Are you worried about the cost of divorce? This article describes the various categories that might cause financial concern during a divorce.
Marriage can be a wonderful and blissful union. However, some find the bliss turns into disdain over time and divorce may become an option. As a result, you may find you are completely stressed about losing property, owing debtors and protecting your assets and income as a whole. Most importantly most people are worried about losing their separate property during a divorce.
The below top five tips highlight the key steps for protecting separate property during a divorce.
I constantly get asked, “how do I file my taxes during a divorce?” This is one aspect of divorce that is often overlooked as there is no easy answer to this question. How you (and your former spouse) will file your tax returns during or after your marital dissolution depends on a multitude of factors. The decisions you make on this can have far-reaching financial consequences, so be sure to talk to your family law attorney and accountant so that you understand what lies ahead. Here are answers to some of the most common divorce tax questions we hear from clients.
Save Your Sanity During A Divorce!
Going through a divorce is one of the most stressful life events that can happen to an individual. Through the pain, confusion, anger, and frustration of the emotional turmoil, not to mention legal headaches, it is important to find ways to save your sanity during divorce so you can come out the other side stable and ready to start this new chapter of your life.
There is a timeline for divorce in California which begins once you have filed and served your divorce papers. There are certain steps that need to happen before your marital status can be officially terminated.
6 Month Waiting Period in CA
A divorce in California will take at least 6 months, but could also take several years depending on the individuals involved. A simple, uncontested divorce will normally take 6 months to complete and is the soonest a couple can divorce, due to the mandatory waiting period in California. Seeking legal expertise from professional attorneys like Minella Law Group is always advisable, couples who are going through a divorce are advised to give mediation and or settlement a solid try before appearing before a judge. The reason is that when an authoritative entity enters into the situation, a substantial amount of control is given over to the court in the interest of having matters decided for you. Obviously, a settlement created by a judge may or may not create finality that you find satisfactory. If children are involved, there are added risks in giving over the control to a judge, and will be more difficult to adjust later and/or amend after your day in court.
Dissolution of Divorce
A Dissolution of divorce begins with the actual decision of becoming divorced. The petition for dissolution is prepared with the help of a capable attorney who prepared the petition detailing the way the divorce-seeking party would like to settle matters such as property, custody, and spousal support. The attorney then files the petition with the court and has the other party personally served. If the other party does not agree with the terms, they have 30 days to file a response to the petition. Before the settlement discussions can start, all financial documents and information referring to the case must be exchanged. If the parties cannot settle their case, it will be set for trial. Each party will present the evidence supporting their position in the divorce. Once the judge has heard all of the testimony, he or she will render a decision on how to settle the case. If one party of both parties are not satisfied with the terms set forth by the judge, it is possible to file an appeal.
Child Custody and Visitation
During a divorce, serious disagreements may arise over child custody that require experienced attorneys like Minella Law Group. Child custody disputes must be dealt with prior to the case being finalized. If the parties cannot agree on custody, it is important to get started by filing a motion in court to have the child share plan decided. There could be other issues involved such as child support, spousal support, and attorney fees that also need to be decided. It can take months to participate in custody mediation and to ultimately get a decision from a judge, so it is best to start right away.
Finalizing your Divorce
Once all the issues have been resolved, the judgment will be submitted to court for review and filing. The judge will review the judgment of dissolution to ensure that all terms are fair and that the paperwork is filled out properly. The judge will sign and terminate your marital status restoring your single status.
Despite there being a timeline for divorce in California, your divorce does not have to drag on and on. The experienced staff at Minella Law Group can advise you of your rights and assist you making the divorce process as painless as possible. For more information or to schedule a consultation, click the button below, or call us at 619-289-7948. We look forward to helping you!
Divorce is often a messy, complicated and emotionally charged affair. Hasty or poor decisions made regarding the division of money and property may haunt you after the dust has settled. There are actions you can take to protect your money during divorce, even if you are just considering a divorce. The following tips are also wise to take into consideration if you are about to get married, especially if one person is entering the union with a great deal more wealth than the other.
Keep in mind that there are Community Property States and Equitable Distribution States. A Community Property State requires that the “marital assets” be split in half equally; California is a Community Property State.
