Can An Orange County Divorce Destroy Your Retirement?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediators; California Divorce MediatorsWhen you have finally made up your mind to get a divorce, it is likely that you may not think too much about how it can have an impact on your retirement. However, it is an extremely valid matter to think about. Insured Retirement Institute conducted a study which observed that about 24 percent of the divorced couples who are born after World War II felt their condition will deteriorate after retirement because of the divorce. About 23 percent of the respondents mentioned that they must work for longer years to combat the hardship. Thus, it signifies that you need to take certain measures for protecting your retirement plans. Additionally, it is better to do so as quickly as possible. After all, the financial impact of a divorce can actually last for many decades. Check out some ways to ensure that your retirement dreams are on a proper track irrespective of your divorce.

Retirement and divorce

Although your divorce could be taking place many decades before your retirement date, it is likely that your retirement savings may be badly affected. First of all, a divorce would typically mean that your retirement funds could be split between your former spouse and you. As a result, you may find a substantial reduction in your retirement savings. Secondly, a divorce also signifies that soon it will be a single income household albeit temporarily. Thus, it is possible what you would be able to save quite less for your post-retirement years as compared to what you had initially anticipated or planned.

Divorce and your retirement savings

Local as well as state laws ascertain the manner in which your retirement savings will be split between your former spouse and you. In case you are residing in one of the community property states, any assets acquired by your spouse or you during the course of your marriage are regarded as joint property irrespective of who saved the money. California is also an example of a community property state along with other States like Washington, Texas, Arizona, Louisiana, Wisconsin, Idaho and New Mexico.

The most certain technique to ensure that your retirement savings are protected is to enter into a prenuptial agreement, which specifies which party will get the exact percentage of the saving in the accounts in the event of a marriage breakup. In case, you have not set up a prenup, you should negotiate with your former spouse and come up with an agreement that will benefit you both. You can hire one of the reputable Orange County divorce mediators at California Divorce Mediators to help you in the process.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Out-of-State Properties Held by a Couple in a California Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsProperty division is an important part of a divorce and many people are cautious about what happens to their properties after a divorce. Properties can be many types and are usually seen as separate or marital. Properties can include stocks, loans, shares and intangible materials. In recent years, the number of out-of-state marriages has risen and this includes individuals who belong to a different nationality. Now, these ‘other’ nationality individuals have properties which are not present in the U.S. soil. How are such properties treated once the couple gets divorced?

A divorce comes with many complications and most of them involve dividing properties and other finances. Even with an experienced lawyer, it can be tough for some to accept the final outcome of the divorce proceeding.

How are out-of-state properties treated in a California divorce?

California state laws allow family law judges to have jurisdiction over properties that are located outside the state of California, which are considered “quasi-community property.” They are  entitled to make decisions that directly involve out-of-state properties.

Properties that are acquired during a marriage are regarded as marital community property by the California law and must be divided equally after a divorce. Properties purchased during the marriage outside of California are generally treated  as quasi-community property and are liable for equal distribution.

Dealing with out-of-state properties can become complex and confusing. During such property divisions, the family law judge plays a vital role and much of the outcome depends on the judge. It is advisable for individuals going through divorce mediation to hire an Orange County divorce mediator lawyer who has experience in out-of-state property dealings and division.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Are you responsible for your spouse’s credit card debts after divorce?

Posted by: Gerald A. Maggio, Esq.

orange county divorce mediator; California Divorce MediatorsYou have divorced your partner but you may still have to take certain additional steps to ensure your financial stability. If you and your former spouse held joint credit cards before your divorce, ditching debts can be a difficult proposition. It should be understood that a credit card company is not bound by any kind of divorce decrees. Hence, they can be after you for debts that are jointly incurred in case you ex spouse fails to pay. That is precisely the reason why any Orange County divorce lawyer, credit counselor or financial planner may suggest you to end your marriage without any kind of joint debt. Now, this can be done by opting to pay off your joint cards together. Alternatively, the debt in incurred on your joint credit card can be split and then transferred to the card in the name of each partner. The aim for this step is to ensure that all your liabilities are removed for the debts incurred by your partner. Make sure to inventory the wallet you hold and ensure the cancellation of all the joint credit cards during your divorce process.

It can be extremely painful to go through the consequences of stepping into your new life with previous jointly held debts. If your former spouse refuses to pay whatever he or she was supposed to pay or files for bankruptcy, the creditors may be after you to realize the entire debt amount along with penalties and interests. As a precautionary step in this direction, you may include additional provisions into your divorce agreement so that your former spouse has to pay up. However, knocking the doors of the court can be both time-consuming and costly.

