Top Five Considerations Regarding Property Division And Divorce
We all know that the divorce process is not a pleasant emotional experience, but what many people do not consider is this: if you’re not careful, divorce can also be a disaster for your finances.
First things first: Before considering what financial mistakes you can make in a divorce – and how to avoid them – the most important thing going into a divorce in California is having the advice and representation of an Orange County divorce attorney.
Make sure that your divorce lawyer has substantial experience handling the division of property and assets on behalf of divorcing clients, and make sure that you discuss all of your legal options with your lawyer before you take any formal legal action.
WHAT FINANCIAL INFORMATION MUST BE DISCLOSED IN A DIVORCE?
In California, divorcing spouses must disclose their incomes, debts, and expenses to the courts. The partner who files for the divorce also must submit a disclosure declaration with the petition for divorce or within the following sixty days.
The other partner must then file a disclosure declaration with the response to the divorce petition or within the following sixty days.
The failure to disclose your assets fully, properties, income, or debts could result in even more legal trouble including court-ordered sanctions.
WHAT ARE THE IMPORTANT FINANCIAL CONSIDERATIONS IN A DIVORCE?
Below is the list of your five most important financial considerations going into a divorce.
It’s important to take each of these considerations into account when you file for divorce – or when you are served with divorce papers – and as the divorce process unfolds:
1. A divorce usually divides your business or businesses.
2. A divorce can hurt you financially for years to come.
3. A divorce can wreck your credit score.
4. Any real estate you own will be affected and could be divided.
5. For too many people, divorce is a ticket to poverty.
CONSIDERATION #1: WHAT CAN A DIVORCE DO TO YOUR BUSINESS?
California is a “community property” state. The courts will split jointly-owned marital properties “fifty-fifty” unless the spouses come to their own agreement about those properties.
If you are a business owner, you must take steps to protect that business. How can a business survive after losing half of its value?
Even if your business was started during your marriage, it doesn’t automatically mean that your business will be characterized as jointly-owned marital property.
A divorce lawyer may be able to help you keep your business by having it classified as personal property or by negotiating an arrangement with your spouse and your spouse’s attorney that allows you to keep one hundred percent of the business.
CONSIDERATION #2: CAN DIVORCE HURT YOUR FINANCES IN THE FUTURE?
It’s true. Two people living together can live less expensively than two individuals living alone. Far too many people think a divorce will put them in a better financial situation, but unforeseen bills and expenses can eat up your income and savings from the moment the divorce is finalized.
Start planning and budgeting as precisely as possible before your divorce becomes final.
Although most divorce lawyers will work with you and offer some type of payment plan, your legal fees are only one of many expenses you might encounter in a divorce. You may have to find a new residence. You may be ordered to pay alimony and/or child support.
There’s no way around it. At the end of the divorce process, a number of people will expect to be paid, and it may take months – or years – before you can fully recover from the financial impact of your divorce.
CONSIDERATION #3: CAN DIVORCE DAMAGE YOUR CREDIT SCORE?
Overlooking something as routine as a telephone bill can hurt your credit score, and that’s the kind of oversight that too many people make when they are involved in – and distracted by – the divorce process.
Because this is a community property state, creditors may hold both partners responsible for debts incurred by either partner during the marriage, and both remain responsible for the debts without regard to the terms and conditions of the divorce decree.
No creditor cares about a divorce judgment; they merely want to be paid by whoever can be held accountable for debt.
CONSIDERATION #4: HOW WILL A DIVORCE AFFECT YOUR REAL ESTATE?
California requires divorce courts to split marital properties “50-50” unless the spouses can reach another agreement. In many divorces, liquidating the home and the other properties is the best and simplest way to split them.
Many couples own a home, but some couples also own investment properties, commercial properties, investment properties, cabins, farmland, and vacation homes.
A fair and accurate division of jointly-owned properties can be exceedingly complicated. Property obtained as an inheritance or gift is not usually considered a joint asset. Both spouses want the maximum benefit from their properties, so that’s where a dispute can emerge.
Will a property be liquidated or retained by one partner in exchange for some other consideration? Market conditions, location, and the amount still owed are all factors that must be taken into account.
CONSIDERATION #5: WILL YOUR DIVORCE BE A TICKET TO POVERTY?
If you’re 50 – or older – you need to know that, according to researchers at Ohio’s Bowling Green State University, thirty percent of divorced women age 62 and older in the U.S. live at or under the federal poverty line.
You must be represented in a divorce by a reputable divorce attorney who has years of experience with the division of marital properties and assets – a divorce lawyer who will aggressively fight for your rights and protect your long-term financial interests.
Achieving a fair division of properties and assets in a California divorce can be a genuine challenge. Sometimes, for example, one partner has encumbered, transferred, concealed, or sold marital property without the other partner’s awareness or consent.
HOW CAN A DIVORCE ATTORNEY HELP?
Your divorce lawyer will work with financial and forensic experts to locate and assess the value of any hidden assets. The right lawyer will work hard to ensure that you receive what is rightfully yours when the divorce is final.
If you are divorcing or expecting to divorce in southern California, you must have an attorney who will protect your financial interests. Get the legal advice and representation you need from the very beginning of the divorce process. Nothing is more important than your future.