When a couple ends their marriage in California, both partners could suffer financial repercussions. However, a person can make a budget, plan for divorce costs and take other steps to try to manage finances during and after the divorce.
Making sure that property is divided fairly is one step. It can be important to establish which assets and debts were brought into the marriage and which were acquired after the marriage. Debt should be paid off before the divorce is final. If this is not possible, the couple should address how it will be paid in the divorce agreement. If one spouse decides to keep the home, they should be able to afford the costs associated with it. Some people may find the house is too big and keeping it is too expensive.
There are other steps to take when the divorce is final. Any joint accounts should be closed and new individual accounts opened if that has not been done already. Ex-spouses might also need to update powers of attorney, beneficiary designations, wills and any other estate planning documents. Contingency planning could include a life insurance policy on a support-paying spouse.
The divorce process can be emotional, and this can make it difficult to take all the practical steps needed. An attorney could help a client make a plan and move ahead. Some elements of property division may be complex. For example, if neither partner wants to keep the home, the couple may decide to sell it. However, it might need renovations, or the market may be poor for selling. They may then need to decide who will pay for expenses until the home is sold.