As the end of the year approaches, spouses facing an impending divorce have historically tended to use the holiday season as one last opportunity to hold their families together. This year, however, things might be very different for divorcing or separated spouses. The reason for this potential difference is that the upcoming new year will usher in a dramatic change in how taxes are assessed on spousal support.
Typically, a California court will consider all the assets you own when making decisions on the separating of property during a divorce. This could leave you in a bad position if you have to split your assets with a soon-to-be-ex-spouse. While there are many ways you can illegally protect your assets, there are some legal ways to do so. Trying to hide assets is a crime, so it helps to learn legal ways to protect the things you own.
California might be a community property state but that does not automatically mean that the process of splitting assets during a divorce is going to be easy. When it comes to a family's home, many factors may play into the ultimate decision about what to do with the home and just how much it is actually worth. In many cases, at least one spouse might want to try to keep the home after the divorce.
Deciding how to divvy up your 401k can easily become one of the most complex issues in your divorce. Depending on how long you (and your employer in Stockton) have been contributing to it, there could very well be a significant amount of money in there already. It may be difficult to sell your ex-spouse on the virtue of being patient with such an account, and he or she may want whatever portion of it they are owed through your divorce agreement right now. This dilemma illustrates why the American Academy of Matrimonial Lawyers lists dividing retirement and pension accounts amongst the top three most contentious issues dealt with during divorce proceedings. So how should you handle such a situation?
If you are one of the many California residents who is contemplating a divorce, you will no doubt be interested to understand how the new tax law might impact you and your divorce settlement. If you might be responsible for paying spousal support to your partner, whether your divorce is finalized this year or next can make a big difference in what you might end up agreeing to. If you might be eligible to receive alimony, the timing of your divorce agreement may make a big difference in the amount of money you actually receive from these payments.
California residents who get divorced will want to understand the different things that may impact the financial outcome of this major life event for them. During the discussions about how to split a couple's assets and debts, the subject of retirement accounts may well arise. In marriages where one person's 401K account is identified as a major asset up for being split between both parties, special care will be required in order to avoid some potential taxes and penalties.