As some California couples begin the divorce process, retirement accounts, including IRAs, will be on the table for negotiations. Unlike other retirement accounts, which need a QDRO for their division, IRAs are divided based on the negotiations that lead to the divorce agreements.
Division of retirement accounts in divorce is all in the details
How to avoid long-term money woes after a divorce
While California residents may experience financial and emotional consequences after a divorce, it is possible to recover from them. According to a survey from Fidelity Investments, it takes about five years for most people to feel as if they have recovered both emotionally and financially from the end of a marriage. Those who played a role overseeing a household's finances said it was easier to recover from the financial fallout of a divorce.
Some attorneys say divorce filings increase in January
Couples in California may be more likely to file for divorce in January than at any other time of year. Many attorneys say that there is a surge in divorce filings just after the holidays.
How couples should approach relationship agreements
Individuals in California and throughout the country may choose to sign cohabitation agreements or prenuptial agreements. Cohabitation agreements are typically designed to define the rights and responsibilities of unmarried couples who live together. Prenuptial agreements are crafted and signed by individuals who are seeking to get married in the near future. Prenuptial agreements often cover topics such as spousal support and property division, and they are generally seen as a tool to override the standard marriage contract.
Divorce is a time of financial changes
People in California may face challenging financial times when they decide to divorce. Indeed, the financial changes that accompany the end of a marriage can be more profound and long-lasting than many of the legal and emotional effects. In addition to dealing with the complications of property division, people may also need to plan to handle their finances differently after the divorce is finalized. Professional assistance from a certified financial planner may help people to structure their new financial lives after their marriage comes to an end.
Take stock of assets prior to filing for divorce
Couples tend to start building wealth early in their marriages. This could result in considerable assets when they are ready to retire. However, California couples who get divorced before they exhaust those investment funds may have to divide those assets when they separate.
What to consider before getting a strategic divorce
California residents may see a reduced tax bill by divorcing their spouses. Furthermore, it may be possible for an individual to qualify for government health benefits by ending his or her marriage. This is because those individuals could have fewer assets and a lower yearly income on their own compared to when they were married. However, there is also a chance that a person loses out on the ability to benefit from IRA contributions or a 401(k) balance.
Property division and keeping a house with a buyout
Californians who are getting a divorce will have many issues to navigate, such as spousal support and child support. Another vital aspect is property division. If the couple owns a home, it may have significant value. One or both spouses might want to retain it. To sift through the complexities in this situation, it is important to know how to resolve it.
Healthy ways to approach divorce
Getting through a divorce is an experience that often involves having to mourn a lost way of life. However, California residents can approach their divorce in healthy ways that might help them overcome the negative feelings that often accompany a split.
Children sometimes ask to change child custody arrangements
Family law judges in California and around the country may modify child custody arrangements when doing so would be in the best interests of the child. Sometimes, custody arrangements are revised because custodial parents have problems with drugs or alcohol or enter into relationships with toxic or dangerous individuals, but judges could agree to a change in living arrangements simply because the child involved has decided that they would rather live with the noncustodial parent.
