Divorce Financial Considerations

While Money Doesn’t Cause Divorce, It Must Be Protected

For decades, it’s been thought that financial stress is among the main causes of divorce. Sure spouses fight over money. One spends too much while the other doesn’t earn enough. But is financial difficulty a major culprit in the filing of divorce? Recent university research says, no.

Jan Anderson, an associate professor at California State University, wrote his doctoral dissertation on the subject. Like many Americans, Anderson’s parents divorced when he was a child. And like many, he believed in the notion that money problems are among the leading causes of divorce. As an adult he even taught courses in personal finance to help people develop better money skills to save their marriages.

Planning Finances After Divorce Doesn’t Have to be Painful

There’s no doubt that a California divorce is emotionally painful for both parties involved. But the financial and lifestyle pains can be equally as tough when the divorce is made official. Whether you are receiving or paying child support or alimony, you’re going to have to make some changes to your spending and money management habits.

Divorce and Taxes

Divorce is never easy for you and your children, and doing your taxes with both in mind for the first time just adds to the stress. There are a few factors that set the course for your first tax filing after the California divorce process is completed.

Your eligibility for declaring as a head of household depends on three primary California divorce pre-requisites: if your divorce occurred on or before the last day of the year, you paid at least 50% of the home upkeep over the past year, and a “qualifying person” has lived with you for at least half the year (other than a son/daughter away at college or another “temporary absence”).

Six Ways to Protect Your Pocketbook Before, During, and After Divorce

Divorce is expensive and can be a major setback in reaching your financial goals. During this time you’ll need to make serious decisions about your current finances and your future.

The following tips will help keep you on track and your divorce in order.

Tip #1 – Look at Your Current Financial Situation

Now that you’ve decided to divorce, it’s time to sort through your financials. But before you separate, pay for as many joint expenses using joint funds as you can. For example, pay for home repairs and new school clothes for the children using your joint account. After you split funds it becomes more complicated to track who pays for what expenses.

Dividing Assets – Pension Plans

If some of the assets you are dividing as part of your divorce include a pension plan, then you will need an expert Qualified Domestic Relations Order (QDRO) drafter to create the document for you. This is imperative, since every pension plan is different and because a QDRO is not a neutral document. If you rely on a standard QDRO template or a QDRO drafted by the opposing party, you may end up with an agreement that does not benefit you financially.

Court Needs to Consider Both Ability to Pay and Actual Expenses When Ordering Attorneys Fees

The court should consider both child support and spousal support payments when determining attorneys fees.

Alan T.S. v. Superior Court (Mary T.)

In this case the trial court had ordered $9,000 in attorney’s fees to wife during a dissolution case, citing disparity in wife’s gross income as a court clerk of $5,135/mo and that of husband who grossed $8,333/mo. as law librarian. When husband appealed the fee order he pointed out that not only was his income not substantially greater so as to support such a large attorney fee award, but that he has significant costs and expenses including child support and spousal support, after which he was not left with enough income to pay attorneys fees.