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San Mateo California Family Law Blog

Worried about debt and property division? A prenup can help

Planning for an upcoming wedding is an overwhelming ordeal. California couples spend hours upon hours selecting the right venue, picking the perfect date, sending out invitations and planning every last detail of their perfect day. Few, however, look ahead to something else they may want to plan for -- property division in the event of a divorce down the line. Although prenuptial agreements may feel distinctly unromantic, having one can help couples who must later traverse through the emotionally-fraught divorce process. 

Although there is still some lingering stigma around prenups, surveys indicate that more people are coming to appreciate them for what they are -- a family law planning tool. The American Academy of Matrimonial Lawyers reported that 62 percent of attorneys who participated in its study said that more of their clients were seeking help with prenups over the past three years. While experts understand that couples seem to be increasingly interested in prenups, many are still unsure of why this sudden shift in attitude is happening. This trend is especially confusing considering that millennials generally earn less than their parents did at the same age and are marrying far less frequently. 

When is co-parenting necessary for child custody?

Being a parent is not easy, but having to co-parent with an ex might be even more difficult. As more child custody agreements shift toward a focus on shared custody, divorced California parents must figure out how to successfully work together for the benefit of their children. Although this sounds good in theory, it can be a bit harder in real life. 

The move toward shared custody leaves behind historical norms of mom getting custody and dad seeing the kids during visitation. While shared custody might be better for kids, it can be incredibly difficult for divorced parents. Shared custody requires continual and ongoing communication between parents. For two people who were unable to stay married, this is asking a lot. 

Can I use mediation for a high asset divorce?

Ending a marriage is often viewed as an all-out battle in which each side fights to be the winner. In reality, most California couples know that fighting over every detail is not always smart, especially when the stakes are high. Mediation is a more collaborative approach that may be appropriate for those going through a high asset divorce. 

As an alternative dispute resolution, mediation gives divorcing couples the opportunity to negotiate their own settlements and agreements. Couples who choose mediation typically have much greater control over the process than those who choose a more standard approach. If you and your soon-to-be ex are on roughly the same page about things and decided to divorce on relatively good terms, this process can also be quicker and cheaper. 

Is fighting during a high asset divorce common?

Comfortable, but not quite wealthy -- that is what one family law expert says is the sweet spot for fighting during divorce. For California residents who are embarking on a high asset divorce that involves anywhere between $1 and $5 million in money and assets, the chances of fighting throughout the process are higher than for those who have both more and less. Although this might seem counter-intuitive, there is some evidence to back it up. 

In general, $1 million gives families a sense of financial comfort, at least that is according to the Schwab Center for Financial Research. But what happens to that comfortable $1 million when it gets split up during a divorce, particularly when some of it is allocated for specific payments, like alimony or child support? Suddenly, it is not so comfortable anymore. 

When recovering from drugs, child custody is often at risk

Women who test positive for drugs while pregnant run the risk of their child being born addicted as well. Studies show that mothers who abuse drugs while pregnant and whose newborns test positive may have them removed from their care and taken into child custody. In California, experts claim that removing children from their mothers at any age can be traumatic and cause a lifetime of problems.

Statistics show that since 2011 children being born chemically addicted has quadrupled. The number entering foster care programs after being removed from family homes has also increased. Experts believe the increase is related to parental drug abuse, and social service groups are trying different strategies to reverse these trends.

Proper planning is crucial during property division

A divorce late in life for some seniors means that, after many years together, they have grown apart from their spouses and decided to move on alone. While the split may be amicable, both sides need to understand the importance of property division during the divorce. Older couples in California and other states should consult with an attorney and financial consultant to understand the specific rules for dividing assets.

Older couples with a solid, high-earning history often have acquired multiple income yielding accounts. With multiple 401(k)s, annuities, pensions and IRAs, it can be increasingly difficult to divide everything equally. In some cases, couples may decide to trade off assets to avoid cashing in annuities and losing value. People should avoid the temptation of trying to split accounts 50-50. Some accounts are more complex than others and may require a professional.

Child custody is the biggest fear among women opioid abusers

Recovery for women from opioid addiction is a constant uphill battle. Days are consumed with efforts to maintain sobriety and keep benefits intact while managing court appearances about daily treatment and guardianship of their children. Many women in California and other states often delay treatment fearing they will have their child custody rights suspended because of opioid abuse.

Studies show that postpartum pain is often the gateway for opioid abuse among women. Opioids are often used to treat pain after childbirth, and research shows that 1 in 300 women with no history of drug abuse will become persistent users. The Journal of Obstetrics and Gynecology found that doctors often over-prescribe opioids for childbirth-related and reproductive procedures.

Do property division laws apply to inherited IRA accounts?

IRA accounts have become a huge bargaining chip in divorce settlements, but what about IRAs received in an inheritance from a family member? Considering the new tax laws that go into effect in 2019, pretax funds from IRAs could be used to make up for tax deductions in a divorce settlement. Residents in California and other states have used inherited IRA accounts to satisfy property division in a divorce.

There are no IRS guidelines or official rulings that say whether an inherited IRA should be considered marital property. Property acquired before marriage and gifts or inheritances received during the marriage are considered separate property. Property may remain separate unless it is commingled or re-titled to include the spouse's name.

Financial priorities for women after a high asset divorce

About 46 percent of women surveyed claim they were met with staggering financial surprises when their marriage ended. Some women in California and other states were unaware of their household's net worth when going through a high asset divorce. Surprisingly, women are eager to relinquish financial responsibilities to their husbands over the course of the marriage, leaving many oblivious that they share responsibility for the marital debt.

Experts say life after a divorce becomes more difficult for women who are in the dark about finances during their marriage. Others say living on a single income and being unable to keep the family home are their biggest financial fears along with securing affordable health insurance. Of the women surveyed, many said the amount of alimony and child support was less than expected, and the allotted time frame was shorter than anticipated.  

Money problems are often the source of divorce

The rate at which American couples end their marriages has been around 50 percent for decades, and studies show most divorces result from money problems. Some believe it is impossible to have a successful marriage when money issues are at the forefront of family problems. Studies show that couples in California who have money problems during a marriage often do not communicate about finances, and the problems often end in divorce.

Over 50 percent of couples have little or no savings, which adds to the financial stress in a marriage. There is no sense of security living paycheck to paycheck with no savings to cover unexpected expenses. Experts suggest starting small and creating an emergency fund with 2 percent of each paycheck and increasing that amount with raises. They recommend having three to six months of take-home pay in the event of a job loss or other emergency.

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