When California couples get a divorce, their taxes will change including a shift from filing as married to filing as single or head of household. If the divorce happened at any time during the year including the last day of the year, then they are no longer considered married during that year for tax purposes. An annulment means that it will be necessary to file amended returns since the couple will no longer be considered to have been married in those years.
California residents who are in the process of getting a divorce are likely considering their future living arrangements. In many cases, one or both spouses want to retain ownership of the matrimonial home. Spouses who want to keep the mortgage and marital home might want to consider several aspects of their finances before making a decision.
California residents who are concerned about how bankruptcy may affect their divorce settlement may be interested to learn of a March bankruptcy court ruling. According to a federal bankruptcy judge, a divorce court does not have the authority to determine which obligations can survive bankruptcy.
Since California is a community property state, most assets acquired during marriage are considered marital property to be divided in the case of a divorce. However, there are a few exceptions to this rule, including inheritances. To maintain an inheritance as separate, the beneficiary should not commingle that money with jointly owned assets.
Emotional issues often drive people's decision to end a marriage, but the divorce process entails many important financial considerations. Once a couple splits, each party must establish a new household with a single income, which could be difficult in many housing markets in California.
Divorce is rarely a simple matter. For those who have built a business from the ground up, the prospect of ending a marriage takes on a much greater weight than it does for those who are merely ending a marriage.
Since California is a community property state, debts and assets acquired during a marriage are generally considered shared marital property. This means if that marriage ends in divorce, those debts and assets will in general be equally divided between the two by a judge. This might include student loans.
You hear about it more and more: the idea that a married couple might decide to separate, but remain under the same roof, often so they can easily co-parent and so as not to uproot the children. Sometimes it is to share residential expenses until a divorce is final or because each wants to be the one to stay, thinking they might increase the chance of staying in the residence with the kids after divorce.
Not all couples in California share the job of managing the finances. In fact, it is not unusual for there to be a division of labor when it comes to managing the household income. One spouse may handle day-to-day spending, like paying for groceries and utilities, while the other may manage long-term financial accounts and products, such as mortgages, retirement funds, and investments.
When California couples file for divorce and one party is ordered to or agrees to pay alimony, that obligation is not dischargeable if the payer later files for bankruptcy. It is important to note that not every provision in a divorce settlement will be considered to be alimony, however.