A divorce in California can significantly alter a person’s financial circumstances. Therefore, prior to getting a divorce, it is important to get an inventory of the assets and liabilities a household may have. Cash, money in an investment account or the value of a retirement account are all considered to be assets. Generally speaking, they are eligible to be divided in a divorce settlement.
However, it is important to consider the tax treatment that an asset receives before agreeing to take it in a settlement. If an individual has to pay taxes on an asset in the future, it reduces its overall value. Couples who have a joint debt while married are both responsible for it after the marriage ends. This is because a contract with a creditor takes precedence over a divorce decree. Those who have credit cards should be sure to remove any rights that their former spouse may have to use it after the marriage ends.
When negotiating a divorce settlement, individuals should keep in mind that their expenses will likely go up while their income goes down. It can be a good idea to talk with a financial planner who can help a person understand what his or her needs will likely be after the divorce is official.
There are many different ways to divide marital property based on an individual’s earning potential and other factors relevant to a specific divorce. An attorney may review a person’s financial situation in an effort to negotiate a settlement that reflects the facts of a case. In some cases, an individual may be entitled to spousal support or a larger share of marital property. A custodial parent may also be entitled to additional resources to help meet the needs of a child.
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