asset divorce and the way assets and debts would be split. They may also be able to provide information about post-divorce modification child support.