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Fullerton Family Law Blog

A high-asset divorce can be complicated

Of all the various legal issues couples must deal with as they move forward to end their marriages, it cannot be said that those with significant assets face any additional steps. However, the complexity of some of those steps can be dramatically different. Property division can be a sticking point even for an average California household with a home, cars, retirement and savings accounts, but the greater the dollar value of a couples' wealth becomes, the harder it is to craft a mutually agreed upon resolution.

For instance, one can only imagine how complicated a divorce involving the richest person in the world would be. However, soon that will be known as media sources report that Jeff Bezos, founder of Amazon, and his wife of 25 years announced their impending divorce. Over $130 billion dollars is estimated to be the subject of the property division.

Will you need to pay spousal support for your stay-at-home ex?

Divorce is a very stressful time, especially if you didn't know that your spouse intended to file. You may feel angry or betrayed. It is very common to have strong feelings about the potential financial impact of a divorce. Not only will you have to split your existing assets, but you may find yourself ordered to pay spousal support for your ex.

As someone who has been a wage-earner throughout your adult life, you likely resent the idea that you should have to pay part of your hard-earned wages toward a spouse who has not maintained a career outside the home.

What to know about getting divorced

The start of a new year may have California residents and others thinking of making changes in their lives. One of these changes may include ending a marriage. January is one of the most popular months for a spouse to either get or seek a divorce. However, it might not be the best idea to rush into getting a divorce. This may be especially true for parents.

An exception can be made for someone who is looking to escape a marriage that puts themselves or their children in immediate danger. Assuming that this is not the case, it can be worth going to counseling or taking other steps to see if the relationship can be salvaged. If it can't, an individual can file for divorce knowing that the marriage simply wasn't meant to last. At a minimum, a spouse should meet with an attorney prior to serving divorce papers. This can give that person time to learn more regarding the separation process and how it's likely to play out in a given case.

The QDRO and other rules about splitting 401(k)s in divorce

People in California who are getting a divorce might need to divide a 401(k), but it is essential to avoid mistakes that could be costly. To split a 401(k) or a pension plan, a document called a qualified domestic relations order is necessary.

The QDRO must reflect the parameters of the divorce agreement, but it must also be approved by the plan administrator. The distribution may be rolled into an IRA or a person may take the payout, but the QDRO must specify how it will be received. In the latter instance, the person will pay income tax on the distribution.

The importance of canceling joint credit cards in divorce

Californians who are getting divorced may need to figure out how to handle joint credit cards. Even if the divorce court orders one spouse to pay his or her portion of the credit card debts, both exes could still have problems with the collectors. This is because credit card companies do not have to follow the orders of the family court.

If one ex-spouse fails to pay his or her part of the joint credit card debt, the creditors could go after both exes for repayment. Even if the other spouse goes to court to seek an indemnity order, the credit score may already be harmed.

Options for addressing the marital home after divorce

The family home generally represents the most significant asset for many married couples in California. When spouses decide to divorce, their settlement must detail who gets the house or if the property will be sold and the proceeds divided. Emotional factors, such as attachment to a location or a desire to limit disruption for children, often complicate decisions about the marital home.

In most cases, the easiest approach requires the sale of the property. The sale frees both ex-spouses from future financial burdens related to the property and allows them to go their separate ways. Divorcing couples also have the option of delaying the home's sale. Their divorce settlement will need to specify the terms that will trigger the future listing of the property for sale. The parties may want to wait for their local real estate market to improve so that they get a better price. A delay of one or two years might also ease the transition for any children involved.

Unmarried dads in California can still have custody rights

There is a common misconception that custody rights innately favor the mother in most cases. However, the law regarding custody does not have a gender bias. It is simply the practical experience of having a child that often results in a mother receiving custody by default. When parents are not married, the mother will be the one who gives birth to the child, and, therefore, the mother is the likely one who will take the child home from the hospital.

Sometimes, unmarried mothers are eager to name the father of their child. Doing so helps them connect with child support and ensures that their child grows up knowing who their father is. Other times, the mother may not want to name you as the father.

The importance of financial planning before the wedding

Before couples in California get married, they may want to discuss their finances and their attitudes about money. Finances can be a source of significant strain in a marriage. In a 2017 study, Experian found that over 50 percent of couples said money issues were somewhat of a factor in their divorce while another 20 percent said finances were a significant issue. In addition, one-quarter of couples said the credit score of a spouse was a problem.

Prenuptial agreements are reportedly on the rise among millennials, but only a small percentage of couples have one. Prenups are not just about making contingency plans in case of divorce. They also provide the opportunity for couples to have honest conversations about money. With or without a prenup, this type of conversation is necessary. Couples need to be upfront with one another about debt, credit scores and any child or spousal support obligations from a previous marriage.

The benefits of parallel parenting after a divorce

When parents in California are going through a divorce, they might struggle to communicate and cooperate. Raising children can be difficult in the midst of a high-conflict divorce. However, in most cases, parents either share custody or one has visitation rights. Therefore, these parents need to find a way to make the situation work. Studies show that witnessing parental conflict is among the biggest stressors for children during divorce. Parallel parenting is a solution that allows children to spend time with both households but reduces the need for exes to communicate directly with one another.

To avoid conflict, parallel parents need a detailed plan. They also need a way to get information to each other. Some parents may decide to use email for communication or to share calendars. While traditional co-parents work to respect and support their children's relationship with both households, parallel parents work to stay out of the way. By letting go of control, they further reduce the possibility of conflict.

What to do when one parent puts the child in danger

Some parents in California who are going through a divorce may be worried about the child's safety with the other parent. This was the case for one man who was worried about how much his wife drank and the possibility that she might drink and drive. He was also concerned because he said he had been the main caregiver for the child although the mother wanted to delay the divorce so that she could collect evidence of her own caregiving.

A parent who is worried about a child's safety can try to get custody of the child. Unfortunately, this could be difficult if there is not an arrest record or similar evidence against the other parent. The parent seeking custody might try to get neighbors or others to testify as witnesses. Alcohol abuse and its danger to a child can be difficult to prove. In one case, a court found that although one man drank regularly, there was no evidence that he did so when the child was in his care.

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