Could a Divorce Improve Your Finances?
When I was single, I thought that getting married would reduce my expenses greatly, and after I got married I realized that in some instances married life is actually more expensive . In general, divorces are extremely costly and detrimental events, but ironically there are so many laws pertaining to marriage and finances that could make a divorce financially advantangeous for a committed couple. Here are some of the bizarre examples I have read in the news recently.
- Couple considers divorce to avoid Alternative Minimum Taxes - Our convoluted tax code puts many people in a higher tax bracket once they tie the knot. The Alternative Minimum Tax or AMT for short is a tax system that disallows many deductions allowed in the regular tax system so many married couples with children are affected by it. In this particular story the couple are not divorcing each other, but if they did they could save over $20,000 a year on taxes.
- Husband of disabled Walmart worker divorces her to give her better medical benefits - In this sad story the husband Jim Shank is still deeply devoted to his disabled wife, but he secured a divorce from her so that she could get more Medicaid benefits.
These stories are interesting because the couples are not the typical golddigger or hollywood star who sheds marriages like dandruff. They are actually people who want to improve their marriage through a legal divorce. It is pretty oxymoronic, and it could be said that these people are abusing the system by getting a divorce, but why are the laws concerning taxes and various benefits so different between married and single people that such situations arise?
What do you think? Would you get legally divorced to financially benefit your family?