When young couples are preparing to wed in Tennessee, one of the last things they feel like addressing is a prenuptial agreement. However, this decision can be valuable in creating some agreements designed to protect both parties in the event of a divorce. Once an agreement is made and signed, it seems unlikely that the meaning could change over time, but it can happen in certain circumstances.
A change to the tax law that was recently passed by Congress is a perfect example of how something unexpected has the potential to alter the meaning of certain clauses in a prenuptial agreement. While the impact could be more severe for some couples than others, the changes mostly have to do with alimony and the coordinating benefits. The new tax law eliminates the paying spouse's ability to claim alimony on his or her taxes. If an agreement regarding alimony was addressed in a prenuptial agreement to protect the paying spouse, the recent changes to the law could actually negate the clause and leave the paying spouse at a large disadvantage.
For couples who suspect their prenuptial agreement has been affected by the changes, they may benefit from a brief meeting with a financial advisor who can assist them in identifying the areas where changes may have been made. When they are aware of the impact of the law on their agreement, they may be able to alter other clauses to provide a more beneficial outcome.
If couples are looking to create or modify their prenuptial agreement, they may wish to contact an attorney. A legal professional has all of the tools to help couples negotiate agreements in a manner that provides advantages to both parties.
Source: FinancialPlanning, "New tax law could doom divorcing clients," David Friedman, May 3, 2018