Taxes

The Mississippi Court of Appeals decided Rodrigue  v. Rodrigue located here.  One of the key issues in the case was the lack of tax considerations by the chancellor.  The court cited some language in the case of interest from another case:

“Chancellors must consider the estimated amount of income taxes the respective parties must pay on their incomes when determining the provisions of a divorce agreement. Parsons v. Parsons, 678 So. 2d 701, 703 (Miss. 1996). It was incumbent for Leigh and Herb to rely upon their tax advisor or attorney to advise them of the tax consequences of the divorce agreement.”

The Court of Appeals ended up reversing the trial court for failure to consider the tax consequences of the transaction which essentially allowed the husband to get all the money he paid under the temporary order back.  If you look through the opinion, it is a good idea to advise the client to get the advice of an accountant.  My property settlement agreements have express disclaimer language to that effect in there.  It may even be worth a motion to reconsider if you can get an accountant to go through the order of the court to address the tax consequences post trial.