California residents who get a divorce should be prepared for the impact that the process can have on their finances, particularly those earmarked for their retirement years. According to the results of a study conducted by the Center for Retirement Research, households that have not experienced a divorce have a net financial wealth that is almost 30 percent more than that of similar households in which a divorce has occurred.
For those going through a divorce in California, the financial impact can be significant. The divorce itself could result in an individual losing a significant percentage of assets built up over his or her lifetime. Furthermore, it can be more expensive to live as a single person after a divorce than it was while married. However, by keeping and following a detailed budget, it can be easier for people to gain control over their finances.
Older California couples may be more vulnerable to divorce than they were in the past. The divorce rate for couples over 50 has doubled since the 1990s. However, for people who have not handled the marital finances, divorce may be particularly difficult as they might be learning about financial matters for the first time in their lives.
High asset divorce cases often have a dynamic that is usually not present in other marital dissolution cases. When a California couple with substantial financial holdings divorces, locating and understanding family finances is critical when a fair distribution of assets is the goal. If one spouse is responsible for keeping financial affairs in order, the other should get up to speed before filing for divorce.
For spouses in California who have spent years growing their retirement savings, divorce can pose a wide range of problems. While the financial aspects of divorce can be some of the most challenging for people of any age, when it comes to retirement funds, couples over 50 are at a particular disadvantage. Unlike younger couples with more years to come in the workplace, seniors have fewer opportunities to rebuild their investments following a divorce.
Couples in California who get a divorce should take extra precautions when dividing their retirement assets. The different types of retirement accounts are governed by specific rules that dictate exactly how they should be divided. If the correct procedure is not adhered to, divorcees may find themselves saddled with expensive penalties and tax bills. They may also end up giving their ex-spouse a larger percentage of their retirement funds than they intended.
California couples who are planning to get married might want to consider a prenuptial agreement. If they are already married, they may want to consider a postnuptial agreement. Both of these can help protect people financially in a divorce. While some people might think these types of agreements indicate a cynical approach to marriage, one financial planner points out that financial precautions are no different from safety precautions such as wearing a seat belt.
California residents who are going through a divorce may want to keep their children in mind as it moves along. Failing to shield them from the more painful aspects of the split could cause issues today and during adulthood. One way to resolve custody issues is to assume that each parent should have equal time with the children as a starting point for negotiations.
California couples who operate a business together and who are also getting divorced should consider how they plan to handle the business. Some may decide to divide it up, while others may opt to continue working together. Regardless what is decided, there are certain ways couples can address the issue while they are going through the divorce process.
A divorce can be a painful process in many ways, including emotionally and financially. California couples who are facing the end of their marriages should make sure to avoid certain common mistakes during the process.