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San Mateo California Family Law Blog

Important information regarding alimony

It is relatively normal for one spouse to outearn the other in a marriage. For any given couple this could be for a number of reasons. One person might be employed in a career that has higher average rates of income, or maybe another has more education than the other. In other cases a spouse might have chosen to leave the working world to stay home and care for children. In these situations, alimony usually comes up.

Alimony is also frequently referred to as spousal support, and is a form of financial support after a divorce. Many people in California believe that alimony is a given that always comes up during divorce. However, not everyone is entitled to alimony. Here are just a few factors that courts will take into account when determining whether alimony is justified and, if so, how much.

  • How long the marriage lasted.
  • The marital standard of living.
  • Current incomes and earning capacities of both parties.
  • Financial contributions of either spouse.

Your 2nd divorce can be complicated, but not impossible

It is not uncommon for people in California to remarry after previously ending an unhappy marriage. However, this means that some people will eventually go on to divorce for a second or even a third time. While no two couples or divorces are alike, people who are divorcing for the second rather than the first time will encounter some unique challenges.

There is no denying that divorce can have an impact on a person's finances. This means that even if a second divorce comes many years later when a person has had the opportunity to accumulate many more assets, he or she could still feel the impact from the first divorce during the second one. This includes things like still paying spousal or child support from a first divorce. Retirement assets that were previously split could also shrink even smaller.

Address property division and more with a postnuptial agreement

Creating a prenuptial agreement is a good idea for many California couples. However, maybe you did not think you needed one or did not understand the full range of benefits associated with a prenup. Even if you initially decided against a prenup, it is not too late. You can still address family law matters like property division and more through a postnuptial agreement.

Postnuptial agreements are signed after you and your spouse have already tied the knot. Deciding that you want a postnup is not a sign that you are headed toward divorce, so you probably should not feel worried even if your spouse is the one to bring up the subject. In fact, postnups usually address many of the same topics that prenups do. Here are just a few reasons why you might want a postnup:

  • You need to designate assets for a child from a past relationship.
  • You want to create an official line of support for an arrangement or understanding regarding finances, marriage counseling or more.
  • You need to designate which property is separate and which is marital, or you need to change the character of your assets.

How retirement accounts factor into property division

Retirement assets generally comprise a sizable portion of California couples' assets. When it comes time to divorce, how to treat these assets during property division is a serious question. Most people want to avoid taking any penalties or encountering tax consequences for making withdrawals, but are unsure of how to do so. A Qualified Domestic Relations Order is usually the solution.

When dividing a defined contribution plan such as a 401(k), a QDRO is legal order for dividing the savings. The QDRO allows money related to the divorce to be withdrawn before the age of 59.5 without incurring the typical 10% tax penalty. Regular income taxes do still apply to these payments, so divorcing couples should be aware that these payments are not totally tax free.

Divorce doesn't have to be hard -- try mediation

Minimizing expenses, time management and conflict is high on the list of priorities for many California couples who are ready to end their marriages. However, popular media often likes to portray divorce in a singular way -- litigious, costly and time-consuming. This does not have to be your reality. Depending on your situation, mediation could provide a meaningful alternative to approaching divorce.

As a form of alternative dispute resolution, mediation seeks to help divorcing couples negotiate their own settlements. While you might have previously believed that only a judge could create a divorce settlement, you and your soon-to-be ex-spouse understand your situation more than anyone else. Using mediation lets you keep control over the outcome of your divorce and agreements.

A high asset divorce does not have to be litigious

While virtually all divorces have to go through the same processes of property division, figuring out alimony and even child custody agreements when applicable, some divorces are far more involved than others. In a high asset divorce, a couple in California will generally encounter more complicated assets that are difficult to divide. For some, things like reputation could also be a complicating factor. Here are a few things to keep in mind when dealing with this type of situation.

A cohesive narrative can be surprisingly helpful for maintaining civility both inside and outside of the divorce. For example, Amazon founder and CEO Jeff Bezos released a joint statement with his ex-wife, novelist MacKenzie Bezos. Even if this joint statement regarding the divorce only came about after days or even weeks of arguing over its contents, it still accomplished its goal -- setting a tone for civility. It also keeps friends and loved ones from choosing sides, which can fuel some people's urges to right perceived wrongs or to "win" the divorce.

Determining property division in a divorce

Dividing assets can be a difficult process. Most people want to get through the divorce process as amicably as possible and reach a fair agreement. Property can be a particularly challenging issue, but California law has measures in place to ease the difficulty.

A schedule of assets and debts form that each party completes to disclose all property and finances to each other. The purpose of this exercise is to assess how each spouse values the assets of the marriage and whether both parties consider certain assets joint or “community” property. This allows each side to see what issues still need resolution and whether they will require litigation. A court’s interest is coming to an agreement that is fair and as equitable for both sides.

Determining property division in a divorce

Dividing assets can be a difficult process. Most people want to get through the divorce process as amicably as possible and reach a fair agreement. Property can be a particularly challenging issue, but California law has measures in place to ease the difficulty.

A schedule of assets and debts form that each party completes to disclose all property and finances to each other. The purpose of this exercise is to assess how each spouse values the assets of the marriage and whether both parties consider certain assets joint or "community" property. This allows each side to see what issues still need resolution and whether they will require litigation. A court's interest is coming to an agreement that is fair and as equitable for both sides.

Preserve your retirement stability during property division

Divorce is an unavoidable part of life for some people, but it does not have to be a wholly negative experience. While many California couples understandably struggle with the emotional aspect of ending a marriage, a measured and careful approach to property division can make the legal side of things somewhat easier. However, even those individuals who are focused on preserving their financial stability after divorce can overlook something very important -- retirement.

Whether retirement is a matter of years or decades away, the importance of planning cannot be understated. Divorce can impact a person's retirement readiness, but there are ways to minimize this impact while also preserving other measures of financial stability. A good first step for anyone is to understand the types of retirement accounts they have and how they are handled. For example, while an individual retirement account -- an IRA -- only lists one person's name, the contents may still be considered marital property.

Property division decisions can impact credit scores

Financial security following a divorce is an issue that should not be overlooked. It can be easy to overlook the small details or long-term implications of decisions made during property division, particularly when the initial effects might feel immediate. However, forgetting about things like credit scores and how these numbers can impact future finances can lead to undesirable outcomes for California residents.

Divorce in and of itself does not harm a person's credit score. However, the decisions and actions made during and after a divorce certainly can. Untangling years or even a lifetime of marital property -- including debt -- can be complicated, particularly if there are several complex accounts. However, once everything is divided up and the divorce decree is approved by a judge, most people are content to focus solely on their portion of the assets.

California Family Law And Litigation

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