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Riverside Family Law Blog

Debt may cause conflict during divorce

One of the most contentious aspects of divorce involves the splitting of assets between oneself and one's soon-to-be ex. However, another major source of financial conflict during a divorce proceeding may be the division of debt in the marriage. A couple of tips may help individuals in California fight for their best interests when addressing such debt during a divorce proceeding.

In California, which is a community property state, most debts that either spouse incurred while married end up being owed by both individuals. This is true even if just one of the individuals signed the necessary paperwork for particular debts. As a result, people can walk away from a marriage being responsible for debt racked up during the marriage for the purpose of covering family necessities or maintaining assets that were jointly owned.

Amicable divorce may benefit a person financially

Getting through divorce can be financially stressful, especially when the process of dividing marital assets and property is complicated. When two people cannot agree on the best way to distribute their assets, this only makes matters worse. However, aiming to be amicable can go a long way in achieving one's desired outcome in a California divorce.

First, it is imperative that a divorcing individual try to keep his or her emotions out of the decision-making process. Instead, it is important to be as clear-headed and rational as possible; appropriate legal guidance can help with this. It is also important to avoid being vindictive, as this may only stifle the divorce process rather than moving it forward.

Property division during divorce can affect business owners

Owning a business can be a source of pride for an individual in California. However, it can quickly become a source of heartache if that person decides to get divorced. A couple of tips can help divorcing individuals to protect their business interests while tackling contentious issues such as property division.

If a business owner's spouse plays an active role in the family business, it is worth noting that the spouse can make a stronger case for having an interest in this business as well as its profits. The same is true if the spouse has been working for the company for a long period of time. Therefore, prior to getting divorced, the business owner may benefit from easing the spouse out as soon as possible.

Prenuptial agreement may help with property division in divorce

Splitting marital assets can be tricky during a California divorce, particularly when two divorcing individuals cannot agree on how to proceed with this. Property division can be even more complicated if two people own a family ranch or farm. Prenuptial agreements can be a huge help in divorce situations where high-value assets are at stake.

A prenup is a legal contract that two people enter into before getting married; the agreement spells out what will happen to certain assets in the event that the two become divorced. A prenup is recommended when one individual has more assets and wishes to protect these assets during a marital dissolution. It is also wise to create an agreement when previously made promises must be honored -- for example, a commitment to an heir about owning a certain asset eventually.

Divorce settlement may have tax consequences

The emotional wounds of divorce can understandably be difficult to cope with, but the financial wounds can also be devastating. Unfortunately, these financial wounds sometimes develop simply because a person is not informed about how certain divorce settlements will affect them long-term. A couple of tips may help people going through the divorce process in California to avoid experiencing related money problems in the future, particularly when it comes to paying taxes.

One important consideration often overlooked during divorce is the tax consequences of a settlement. If one person agrees to get alimony each month, this income is taxable; this means that the recipient has to make quarterly estimated state and federal tax payments on this income. In addition, the paying ex can deduct this amount when filing his or her taxes.

Financial decisions during divorce can affect a person's future

Divorce can be an overwhelming time financially, as the decisions one makes during divorce proceedings can have long-term implications. Failure to analyze a potential divorce settlement from all angles may cause a person to hurt him or herself monetarily in the long run. A few tips, however, may help divorcing individuals in California safeguard their finances by allowing them to make educated decisions.

First, it is important to calculate how much it will cost to eventually sell or dispose of assets that are part of the marital settlement. For example, a person may be given a rental home and later decide to sell it. In this case, he or she can expect to pay capital gains taxes on the proceeds from the real estate transaction. General expenses related to the sale and real estate agent fees are also costs worth considering when selling this type of asset.

Spousal support often highly charged issue during divorce

One of the biggest areas of disagreement during a California divorce proceeding is spousal support. The person pursuing spousal support is naturally most concerned with obtaining the maximum amount of support possible, while the individual who will be responsible for providing support may be concerned about being taken advantage of. Determinations of spousal support are based on multiple factors.

Child support is determined based only on state guidelines. However, a spousal support determination is based on several factors, including both parties' expenses and incomes. Other factors include how long the two individuals were married as well as the parties' education, age and health. Awards of spousal support in California are typically generous to the recipient, although varying factors do commonly result in a low support award.

Collaborative divorce growing in popularity

The idea of splitting up with a spouse in California can be stressful financially and emotionally. However, when two divorcing parties are conflicted about how to approach property division and other major issues, the divorce can be even harder to get through. A collaborative divorce is one way to make a divorce proceeding easier for both parties.

The idea of collaborative divorce began during the 1990s, when family psychologists from California and lawyers began to explore a gentler way of getting divorced. They took into consideration that a divorce is more than just a legal matter: It is also a financial and an emotional one. The West Coast of the United States is one area of the nation where collaborative divorce is taking off exponentially.

Divorce process in California involves multiple steps

The divorce process can be complicated, especially when two parties cannot agree on how to divide significant assets, such as the family home or shared property. Proper legal guidance, however, can help you to navigate the divorce process in a way that will benefit you financially in the long term. Getting divorced involves several core steps in California.

First, if you are filing for divorce, your petition for divorce will be served on your spouse, known as the respondent. Your spouse then has 30 days to file his or her response. Once the response has been filed, both you and the other party can start to negotiate a settlement. This period also typically involves asking for temporary court orders on a variety of matters, such as spousal support, child support, visitation and child custody.

Divorce can have long-term financial implications

No matter what a person's income level is, getting divorced can be financially destructive. The divorce process can deal a huge blow to a person's finances, especially if he or she makes ill-informed decisions regarding important matters such as property division and asset distribution. A few tips can help people to make decisions that will lead to personally favorable results following a divorce in California.

First, it is necessary to create a detailed statement listing all of one's living expenses, assets and income. It is worth noting that the process may be particularly tricky for couples who own a family business or another type of major joint asset. Financial documents, such as those regarding retirement benefits and deferred compensation statements, are helpful to gather as well.

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