1. Consider the After Tax Value of Funds and Assets.
- For example, should your ex offer you a $50,000 IRA in exchange for $50,000 in a bank account, he or she would have access to all of the funds immediately. Should you need access to the funds you would have to pay the taxes and penalties for cashing out the IRA early and could be left with only half of the money
2. Resist the Temptation to Wage War Against Your Adversarial Spouse.
- The extra 10% they may be asking for could end up costing you less than the lawyer’s fees in an all out legal battle. It’s best to avoid confrontation and keep the peace.
- You can choose to have an attorney and have an amicable dissolution, it does not have to cost you everything you are fighting to keep.
3. Funds you Have Had in Accounts Before the Marriage Remain Yours Unless you Have Commingled the Money in a Joint Account.
- In California, the presumption is that what you owned before marriage is yours unless there is evidence to rebut that presumption.
- Also, if you owned property before marriage that property is most likely still yours unless you did something to rebut the presumption.
4. Heirlooms Given Solely to you by your Family also Remain your Property.
- Make sure you have proof that the items were indeed endowed only to you and not your spouse as well.
- Wedding gifts can be characterized as community property.
5. It’s a Good Idea to Hire a Professional Appraiser to Determine the Value of your Assets.
- An appraiser can arbitrate the value of your spouse’s business as well.
- It is also a good idea to get an appraisal of any real property to avoid disputes as to valuation.
6. Community Property is Assessed at Market Value.
- For example, the $250 pots and pans set you both own might only be worth $75 used.
7. You or your Spouse are Allowed to Return to the Residence and Claim Belongings if Either of you have Moved out.
- If you hired a locksmith to change the locks, your spouse can legally hire another locksmith to change them again and gain access to the residence unless there is a restraining order in place.
- You cannot make unilateral decisions on the division of property, they have to be joint decisions or decided by a court.
8. Spousal Support can be for Life
- In a state such as California, if you have been married for more than 10 years the spouse earning the least amount of money has the right to receive alimony for as long as he or she needs.
9. It’s a Bad Idea to try and Hide your Funds and Assets.
- There is a legal process in all states called “discovery”. Your spouse has the right to obtain information regarding all of your accounts and places where you may have stashed assets. You will likely have to provide live testimony that you have been truthful about your finances.
- You could be charged with perjury and fined if you are caught lying and lose 100% of that asset if you did try to lie. It’s best to hire a good divorce attorney who will help you get the best settlement possible.
10. Prenuptial Agreements can Potentially be Contested or Require Costly Legal Action to Uphold.
- A prenuptial agreement does not guarantee a fight at divorce but it can be helpful to identify what is separate property before walking into the marriage.
- Some people have found that a Domestic Asset Protection Trust (DAPT) can protect their funds in the event of a divorce. A DAPT is an irrevocable trust that prevents creditors from accessing your money and in some cases, can prevent your spouse from accessing it as well. You should investigate the viability of a DAPT because the rules are different from state to state.
Divorce can be a financially devastating process, but there are ways to minimize the risk and the financial loss to your assets and property. Minella Law Group can assist you to protect your money during a divorce. For more information or to schedule a consultation, click the button below, or call us at 619-289-7948. We look forward to helping you.
Tax breaks can help reduce the financial burden of raising children. Some – although not all – of these tax breaks can be divided between the parents after a divorce, which in turn can increase the net funds available to support the children. Here is how this works.
Preliminary Requirements for Dividing Tax Breaks Between Parents
There are four preliminary requirements parents must meet before they can split the tax breaks for a child:
- The parents must be divorced or legally separated, or must have lived apart at all times for the last six months of the year;
- The parents separately or together must have provided more than half of the child’s total financial support;
- One or both parents must have custody during the year; and
- The custodial parent must have waived his or her right to claim the child as a dependent for that year, meaning that parent will not get the child’s exemption on their tax return. For this waiver to be used, the custodial parent must sign IRS Form 8332, and the noncustodial parent must always attach a copy of the Form 8332 to his or her tax return for any tax year that he or she relies on the waiver. Continue Reading