New York, NY family law attorney Lisa Zeiderman talks about how taxes affect your divorce settlement. She emphasizes that taxes play a critical role in divorce settlements, and it is essential for a matrimonial attorney to identify and address potential tax issues. For example, with restricted stock units (RSUs), taxes are typically assessed when the units vest, and they are treated as income at that point. If a client negotiates to retain RSUs while providing a payout for their value, it is crucial to account for the appropriate tax liability and include a true-up provision in the agreement to address any discrepancies that may arise later.

Capital gains taxes are another important consideration. For instance, if a spouse wishes to keep the family home purchased many years ago, the potential capital gains upon a future sale must be factored into the settlement. Strategies may include selling the home during the divorce or structuring ownership so that both parties can benefit from applicable deductions—such as the $500,000 exclusion for married couples—rather than facing higher taxes later.

Taxes on business assets, real estate, and brokerage accounts must also be carefully evaluated. Appreciated stock or other investments acquired over many years may carry significant capital gains, and any division—whether through payouts or in-kind transfers—requires careful calculation of tax cost basis. She stresses that thoughtful planning of these tax issues is essential to ensure that the settlement is equitable and that both parties understand their financial obligations post-divorce.