Photo of Greco Law attorneys in office conference room

High-earning couples may divorce to save money

On Behalf of | Oct 30, 2019 | High-Asset Divorce |

Married couples in Ohio often break up because they cannot reconcile their differences. For instance, they may split up because they are at odds about the right approach to spending their household dollars. Still, in some situations, the desire to save money may actually be the reason why two people choose to get a divorce.

According to a new act in 2018, spouses who earn a high household income and file their tax returns jointly can expect to pay more in taxes compared with lower earners. Specifically, those who earn over $612,000 annually fall under the 37% income tax bracket. For this reason, high-earning couples may consider getting divorced to save money at tax time.

The challenge with this move, though, is that it may have consequences that might affect their financial statuses in the long run. For instance, if one person has a pension through his or her company, the two individuals must figure out how to go about splitting it if it is a marital asset. Also, if they both have 401(k)s, they would need to give each other permission to obtain these funds as beneficiaries after they have divorced. If they were still married, the funds would typically go to the other party automatically.

Navigating the divorce process can be challenging no matter what situation is driving the divorce. Fortunately, an attorney can help with this process. The attorney can advise the client on how to approach property division and child custody, for example, with the goal of achieving a comprehensive and fair outcome with the other party in Ohio.