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Why you might want to revisit an alimony-linked prenup now

We duly noted a flurry of divorce-tied activity in a relatively recent blog post, stressing in our May 1 entry that some family law pundits “expect a rush of divorce filings before the end of this year.”

Some New Jersey readers of our blog at The Law Office of Rajeh A. Saadeh in Somerville know that the cited uptick relates to material adjustments in federal law relating to alimony. Others might be a bit in the dark concerning what will imminently be a new reality.

Here’s the bottom line: Alimony payments will no longer be deductible to the payor or taxable to the recipient from January 1 of next year.

That could be considerably important, of course, to legions of couples across the country contemplating the severing of marital ties. The above blog post goes into some detail concerning why and how the 2019 change could loom large in many divorce-linked negotiations and outcomes.

A recent online spotlighting of the new law duly points out that the adjustment also spells news for another demographic as well, though.

Namely, that is couples who have already executed marital contracts (either prenuptial agreements or postnuptial contracts) with embedded understandings grounded in legal underpinnings that did not – reasonably could not –anticipate the 2019 changes. That is, the negotiations surrounding such agreements were fully premised on the belief that a future divorce would yield spousal maintenance payments deductible to the payor and taxable to the payee.

That will decidedly no longer be the case for divorce outcomes realized just a few short months from now.

The modified law will unquestionably necessitate a timely and close review by many couples of marital contracts executed sometime in the past. As the author of the above-cited article stresses, they will “need to be proactive in modifying their agreements.”

A proven family law attorney with a deep well of experience helping clients negotiate and draft key agreements can help with that.