Here are the basics

Typically, any debt that is incurred during a marriage is the combined responsibility of both the parties provided they have been co-signers on those credit cards. On the other hand, in case the credit card is in the name of only one spouse and the other partner has been named as an additional cardholder, the latter cannot be held responsible. After the partners have got legally separated, any debt that has been incurred on a credit card is the sole liability of that spouse who made their purchases using the card,

What are the options before you?

You have various kinds of options to handle debts on a joint credit card. The one that you will employ depends on the nature of relationship you share with your ex spouse. A sure shot way to make sure that you don’t have to pay for those joint debts is to cancel all your joint cards. A second option for you could be to pay off all jointly incurred liabilities using your joint savings or joint assets such as a jointly owned property. In case you are not doing well financially, you can consult a good Orange County divorce attorney to assist you in figuring out the various options.

To learn more about the divorce process in California and how mediation can help, please clink on this link to visit our page, What is Divorce Mediation

Issues When Dealing With Commingled Funds In A Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in Orange County; California Divorce MediatorsPrior to getting married, the property owned by you is regarded by the court as your “separate property”. This dignified that such a property is owned only by you and not by your spouse. For example, if you have $15,000 in your bank account and own a property while getting married, you are bringing your separate property in the marriage. Such a property remains your separate property if it is not “commingled” with your spouse’s separate property brought into your married life. For instance, in case you get married and both of you stay in the same house that is owned by you prior to the marriage. However, if the incomes of both you and your spouse are being contributed toward paying the mortgage, such a house is automatically counted as a marital property. In other words, it becomes a property your spouse may be interested in,provided both of you decide to divorce in the future.

The job of splitting property as well as other marital assets could be a tough one and full of conflicts especially for those couples where there has been a commingling of funds in the course of the marriage.

While negotiations continue for divorce settlement, determining which property should go to whom while depend on the degree of the occurrence of commingling of funds during that marriage as well as the complexity of transactions like home or automobile purchases, a big and crucial role is played by commingled funds during a divorce.

In case you fail to keep a thorough accounting of what is being done with your assets and properties during your marriage, it is not easy to prove that the purchase of that property was not done with commingled funds. The following are some of the tips for all those spouses who do not want to commingle during their marriage.

Enter into a prenuptial agreement

It makes sense to have your prenuptial agreement in place, which will clearly state, which properties will be counted as marital properties and which will be not in the event of a divorce.

Avoid paying off marital debt using your separate property

You should not use your separate property for paying off any marital debt. For instance, if you receive a hefty amount of money from your parents as a gift, the money should be used towards paying off a credit card debt or your home debt. You need to note that when funds benefit a marriage, they become marital property.

You should have separate bank accounts

Funds should only be deposited in a joint account when you want to count it as marital funds. When you deposit funds in your separate and individual bank account, it is regarded as your separate property.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Tips for Splitting Marital Property During a Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in orange countyBefore understanding how your marital pretty should be split during a divorce, it is important to recognize what a marital property means. Any property owned by you or your spouse during the course of your marriage is counted as a marital property. The properties you owned prior to getting married or any property that you inherit while being married is not considered as your marital property. Some spouses are under the impression that they can escape the process of splitting their marital assets; however, a divorce lawyer is a smart professional. Hunting for hidden assets is one of their top priorities when they fight cases for their clients. If you do not want to get penalized by the court for tucking your marital asset, later on, it is better to disclose such properties in the beginning. Check out the following tips for splitting your marital properties while your divorce proceeding is pending.

Take help of a mediator

It is a good decision that you hire a mediator who will help you by working on sticky issues, which may pop up while the marital properties are being split. While it is a requirement in some States to have mediation while the divorce process is on, other States do not have such a requirement. It is better to save your money and time by hiring a reputable mediator who will help you in this process prior to the involvement of the courts.

Stop fighting on small issues

When you let emotions rule over your good sense, your objectives may not be fulfilled. For instance, there could be a portrait in your bedroom, which you are emotionally attached to and want to take it with you by any means and you do not agree with your spouse that he or she should have it. In case you fail to arrive at an amicable settlement on such trivial issues, your judge may not care about your emotional attachment to certain objects. A court’s job is to find out the assets acquired by you during your marriage, As such, it will instruct the property to be split according to the laws of your state and not according to what you want. To put it simply, it is you and not the judge who has made an emotional and financial investment in your marital property. A judge cannot and is not in a position to order for the split of marital properties in a manner that will satisfy both the parties involved. If the couples can mutually sort out those issues, then only both of them can be satisfied. Any attempt made to hide marital assets is a legal offense, which means you are violating the law.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation 

Posted on Monday, September 18th, 2017. Filed under California divorce, California Family Law, Division of Property, Division of retirement plans, Divorce, Divorce & Debts, Divorce & Division of Property, Divorce & Family Businesses, Divorce advice, Divorce court proceedings, Divorce Mediation, Family Law, Frequently asked questions, Orange County divorce, Orange County divorce mediation, Orange County divorce mediators.
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How Is Legal Separation Different From A Divorce?

