Does Your Divorce Affect Your Vehicle Insurance?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation lawyers; California Divorce MediatorsAny couple that files for their divorce has to also deal with the proper distribution of their marital assets. But, there is something that many people do not consider. They often overlook the impact of the divorce on their car insurance. Divorce can affect various aspects of the couples’ car insurance including changes in rates to buy a new insurance policy.

Relationship between premium and marital status

The premium for your car insurance policy is the amount that should be paid by you to insure your car against damages including caused due to accidents. However, it is important to note that the premium rate is not same for everybody. In other words, there could be different rates for different people, state to state and even city to city. Insurers will take into account various factors to determine the premiums for the policyholders. But, it is true that your marital status may affect the rate of premiums directly as well as indirectly.

Single versus married

As per a study made by the Insurance Quotes, married people usually need to pay lower premiums as compared to their single counterparts. For instance, a married man who is thirty-five years old may have to pay as much as 3 percent less in some States for their auto insurance as compared to a single man, who is of the same age. On the other hand, a 35-year-old single woman has to pay 2.75 percent more than her married counterpart of the same age. The reason for this is it is statistically proved that married people’s involvement in auto accidents are fewer than in married people.

Indirect effects of divorce on car insurance

The car insurance premiums can be indirectly affected by a divorce too. For instance, in many States, men have to pay higher rates of premiums as compared to women. So when a woman is single once again after her divorce, her premium may lower after the divorce comes through.

The place where you start living after your divorce got finalized may also alter your premium. Premium rates for car insurance are more for all those people who live in urban areas as compared to the suburbs. Moreover, premium rates may not be same for two different suburbs.

There could be also an increase in premium rates since the multi-driver discounts or discounts for purchasing more than one policies will no longer be available to you after your divorce. Such policies include both homeowners’ policies and car insurance policies.

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

Understanding Divorce & Innocent Joint Tax Filer Relief

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation attorneys; California Divorce MediatorsBoth you and your registered domestic partner or spouse assume tax paying responsibility when you file California joint tax return. Responsibility is also assumed for applicable interest and penalties. If you meet a few specific legal requirements, you could qualify for relief from payment of part or all of tax liability.

Traditional Innocent Joint Filer Relief

It is possible to qualify for relief from the assessed additional tax, interest and penalties when you satisfy the following conditions like filing joint tax return. You can enjoy additional relief also when your RDP or spouse’s error is caused by additional tax. Tax breaks can also be had if at the time of signing joint tax return, information was not available to you or you were unaware of those items which resulted in an additional tax. Money can be saved also if all circumstances and facts are taken into account and it would be not fair to hold you totally liable for tax liability. Other conditions of tax breaks include that you have submitted a completed “Request for Innocent Joint Filer Relief” or FTB 705, to the government earlier than two years post date of starting involuntary collection activities from you.

Relief through Separate Allocation of Liability

It is determined, under this kind of relief, which RDP or spouse is going to be liable for assessed additional interest, penalties and tax. In case you meet all the requirements, we assign the liability for the additional tax to liable RDP/spouse. This is treated as if taxpayers had filed two separate tax returns. This kind of relief can be had if the couple files joint tax return. It is important that both the spouses must meet all conditions. These include the case if you divorced and also legally separated from your RDP or spouse or terminated the registered domestic partnership. This is also applicable if the couple lived apart from each other for a period of 12 months before making the relief request.

Relief can also be had when additional tax assessed can be attributed in full or part to the RDP or spouse. It can also be enjoyed if the couple has no information of items which created this tax liability at the time you signed the joint tax return. Other causes include submitting the competed “Request for Innocent Joint Filer Relief” to the authorities earlier than two years post date of starting involuntary collection activities from you.

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

How to Save Money After Your Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation orange county; California Divorce MediatorsWhile you are still trying to come out of the ramifications of your divorce, having a proper strategy for saving and budgeting may not be a top priority for you. However, the truth is that henceforth you alone will be responsible for protecting your future as far as the financial matters are concerned. Additionally, when you have some savings, you can enjoy a safety net for any type of unexpected expenses, which may come up frequently.

Start saving money once you are single again

The way marriage brings a big transformation in your life, there is a similar impact after your marriage is dissolved as well. It will take some time and adjustments on your part to start staying alone after living together as a couple for many years. The way you start managing your savings and finances after your divorce will have a big role in the coming months resulting in either financial security or days of struggle and poverty. If you act sensibly, you will not be short of funds, else you may experience a shortage of funds in the future years. Check out these easy tips that can help you to get started.

You should pay yourself at the earliest

While it is not as easy as it appears, it is crucial to develop a saving habit as soon as possible. It is tough to save when one has limited resources but not an impossible thing to do. Try to put aside a fixed sum of money in your savings account every time you receive your payment. It can create a safety cushion, which you can use in times of emergency.

Think and execute a saving strategy

It is not mandatory for you to be a financial expert in order to develop your saving strategy so that you can build up a nest egg for yourself.  However, you need to understand and know the fundamentals. Check with your human resource department what kind of retirement plans are provided by your company to make sure that you do not miss out on a great chance to save for your retirement.

Self-education is of prime importance

It has been often observed that in a majority of households, cutting across geographical boundaries, one spouse has got a greater sense of managing finances for the family like bill paying and budgeting. Were you that person who was taking care of the finance part while being married? In case the answer is affirmative, you may already have a strong grip over how to run the household. But, in case, you were not that person, you need to now focus on how to develop as well as follow the budget.

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

Why Material Disclosure of Assets is Significant in Divorce Cases

Posted by: Gerald A. Maggio, Esq.

divorce mediators in Orange County; California Divorce MediatorsDivorcing parties have a natural tendency to conceal their material assets from their spouse and understate their income. Lawyers across California have faced this problem for many years now. However, disclosure of material assets, facts, income and information in a divorce case has great significance in financial settlements between the divorcing parties. The divorce law in California makes it mandatory for both parties.

The mandate to disclose financial and material information is based on the state’s policy, which aims to achieve the following:

  1. To preserve and protect the community assets and liabilities that are existing at the date of separation to avoid squandering of the assets before actual distribution.
  2. To ensure that sufficient and fair spousal and child support is provided.
  3. To achieve a proper division of community assets and liabilities on the legal separation of parties.

In order to achieve the aforementioned objectives, the family code under California divorce law requires accurate and full disclosure of all assets and liabilities in which the separating parties have interest, regardless of the property being characterized as either separate or community. The separating parties are also required to make a full disclosure of all income and expenses.

The divorcing parties also have a persisting duty to update and augment the disclosures. The purpose of this is to ensure that each party will make the final settlement with sufficient and full knowledge of all relevant facts underlying the divorce case. The separating parties make the disclosure by serving each other with a preliminary declaration and final declaration of disclosure.

The preliminary declaration should be served within 60 days of serving the divorce or separation petition. The declaration is not filed with the court but served only to each other. The declaration lays down the identity of all assets and liabilities, the share of the declaring person(s) in the asset or liability and the characterization of such assets and liabilities.

The final declaration of disclosure should be served at least 45 days before the first trial date. The final declaration includes all material facts and information regarding the characterization, valuation, amount, income and expenses of each party entering into the divorce case. Failure to comply with the disclosure requirements would be considered a breach of fiduciary obligation of the party. The court may sanction the party committing the breach by awarding sanctions and attorney’s fees to the other spouse as observed by section 271 under the California Family Code.

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

Financial Tips for Divorced Women

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediators; California Divorce MediatorsAre you a divorced woman and are a bit overwhelmed by the amount if bills appear to simply pile up? If that is so, you definitely need some kind of financial guidance. After your divorce, your standard of living changes. So, finding a proper financial assistance, paying bills and organizing are some of the prime tasks you need to embark upon.

Why divorced women need financial help

According to an estimate, about 40 percent of the divorced women have a new standard of living after their divorce comes through. Though in many cases the alimony provided by an ex-spouse could pay for living expenses, that still may not be adequate to provide all the expenses and lifestyle that they were used to while being married. The alimony they get after the divorce may not be adequate to take care of all the bills.

Moreover, the condition is even worse for some divorced women who do not even know how to pay their bills since they did not do these tasks while married. So, they are at a loss where and how to start from as far as the question of paying the bills and organizing their financial things pop up. In such scenarios, these women require some handy tips for paying their bills so that they are on a right track.

Tips for divorced women to pay their bills

  • Collect all the bills that you have received in one place for each month.
  • Now separate these bills on the basis of their due dates or depending on the frequency of their payment, For instance, if you have to pay twice a month for some bills, you can make two different piles. One pile to be paid at the month’s beginning and the second pile to be paid at the end of the month.
  • Creating a monthly budget is very important so that you know how much monthly income is left with you after making the bill payments. This will also help you to make timely payment for your credit cards. So, paying the bills should be the first priority. You can then use the remaining money for the rest of the expenses.
  • Put all the checks for your bills in separate bill payments to be prepared for the month. In case you make your bill payments through banks, set up your payment in advance to avoid last moment tension.
  • After you get paid, mail your first lot of bill envelopes that are due for the month’s first half. You can repeat the same procedure when you receive your second paycheck.

Are you facing difficulty with writing checks? Do not worry as you can get online instructions to fill them. In case you are interested in making online bill payments, you should get in touch with your bank and find out whether they provide such services or not. If they are offering the service, their representative would definitely help you with the entire process. There are some companies that accept payments on their corporate websites or over the phones. You can get to know the details from the bills sent to you or by calling the payment center of the company.

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

Top 5 Reasons for Couples Getting Divorced

Posted by: Gerald A. Maggio, Esq.

Divorce mediators Orange County; California Divorce MediatorsMarriage is not an easy relationship. There are several cases when couples started their married life with the best intentions but ended up getting divorced. There could be various reasons for which couples get divorced. Here are some of the most common reasons for couples ending up being in divorce court.

Extra-marital affairs or adultery

According to a report published by AARP, even today, adultery plays a big role in people filing for divorce. But, reports also claim that there are several reasons that lead to a spouse getting into an extra-marital affair such as unequal sexual urges, getting distant, having different interests, resentment and fury.

Gain in weight or obesity

Though it may appear as a surprising reason, unusual weight gain by one of the spouses is also known to be a major reason why couples get divorced. A survey conducted by Men’s Health magazine reported that when one of the spouses gains a lot of weight, it can come in the way of their marital bliss. If your spouse does not attract or get turned on to your body, there could be problems like resentment and rejection, which can be marriage-threatening issues.

Monetary issues

According to a report published by the American Journal of Sociology, when a husband is unemployed, it can be a major criterion for divorce. In other words, lack of or insufficient money can cause big problems in a marriage, often leading to a divorce. If a married couple faces financial on strainers, there could be a lot of stress. This can further lead to a lack of proper communication and constant arguing. There are many couples who have different views on the others’ spending habits. Relationships may undergo lots of stress where one controls or has the finances, which often end up in a divorce.

Lack of proper communication

Often you will hear people saying that proper communication is the key to a successful marriage. Many relationship coaches opine that negative communication or lack of communication may diminish feelings of romance and love between couples. When a couple stops having effective communication, marital troubles leading to a divorce are not unusual.

Abuse

Abuse can be either a spouse being physically or emotionally abused by the other spouse. These are a common reason why many couples get divorced. Verbal or physical fighting that happens frequently between couples may make their relationship volatile and eventually end up in a divorce.

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

Handling Defaulting on Debts During a Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediator; California Divorce MediatorsDivorce can become a complicated subject, especially when debt becomes a part of it. If you are a married person, then you know what that means. There have been cases where one person walked away without paying a single cent while the other went bankrupt. It could be a nightmare for the one paying the debts.

How you handle debts after your split can have a major impact on your credit.

Debt on property

In states like California, both you and your spouse are liable for the debts incurred after you got married. It does not matter in whose name the account is. Both of you are responsible for the property purchased and the debt as to be shared. In other states, the debt is paid off by one person only. It might not sound fair but that is the law in those states.

Debt on credit accounts

The same goes for credit accounts as well. Since the credit was shared by you and your spouse, the debt too must be shared. Even if the divorce rules say that your spouse is responsible for paying the debt, you will still be a part of it. You miss the payments, and you become a defaulter. If you become a defaulter, then your credit score drops, making it harder to get credit in the future.

Handling joint debts

After you get divorced, make sure you close all joint accounts that are in your and your spouse’s name. Remove your spouse’s name from the authorized user list. Try getting the account converted into individual accounts if you can.

Try paying off as many debts as possible before the actual divorce. It will keep you prepared for any extra charges that might incur during your divorce proceedings.

Minimizing damage

When you close accounts, make sure that the credit accounts are in your name. Doing so will give you control over your money and you would not have to worry about any unknown debts.

It’s common among couples that one person borrows while the other spends. If you are one of them and you are on the spending side, then talk with your partner and work out a common ground. Understand that if your credit score is low, future lenders would not lend you money. Before you get divorced, try clearing as much debt as you can together.

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