Marriage offers some financial advantages. Couples typically pay less in taxes than single people, they share the cost of housing and spend less on food than they would if they lived alone. When a California couple separates, however, each spouse has to learn to live without these benefits. Fortunately, there are some things a spouse could do to make the transition easier.
When married couples in California decide to get a divorce, they often forgo hiring an attorney in order to save money. While some assets may be easy to divide without any legal assistance, splitting retirement accounts, especially pensions, can be very tricky. Without the relevant knowledge, one or both parties could receive far less than they anticipated due to large tax bills and penalties. Divorce lawyers know how to split accounts so that they aren't subject to these costs.
Most couples in California who consider divorce seek to be above-board in their dealings with each other. This means that they are willing to disclose all assets and debts as part of the process of negotiating a fair settlement. Unfortunately, some spouses are unwilling to be forthcoming with this information, which can complicate a divorce.
California couples usually understand the importance of financial transparency. They will let each other know about major purchases, disclose balances in bank accounts and on credit cards and will have agreements about how their funds should be managed. In some cases, however, spouses are not always so honest.
Older California couples who are getting a divorce may have more difficulty recovering financially than younger people would. The problem is that they have less time to rebuild their finances before their retirement. Furthermore, they might have fewer employment opportunities. They might also make financial errors that could compound the situation.
California couples who get a divorce must go through a process of property division. As they are doing so, it is important that they accurately assess the value of their marital property. This means looking at the cost of taxes and maintenance along with the value of each asset.
California divorcees who have to pay alimony may be pleased to know that the money they pay to their ex-spouse can be tax deductible. However, there are requirements that have to be met.
In a California divorce, there are many different types of property that may be divided. A Thrift Savings Plan may be one of those items. A TSP is available to federal employees, and it is similar to 401(k) plans offered by private employers. A Retirement Benefits Court Order will need to be created before any portion of the account can be transferred to the other spouse.
California residents are strongly advised to consider the financial ramifications of divorce before going through with it. While a divorce can impact anyone financially, data shows that women generally experience greater challenges that men after ending a marriage. According to the Bureau of Labor Statistics, married women make up to 20 percent more per week than women who aren't married. They also make 9.6 percent more than men who are not married.
California couples who are considering divorce may wonder how they can prepare their finances. They may be getting advice from family and friends, but if that advice comes from other situations, it may not apply to them. It may be better to consult professionals, such as an attorney or a certified divorce financial analyst, rather than relying on the experiences of others.