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Changes on divorce and tax rulings

| Mar 23, 2021 | Divorce |

A few months ago, the state Supreme Court of Appeals issued a decision that could change the way state courts interpret the tax burdens of each spouse in a divorce. In this particular court case the husband raised an issue with the tax rates in his divorce. He argued that tax rates had not been accounted for in his corporate and military pensions. Because of that, the husband contended the wife received an unjustly larger share of their marital property.

The Supreme Court’s Decision

The majority of judges in the Supreme Court of Indiana agreed with the husband’s argument. The Supreme Court felt that the 60% to 40% division of property in the wife’s favor was unfair to the husband. The Supreme Court sent the case back to one of the lower courts and ordered the lower court to reevaluate their decision.

Departure from previous law

One Supreme Court judge who disagreed with the majority noted that the new ruling was a departure from the Court’s previous line of thought. In a previous case, the Supreme Court ruled that taxes should only be accounted for in the division of martial property during a divorce. The decision in that previous court case said nothing about accounting for pensions in tax calculations.

Future Implications

Since there were dissenters to the majority opinion in this court case, the Supreme Court may consider revisiting the issue of divorce and tax rates at a later date. This ruling – and the possibility of more changes – will make the already difficult task of property division even more complex. Keeping up with the changes in divorce law may require professional help. Skilled lawyers can offer assertive legal representation, potentially winning their client a favorable outcome – like the husband’s outcome in this court case.