The Importance of Expert Tax Advice in Divorce

Most people who get divorced do so without the benefit of a tax expert.  

They get tax information and/or advice from their divorce attorney.  However, as this Forbes article points out, divorce lawyers are not the best tax advisors.

In fact, most divorce lawyers go out of their way to disclaim any liability for tax advice in separation agreements and fee agreements.  

So, if you are getting a divorce, and you can’t rely on a divorce attorney for expert tax advice, what do you do? 

Collaborative attorneys figured this out a long time ago.  In a collaborative divorce case, expert tax advice comes from the financial neutral. 

The financial neutral provides unbiased neutral information and advice about tax issues that relate to divorce.  That way, both parties get the same information at the same time.  And, they are not getting in unnecessary conflicts due to differing tax advice from either their attorneys or their own individual tax advisors.  

And here’s the best part about financial neutrals in collaborative divorces:  A good piece of tax advice can save tens of thousands, if not more, for the couple.  One small piece of information can have a huge impact on the financial futures of both clients. 

On the other hand, the absence of that information can have a huge negative impact on both clients.  

Tax issues are another big reason to take advantage of the collaborative process and the financial neutrals that help clients in the process.

Divorce and Taxes

As this article from Time Magazine points out, there are many tax issues involved in a divorce.   Even parents who have never been married (and therefore never divorce) face tax issues related to sharing time with their child.

There are special tax treatments for alimony, post separation support, property division, dependency exemptions, child tax credits, head of household status and a myriad of other issues in family law.  

While the five issues mentioned in the article about divorce and taxes are important, they are not the only issues involved.

I generally recommend that clients at least consult a CPA or other tax professional before and after their divorce to determine how the tax ramifications of the divorce may affect them.

A good family law attorney will understand most of the tax issues involved in divorce.  But, a family lawyer is no replacement for the advice of a good tax professional. 

Randolph (Tré) Morgan III is an experienced family law and collaborative divorce attorney accepting cases in Raleigh, Cary, Apex, Garner, Fuquay-Varina, Clayton, Smithfield, Wake Forest, RTP, Durham, Chapel Hill, Holly Springs and surrounding areas.  He focuses his practice in divorce, child custody, alimony, child support, equitable distribution, property division, paternity, guardianship and other family related matters.