Divorce is a stressful process that has its way of bringing out the worst in people. Some embittered spouses see divorce as a way to seek revenge by emptying bank accounts, freezing credit cards, hiding assets and seizing money.
Although divorce can be the best way to get out of an unhappy marriage, it can also lead to adverse consequences if you don’t know your rights. Check out these secrets from a divorce attorney to help protect your rights, your assets, and your sanity.
1. Don’t make emotional decisions.
It’s easy to take emotions out on one’s ex, but when it comes to negotiating a divorce settlement, you don’t want your hurt feelings to interfere with the task at hand. In the long run, being spiteful can hurt, not help your finances.
2. In California, all community property is fair game.
California is a community property state, meaning all community or “marital” property is subject to a 50/50 division, regardless of whose name is on the account or title. The same holds true for debts and liabilities.
3. Make that big purchase before you file for divorce.
Are you planning on making a big purchase, such as a new car? Keep in mind that the court issues automatic financial restraining orders that prohibit spouses from liquidating assets or making big purchases after they file for divorce.
If you’re planning on getting a divorce, we suggest making that big purchase before filing.
4. Gather key documents before you file.
If you’re thinking about filing for divorce, it can be difficult to get back into the door after you’ve left, or it can be hard finding the necessary financial documents after you’ve told your spouse that you want out.
We recommend taking the time to collect all the financial evidence before the split. You want to take pictures of assets and make copies of all account statements, recent taxes, and loan documents – that way you can be prepared before heading to court.
5. Don’t hide assets.
While hiding receipts or income during marriage isn’t illegal, if you hide assets or financial information during your divorce, you’re messing with the law.
If hidden assets are discovered, you’ll lose credibility with the court, and you could face stiff penalties, including fines. The best way to protect yourself is to be open and honest about all assets, income and liabilities.
6. Spousal support is tax write-off.
If you’re ordered to pay spousal support it can actually help you out come tax time. People who pay spousal support to their exes are able to write it off as a tax deduction. However, for the receiving spouse it’s taxable income.
7. Don’t rely on spousal support.
If your spouse is currently supporting you, think about dusting off your resume or refreshing your skills before filing for divorce.
Even if the court does award you spousal support, the judge can calculate your income and expect you to be working if your children are school-aged and you are not disabled or retired. We caution clients against depending too much on a spousal support award.
If you update your education now, it can help you if things don’t go the way you planned in court.
For more divorce tips, contact an Encino divorce attorney from Cutter & Lax!