When couples in California divorce, the personal finances of each spouse are often thrown into turmoil. Asset division and commitments to spousal or child support are typical aspects of the divorce settlement process. However, it is also essential for each spouse to take responsibility for their financial health during the separation process.
Avoiding taxes and penalties when dividing retirement accounts
California couples who are getting a divorce may want to keep things as simple as possible, but if they are splitting a retirement account, they might need professional assistance to avoid having to pay taxes and penalties. For example, to split a 401(k), the couple will need a document known as a qualified domestic relations order to avoid these costs.
Developing a co-parenting plan after a violent marriage
For some separated couples in California and around the country, intimate partner violence is a common occurrence during marriage and after the separation. Interestingly, the type of violence that occurred has a significant impact on the ability for parents to make child custody arrangements and effectively co-parent their children following a separation.
Alimony deduction may be on the chopping block
One part of the proposed tax reform legislation that may impact some people in California is the proposal to do away with the alimony deduction. Under this proposal, people who are ordered to pay alimony to their ex-spouses would no longer be able to claim their payments as deductions on their taxes.
Being prepared can be essential to positive custody outcomes
California fathers involved in a divorce may be concerned about the impact of the end of their marriage on their children. Besides the regular concerns for a child's emotional development, many fathers worry that their bonds with their children will be strained or lessened following a divorce. However, ending a marriage does not need to mean reducing emotional involvement with one's children. Being prepared for the child custody process can help a father to maintain and improve the relationship with his kids.
How to make a divorce easier
California residents may feel uneasy about the financial ramifications of their divorce. However, there are ways to keep costs to a minimum when ending a marriage. For instance, it may be possible to seek out mediation instead of going to court. On average, the process costs between $5,000 and $9,000, which is less expensive than opting for litigation in most cases. Mediation may also be ideal because it focuses on an equitable split of marital property.
