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San Mateo California Family Law Blog

Don't rush retirement decisions during property division

Approaching divorce and retirement at the same time? For those in California who are dealing with this situation, the future may feel uncertain. Most people know that there are usually penalties and taxes associated with early withdrawals from retirement accounts, but this can be avoided during property division through careful attention to detail.

Before pulling funds from any accounts, couples must first deal with property division. In the absence of a prenuptial agreement, this involves determining which assets are separate and which are community property, and then dividing the community property according to California family laws. This means that if a retirement account is community property -- and many are -- then it will probably be split 50/50 between both parties.

Can property division wreck my retirement savings?

The retirement years are meant to be enjoyed and savored, but a divorce could disrupt those plans for tranquility. Divorcing California couples -- particularly those who are near retirement -- may feel the side effects on their retirement the most. Paying careful attention during property division and other important divorce processes can help these individuals protect their retirement savings as well as their financial security.

There is a noticeable difference between the average net wealth in divorced households compared to nondivorced households -- about 30 percent less. Less overall wealth can contribute to financial instability and insecurity, leaving many people unprepared for retirement. According to the Center for Retirement Research, divorced households struggle with retirement readiness far more than their peers who are still married.

Should I wrap up my high asset divorce before the New Year?

Divorce can be a financially stressful process with which many people in California struggle. When the stakes are high -- such as in a high asset divorce -- individuals may feel understandably worried about their future financial health. Here are a few things to keep in mind for those who are concerned about these issues and want to avoid potentially costly tax implications as the year rapidly draws to a close.

As most people are already aware, changes to the tax law will affect alimony. In the past, payers could deduct the costs, and recipients listed their support as taxable income, netting an overall greater savings for the couple. When the calendar flips over to 2019, those savings will disappear. Divorcing couples who still want to take advantage of these cost-savings tax benefits, and are considering finalizing the process before 2018 ends, should first decide what is most important to them, which will save time that might otherwise be spent arguing over inconsequential matters.

Judge signs off on Anna Faris and Chris Pratt's child custody

Even for California couples who understand that ending their unhappy marriage is for the best, divorce can be an understandably emotional process. As with almost any emotional task, figuring out some of the more difficult details -- such as child custody, support and asset division -- can be even more complicated. One celebrity couple, however, has seemed to find agreeable solutions to these issues without much problem.

Chris Pratt initially filed for divorce back in Dec. 2017, and the couple recently finalized everything in early Nov. 2018. The couple will share joint custody of their 6-year-old son. Both parents seem exceptionally committed to their new co-parenting situation, and even spent the recent Halloween holiday together so that they could both take their son out trick-or-treating.

Anna Faris and Chris Pratt reach agreement on child custody, more

Although Chris Pratt and Anna Faris might be most well-known to people in California for their roles in popular movies, they have been in the headlines more recently for their ongoing divorce. However, unlike many celebrity splits, the couple reached a settlement in a relatively quick and collaborative manner. Their settlement addresses important topics, such as alimony, child support and child custody.

Pratt and Faris filed for divorce back in Dec. 2017, at which time they cited irreconcilable differences. Less than a year later, their divorce is officially over. This may be due in part to their prenuptial agreement, which outlined how they would handle certain issues if they decided to end things.

Don't fret over property division -- get a prenup

You probably already have an idea of the type of people who use prenuptial agreements -- wealthy and perhaps not totally committed to their future nuptials. Unfortunately, this long-standing stereotype makes it difficult for the average person in California to fully grasp the true benefits of a prenup. Whether addressing concerns about property division or protecting yourself from your partner's debt, a prenup is an invaluable tool from which virtually anyone can benefit.

So why is it important to tackle issues like property division if you have no plans of divorcing in the future? Aside from the fact that divorce is a possibility for anyone, thinking about your assets and finances before marriage is actually a very healthy step. This gives you and your soon-to-be spouse the opportunity to be open and honest about your property and debt, laying the groundwork for future open lines of communication within your marriage. Plus, having your financial ducks in a row before you even walk down the aisle can make embarking on this new path in life much easier.

Am I eligible for alimony?

Post-divorce support payments are often necessary aspects of California family law. For those who earned significantly less than their ex-spouse or left the workplace altogether, alimony -- often referred to as spousal support -- can be an important lifeline. But how can an individual know whether he or she will receive alimony? There are a few factors that usually go into the decision. 

Barring extenuating circumstances, a marriage that lasted a few years or less is unlikely to yield alimony payments. However, limited alimony might be appropriate if one person earned a much higher income. Those who were married for longer periods of time -- usually 10 years or longer -- can expect alimony to come up during divorce proceedings.  

Don't split up Fido during property division; see a judge instead

Owning a pet is about so much more than simply feeding an animal. For most people in California, pet ownership means treating an animal like another valued member of the family. Unfortunately for most pet parents, this familial bond has not always translated well during divorce, putting beloved animals in the middle of heated property division disputes. Now, a new California law aims to help these individuals handle things more easily. 

The bill was recently signed by Governor Jerry Brown, and although it does not change the designation of pets as community property, it does improve matters during divorce. Instead of automatically shuffling pooches into the mix during property division, judges will have greater discretion to rule on these matters. Some have likened it to child custody, but for pets. 

Do I need to establish paternity for child custody?

Establishing paternity may not always seem like a priority for unmarried couples in California. Even if the parents are no longer in a relationship, if they are civil, why bring the law into things? The stakes are actually fairly high for not doing so. If you have a child for whom you have yet to establish paternity, you will not be able to exercise any child custody, visitation or legal rights. 

Just because things are good between you and your child's mother now does not mean that they will always be so, and a serious argument could prompt your ex to withhold access to your child. Even if things stay good between you, what if your ex wants to move out of state with your child? Without paternity, you cannot intervene in this decision. 

A prenup can protect you during a high asset divorce

Prenuptial agreements are enjoying a bit of boom in popularity, and experts say there is one group to thank for that -- millennials. As these young adults in California delay marriage in favor of dating for longer periods and advancing their careers, they have significantly more to protect. When thinking ahead, protecting themselves during a potentially high asset divorce is essential. 

According to the U.S. Census, the average age of marriage has risen by nearly two years for men and almost three years for women since 2005. And what are young adults doing with this extra time during their 20s when they are single? For many, advancing their careers. This often includes accumulating wealth through various approaches, including employee stock options, retirement savings, property and more. Potentially laying half of that on the line to say "I do" is a risky move, even if the relationship seems solid. 

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