New tax code changes may have collateral effects on divorcing couples in West Michigan. One potential impact could be more complicated disputes over the relevant deductions for minor children. The new Tax Code not only increases the child tax credit to $2,000, it allows for a $500 for other family dependents.
The new Tax Code has also changed the restrictions on 529 College Savings Plans, allowing these funds to be used on K-12, not just college, expenses. Most divorce agreements may not include specific instructions for the use of these funds, creating a potential post-judgment dispute if one parent wishes to deplete the account for pre-college education expenses.
If both parents agree that the 529 Plan should be used for college only, this agreement should be clearly documented so the funds will be available as expected and not used for other, earlier school expenses.
Too often, parents forget that their actions can have long-term effects on their children. A child’s college savings account is now an issue that might be disputed during a divorce case; the ultimate decision significantly impacting the child.
Divorce is difficult for everyone involved, but itis important to keep children out of the process as much as possible. Children of divorcing parents are already going through one of the most difficult experiences in their lives. Parental fighting can lead to behavioral issues that last into the young adult stage, and children of divorce are also more likely to do poorly in school and struggle with anxiety, betrayal, and loss.
For more information on changing tax laws and how they could impact your decisions during a divorce, please contact the experienced West Michigan attorneys at Johnsen Wikander and let us help you through your most difficult time.