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorney Orange County; California Divorce MediatorsLegal separation is the formal process of confirming an actual separation of the parties, as opposed to filing for divorce.  Parties that chose legal separation do so for religious reasons, do not believe in divorce, or have concerns about medical insurance coverage, among other reasons.  If the parties proceed all the way to a final judgment in a legal separation case, they can obtain the same orders that they would have in a divorce case.  The biggest difference is that in the end, the parties are technically still married after a legal separation case and cannot get legally remarried.

Agreement for separation

An agreement on separation includes terms that are quite similar to those if the concerned couple was getting a divorce. This means there will be a distribution of their marital property, agreement on child visitation and custody if applicable. Not only this, the couple opting for a legal separation will also have to come to a decision on dividing any debts that were incurred by them after they got married.

Ideally, the above-mentioned terms should be binding in case the couple wants to get divorced. Moreover, both parties should hire their individual attorneys for negotiating all the details of the agreement on their legal separation. In case the spouses eventually make up their mind to go one step ahead and file for a divorce, it has been observed that the judge usually keeps the same terms as both the parties agreed to them earlier.

Differences between a legal separation and a divorce

Check out some of the following key differences between a divorce and a legal separation.

Name

While the spouse continues with the legal married name in the case of a separation, a wife may revert back to her maiden name after the divorce comes throughout the divorce be.

Child support

The conditions related to child support are ascertained when the legal separation takes place. When a couple decides to go for a divorce after being legally separated, ideally, the same terms are followed that were mentioned in the document for legal separation.

Marital status

A couple is still married even though there is a legal separation going on. But when the divorce is finalized, the marriage ends.

Child visits

Visitation rights of the child are decided when the legal separation takes place. If a divorce comes through after the legal separation, most of the times, the same terms are followed as mentioned in the document of their legal separation.

Alimony

The terms for alimony are ascertained during the legal separation. The conditions are typically kept same if the divorce gets finalized in the future.

Split of marital property

The couple agrees to the terms while going for a legal separation. When they do decide to finally divorce, the sane conditions that are mentioned in the document for legal separation are followed.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Division of Pension Plans In A Divorce

Posted by: Gerald A. Maggio, Esq.

orange county divorce mediation; California Divorce MediatorsPension plans are usually divided in one of only two ways: “cash out” or by Qualified Domestic Relations orders (QDROs).  The latter is the most common way through which pension plans get handled. Under this scheme, it is ordered by the court that at the time of retirement of the employed spouse, the other one will be the recipient of a percentage of every pension check. This percentage is arrived at by dividing years when the spouses spent together in their once home as wife and husband by total number of all years when the spouse who is employed had participated in pension plan. The result amount of that division is community property percentage of pension plan. To give an example, if a husband has put in 20 years of his monetary contributions to a pension plan, and 10 of the coinciding years he lived with the wife, the share of the pension plan will be about 50 percent. In such a case, the wife will have 25 percent of the pension checks of the husband. 

Money plan 

As per reservation of jurisdiction, the spouse considered a non-employee could elect to receive her or his share of the pension benefits of the employee spouse at earliest time when the employed spouse will retire. It means that in the case of the employed spouse electing not to retire at earliest opportunity, that spouse must pay the non-employed spouse what the latter would have got in case the employed spouse would have retired. To give an example, if the husband becomes eligible to retire at 55, but elects not to retire in that age, his ex-wife could demand that he provides her the amount of money she would have received if he retired during that age. It is to be mentioned that in case the wife selects this option, she will not receive any increases due to higher cost of living after that date.

QDRO

The 1984 made Federal Retirement Equity Act created “Qualified Domestic Relations Order”. In this system, the court gives orders regarding the retirement plan of the spouse. The Federal law states that the employer must comply with the order terms.  The QDRO preparation is complicated and time consuming. It is also expensive. However, the QDRO is an essential step in dissolution process. A number of companies have been created for the sole aim of making them.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

What Happens If You Fail To Disclose All Your Assets In A Divorce?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation lawyers; California Divorce MediatorsWhile you might find it tempting to conceal a certain part of your assets from your divorcing spouse, it is not really a good idea when it comes to legal implications of the same. Similarly, if in case you suspect that your partner is not providing complete disclosure of his or her assets for the purpose of distribution in a divorce, you must understand that the state laws of California stipulate stringent legal actions against such an act. When it comes to rectifying the omission of an asset disclosure, there are typically two aspects that are taken into consideration: the time of discovery and whether the omission was intentional or a mistake.

Asset omission through a mistake and discovered after the final court order

In case a spouse has inadvertently failed to make a complete disclosure of his/her assets, and it is discovered after the final judgment has been announced, the court has the right to alter the order and divide the asset as per the stipulates of the Californian State laws.

