Financial issues commonly associated with a divorce

On Behalf of The Law Offices of Ronda A. Middleton |

Some of the stress that can go along with ending a marriage in California concerns financial issues. Many separating couples fail to focus realistically on their financial needs and obligations during and after the divorce process. However, paying more attention to assets, liabilities, income and expenses could reduce the stress level of soon-to-be-former-spouses making the transition from joint responsibilities to individual ones.

Lower-income or non-working partners generally need to pay particular attention to available assets when getting a divorce since there is often a need to cover expenses during the transition period. Primary marital assets include cash on hand; checking, savings, and money-market accounts; stocks and bonds; mutual funds; and real estate investment trusts. Dividing and accessing some of these assets involves tax payments and, in some cases, penalties. With work-based retirement or pension plans, it can be helpful for a divorce agreement to state whether death benefits would go to the surviving ex-spouse.

If jointly owned real estate that may include the marital home and vacation properties is going to be sold, couples are often advised to consider who will be responsible for the expenses until the properties are sold and how any proceeds from the sale will be split. If one spouse keeps the marital home, he or she is usually responsible for the mortgage and other property-related debt. Credit card debt obligations will depend on factors such as whose name is on the cards and whether the other spouse had charging privileges. Tax payments may increase with a change in filing status, although the custodial parent may benefit from being able to claim dependents if children are involved.

If a lawyer helps someone secure alimony and/or child support payments, both the payer and recipient will not be able to claim these funds for tax purposes after 2018 due to tax law changes. Should a dispute arise over marital debts, asset division or creditor responsibilities, an attorney can help ex-spouses attempt to achieve a mutually agreeable arrangement. Legal steps can also be taken if there are issues with support payments.

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