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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.

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.

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.

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.

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.

Divorce could create challenges when funding college for kids

California couples going through a divorce need to plan for their financial lives going forward. Splitting one household into two often strains the resources of the parents, but it's still possible to save for the children's education. A divorce settlement should address college funds that the parents have already saved and, if possible, lay out a plan for continued saving and tuition payment in the future.

Communication can help lower the risk of divorce

Marriages in California tend to last longer when they are "gender equal" from the beginning. Ideally, couples will have a talk prior to getting married to reaffirm that each partner has equal power in the relationship. This means that each side is equally responsible for solving problems and responsible for making decisions within the relationship. By having this talk ahead of time, neither side will feel as if they can check out of the relationship.

The challenges of being a spouse and business owner

An entrepreneur tends to be a driven individual who is not afraid to take risks. Their spouses are more likely to be cautious and have a lower tolerance for risk. This helps to explain why the self-employed in California and throughout the country have a higher likelihood of getting divorced than the rest of the population. However, this is not the only reason why entrepreneurs could see their marriages end.

How a change in marital roles can lead to divorce

California couples who start their marriages with an equitable gender arrangement concerning work and career are more likely to stay married than those who go through a transition of roles. A Swedish study found that when a wife's career takes off after initially being largely responsible for child care and housework, divorce may be more likely.

Some spouses have little input in financial matters

California residents who are getting a divorce and have had little experience managing the marital finances might have to learn about these matters for the first time. A study by UBS Global Wealth Management found it is not unusual for women to leave financial and investing decisions to their husbands. With the divorce rate for older couples doubling since the 1990s, this means that some people could be headed into retirement with little financial experience.

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