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Fullerton Family Law Blog

Using a business valuation to help navigate divorce

Business owners who chose to divorce face a number of very difficult decisions, especially in California. If you or someone you love owns a business and faces a divorce in the near future, it is very important to understand the threat that divorce poses to a business in order to make saving it a priority, if you hope to keep the business intact.

Businesses qualify as marital property in many instances of divorce, which can cause great headaches for California residents. Our state laws are not as flexible as those of most other states, and couples who choose to divorce in California must divide their marital property equally, meaning an equal division of the value of the couple's marital property. This makes it important for any business owner facing divorce to know exactly what the business is worth in order to avoid getting treated unfairly in the property division portion of the divorce process.

The surprising financial implications of divorce

Those who get divorced in California may find that the separation process comes with a variety of surprises. For instance, it may be difficult to fathom how much debt the household had. Common debts include mortgages, credit cards and student loans. It could also be difficult for some to come to the realization that they may not be able to keep the family home.

These insights were gathered by a survey of 1,785 women who were at varying stages of the divorce process. The overall cost of the divorce was a common worry of women surveyed regardless of their age. However, those who were over the age of 55 were less worried about retiring and more concerned about building up their investment portfolios. Of those surveyed, 23 percent between the ages of 18 to 54 had allowed their husbands to make the financial decisions for the household.

How child support can affect the co-parenting relationship

Parents who get a divorce might struggle with money issues. In fact, finances might be one of the main reasons a marriage ends. Despite this fact, it may be better for people's co-parenting relationship if they try to work out issues between themselves instead of going straight to a legal solution.

This issue arose for one man who was struggling to pay child support. He was also in the process of attempting to restructure debts as part of filing for bankruptcy. However, when he told his wife he would be unable to pay child support for a time, she did not wish to cooperate informally. Instead, she filed with the attorney general's office.

Getting ready for a divorce

Getting a divorce can affect several aspects of an individual's life, including their finances. However, there are certain steps that future exes in California can take to protect themselves financially and lessen the financial impact of a divorce.

A recent divorcee will likely have to deal with a drop in income as well as an increase in expenses. Creating a budget that takes into account one's projected monthly expenses for insurance, utilities, food and housing can help. It is also important that an ex is fully aware of all of the debt that they and their former spouse may owe. This can be done by obtaining copies of credit reports. Both parties of a marriage may be pursued for balances owed on any joint accounts, even if one spouse had no hand in incurring the debt.

Divorce can have long-term retirement impact

When people of any age choose to divorce in California, there can be a range of expected and unexpected financial consequences, especially ones related to retirement. These consequences can be particularly significant for people going through a "gray divorce," which is a term that refers to individuals aged 50 years and older ending their marriages. While the divorce rate for Americans as a whole has flattened and remained stable, the same cannot be said for people in this demographic group. Between 1990 and 2010, the divorce rate for people over 50 years old doubled.

The financial considerations can also be particularly important for people in this age group. For one thing, people who divorce over the age of 50 are closer to retirement, so all of their financial decisions are more directly tied to this period of their lives. In particular, retirement accounts are often the largest single asset divided during a divorce settlement. When people divorce closer to retirement, they have less time to rebuild their accounts as a single worker. However, according to a study by the Center for Retirement Research at Boston College, the effects of divorce on retirement are not limited to those who divorce close to when they stop working.

How to determine custody when only the mother is known

If a child is born in California without a father's name on his or her birth certificate, it may be unclear who has custody. As a general rule, custody will be determined in the state by looking at what is in the best interest of the child. However, other states may have different rules relating to who gets custody of a child born when the parents aren't married and no father is on the birth certificate.

For example, Michigan gives the birth mother initial custody of the child while Oklahoma gives the mother full custody right away. It is also possible that either parent could be given custody or that it will be split in such cases. Parents are encouraged to learn more about the law to better understand their rights and obligations after a child is born.

Dads need to stand up for their custodial rights in divorce

Some people believe the common divorce myth that judges always prefer giving custody to the mother in divorces. In reality, the gender of the parents should not factor into how the courts allocate parental rights and responsibilities. Both parents often get to play an active role in the life of their children and share parenting time and decision-making power.

For dads facing divorce with minor children in California, it's important to think about the children and protecting your relationship with them as you plan your approach to divorce. Familiarizing yourself with common custody practices and California laws can help you work toward a positive custody outcome in your divorce.

Divorce proceedings may limit financial, parental rights

California is one state that places a number of restrictions on parenting rights and finances when a couple files for divorce. The specifics of these laws vary by location, but in general, people should keep the guidelines below in mind and may want to consult an attorney for further information.

People should not sell any property or clean out bank accounts when a divorce is in progress. They may use funds for regular expenses, but anything above and beyond that might be subject to reimbursement. If one spouse provides medical insurance for the other, that spouse may be required to continue doing so for a certain period of time. These are all ways to keep spouses from retaliating against one another.

Gender-neutral spousal support laws surprise female breadwinners

When there's an income disparity among a married California couple, a divorce could lead to an alimony settlement. Although spousal support originally arose during a time when wives lacked the financial means to support themselves, modern laws look at spousal income instead of spousal gender. In 1979, the Supreme Court of the United States ruled that family law would view alimony decisions in a gender-neutral light. The result has been that ex-wives now sometimes pay ex-husbands alimony. Given the historical context, women often do not expect this financial burden when ending a marriage.

Although ex-husbands still pay the bulk of spousal support, a poll conducted by the American Academy of Matrimonial Lawyers revealed that 45 percent of respondents reported more cases of women paying spousal support over the last three years. In the past, courts established spousal support as a lifelong obligation, but it no longer has to be permanent.

The growing number of gray divorces

When people think about a divorced couple in California, they may envision young spouses married for a short time. While people in all demographics opt for divorce to end unhappy relationships, the number of Baby Boomers choosing to end their marriages has grown. The term "gray divorce" is often used to describe separations for spouses over the age of 50. While American divorce rates have stabilized across the country, the gray divorce rate has doubled since the mid-1990s. In fact, one-fourth of all divorces across the country happen over the age of 50.

There are a number of reasons for this phenomenon, including the growing number of healthy, active, older people. While in 1990, there were 63.5 million Americans over 50, there were 99 million in 2010. This number is expected to continue to grow as life expectancy continues to increase. The combination of these factors has made divorce a more relevant and likely choice for Boomers.

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