Intentional omission discovered before the final court order

Speaking of the obvious, an intentional concealment of an asset by a divorcing party is treated quite differently as in the case where the omission was an honest mistake. According to the Californian law, both the divorcing parties have the ‘fiduciary duty’ of serving a declaration of disclosure that contains all the information about their assets and debts to each other, failing which the guilty party will be faced with stringent corrective actions from the court of law. In some cases, an incomplete disclosure of an asset may also lead to the court ordering 100% ownership of the said asset to the other party involved.

Intentional omission discovered after the final court order

In the event that you discover an intentional un-disclosure of your spouse’s assets after the court has announced the judgment, the Californian law offers you the right to set aside the court order as ‘based on fraud’. In addition to this, you also have the right to file a tort action or the infringement of your rights, against your guilty partner.

The bottom line is that it is prudent to follow the laws of your state and provide proper disclosures of your assets and liabilities, in order to facilitate smooth and trouble free divorce proceedings. It is always advisable to be as transparent as possible in your case.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Can The Husband Sell The Marital House?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsThe answer to whether a divorcing guy can sell his house or not is not quite an easy one. This is because the reply depends on factors like what decisions were made by the judge in a particular case and the conditions of a divorce agreement.

Divorce and marital home

At the time of divorce, the concerned couple has to take a call on the entire marital property and that includes the house the spouses shared.  Though it will be simpler if the house is sold outright prior to finalizing the divorce and splitting the sales proceeds, the solution may not be feasible in all cases.

There are some scenarios when a spouse purchases the interests of the other party. Alternatively, a spouse may transfer some other asset to her or him as a part of settling the property issue. There are other ways of dealing with the marital house too. If children are there in a marriage, both sides may agree that the parent who got the kids’ custody can stay at their house for a specific time period. The contract could also specify that the marital home will be sold whenever the younger kid will turn eighteen and the sales proceeds will be distributed between the ex-couples at that time.

The ex-spouses may have you also agree to an arrangement to ensure that the house is in a good condition during that time period. Moreover, the non-custodial parent could be directed to provide for the maintenance of the house so that both the former spouses can get the highest amount of money when the marital house gets sold.

Chances of a divorced man selling his house

When a man is already divorced and has outright ownership of a house, he does not have any kind of obligation towards his ex-spouse and can sell it while keeping the money from the sales for himself. The guy can also purchase another pretty if he desires to or invests the funds. He can also use the money for any purpose as per his discretion.

In case both the spouses were the joint owners of the house during their marriage, the man has to distribute the sales proceeds with his ex-wife according to the court’s orders or as per any other agreement.

In case the former spouses are ordered to keep the house as it is for a reasonable time prior to its selling, he needs to get in touch with an attorney and find out if he needs to send an application to the court to permit him to sell the home by reversing the original order. In such cases, the court will consider the man’s explanations for the need to sell the house and eventually determine whether he can do so or not.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Dividing Retirement Plans During A Late-Life Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys Orange County; California Divorce MediatorsLate life divorces are increasing in number as more and more people live longer.  A recent study has revealed that one in every four divorces are late-life divorces. Like any divorce, a late-life divorce can be hard hitting on the financial front. But a late-life divorce could ruin people with the best retirement plans.

The cost of living separately is much higher than the cost of living together as the number of accommodations and facilities double. In simpler words, an elderly couple that have been together for a long period of time would have likely planned their retirement together. When a divorce is filed, one of the spouses will have to move out and more often than not, have to plan separate occasions to meet other family members. All of this, could drive expenses up by 30 or 40 percent.

Anyone involved in a divorce will tell you that it is one of the most expensive scenarios to deal with. For people aged 50 or over, this could spell the destruction of their financial plan altogether. A financial planner or advisor needs to be consulted in order to understand the circumstances. This is especially true, if one of the spouses handled the finances throughout the marriage.

In some cases, retirement benefits might be more valuable than all of the couple’s other community property combined. This might form conflict on the division of the benefits. Some forms of benefits such as social security, military compensation, and workers’ compensation for disability are not considered to be community property and will remain with the individual after divorce.

Retirement Allocations

In California, retirement is considered to be community property that can be divided amongst both spouses. However, retirement divisions are handled outside of the usual divorce proceedings. A Qualified Domestic Relations Order (QDRO) outlines the division of the retirement funds.  It is usually filed after the divorce judgment. The QDRO is needed to divide 401k, 403b, profit-sharing plans, tax sheltered annuities and other aspects.

During divorce proceedings, the QDRO calls for the equal division of retirement assets. However, mediation and negotiation can help spouses agree on different rates or division percentages. The QDRO  is the final indicator of division of retirement benefits. Divorce attorneys often hire QDRO specialists to help segregation and division. Once both parties have agreed on the division of benefits, a QDRO is filed.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation