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

How to Determine Your Financial Needs After Divorce

Posted by: Gerald A. Maggio, Esq.

divorce mediation attorneys in Orange County; California Divorce MediatorsYou may think that estimating your expenses after the divorce is an easy task but in reality it may not be true. In fact many people are unable to name a proper estimate of their current lifestyle expenses. Majority of the people are practically clueless about where their money is going. Even if they have a tough idea, they are unable to articulate it properly when queried about it. When someone prompts them about what their expenses and requirements could be at present, they may agree to that.

What could be a big mistake?

Usually, your attorney may request you to prepare a budget based on their expenses. You may not down the obvious expense heads such as phone bills, Internet bills, cable TV/ satellite TV charges, cat insurance, loan payment for car, utilities, rent and mortgage. However, you may still feel that something is still amiss. Since you are well e not certain, you do not hand your budget to the attorney. Although your attorney may be constantly after you, you cannot be specific though your time could be running out.

In fact may find that the process has a strong likelihood with done or being asked the sand question repeatedly in a torture like situation.

While you may not have a sure shot answer to their question, you may eventually give your attorney something so that they do not pester you again. You should remember the figures you hand them over will be used for ascertaining some major monetary issues in your divorce case.

A financial consultant specialized in divorce cases suggests their clients that in case they want spousal support but do not know what their exact requirements are and what they should ask for, there are high chances of not getting it. On the other hand, when you are supposed to provide for spousal support but are ignorant on what are your needs. It is a tough job to hang to it. Plus it may not be there if you require it.

Merits of consulting a good divorce financial professional

When you work closely with a reputable divorce financial professional, the financial aspects of a divorce can be smoother. Additionally, it will also be more financially sound. Remember that it is the most crucial financial decision in anyone’s life. A divorce financial expert is well-equipped with the knowledge of a detailed list of all possible costs that could either be applicable to you or may help in reminding you to add it to your expense list. A well-prepared statement of expenses as well as a proper understanding on how up use your money can be the foundation of your financially secure future.

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

What Are The 3 Most Prominent Divorce Expenses?

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation lawyers; California Divorce MediatorsWhile getting married can be one of the most wonderful experiences in one’s life, a divorce can change all that. Your world can turn upside down in such trying times as you have to go through several types of divorce expenses apart from feeling emotionally and physically drained out. You can get set for all those big expenses through different ways and should be prepared to deal with them before they eventually arrive. But the most crucial way to be ready for your divorce is by being knowledgeable about all those impending expenses and what they will actually cost you in the coming days, months and years.

Mediation or divorce litigation expenses

Though litigation is a common phenomenon in many divorces, mediation can be a more effective and cheaper way of handling a situation. The at tenets of both sides are paid for conducting the negotiations during a litigation and the case may even go on trial to defend each party’s personal belongings that they believe are rightfully theirs. But in the case of a mediation, a neutral and unbiased third party functions by discussing with the couple for arriving at an agreement that is acceptable to both parties.

Divorce expenses with respect to travel and work

With the increasing popularity of self-employment and telecommuting, you just cannot afford to overlook this expense. While you may not commute physically to the office daily, your job may entail travel at times. Previously when you were married, you could do that since your spouse could keep an eye on the kids when you were away or you had the necessary financial support their jobs provided for making your job easy although there were travel expenses.

Expenses related to child care

While this expense may not apply to all couples who are getting divorced, it is a big expense head for couples with kids during their divorce proceeding as well as after it gets completed, When you and the other parent opt for a joint custody, you need to decide if you really want to bring them up single-handedly or would not like to take date of them., divorce expenses after the case is over and while it is going on may mount up for you. For example, in a joint custody, you need to pick up your kid from your former spouse’s house no matter where they stay post the divorce. Moreover, you have to take of them for six months in a year entirely on your own. If you are a telecommuting or self-employed individual, it could be an irritating thing since their work area can become a play area now. Likewise, if you are a working parent, you need to keep your kids in a good day care for which you may have to pay hundreds of bucks every month.

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

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