Divorce is a painful process, both emotionally and financially. Even when couples remain amicable, dividing assets can be a complicated matter. If there is a large amount of assets, that just makes things even more difficult.
For those approaching retirement age, it’s important to know the factors that could impact their savings in a divorce.
Here is a broad overview of how property is split in a California divorce. This information can help you decide how to manage your retirement in a divorce.
Understanding the Basics of Community Property Division
Community property refers to any assets acquired during your marriage, including retirement. This “marital property” is jointly owned by both spouses.
When it comes to division, California uses the community property division model, splitting assets evenly between the two parties.
Be prepared to share your marital assets in a California divorce. Even when keep property, you will likely owe your spouse half its value.
Compile an Accurate List of All Your Retirement Savings Accounts and Other Assets
This list should include all relevant information, such as the account type, balance, and any potential tax implications. Update this list if there are any changes during the divorce.
Consider Hiring a Financial Advisor
Hiring a financial advisor with expertise in divorce is a smart move. It can help you make the best decisions with your finances. With their knowledge, they can guide you through the intricacies of splitting assets and liabilities, calculating taxes, and establishing a new retirement plan that aligns with your new circumstances.
A financial advisor can also help you stay focused on your long-term goals, so you don't make impulsive decisions that could hurt you in the long run.
Claiming Entitlement to Your Retirement Savings in a Divorce
Retirement savings are not always considered marital property. In some cases, the savings may be split equally between the parties, while in others, only the portion accumulated during the marriage is subject to division.
There are specific legal steps you can take to claim entitlement to your retirement. Your attorney and financial advisors can help you specify exactly which portions of your retirement belong to you alone.
Keep Your Communication About Money Matters Professional and Cordial
Remember to keep stay calm and reasonable when discussing money with your spouse. Stay focused on the financial aspects of the divorce, and avoid personal attacks or emotional outbursts.
It may be helpful to establish clear boundaries and expectations for communication, such as limiting discussions to scheduled meetings or using a neutral third-party mediator. By maintaining a respectful and business-like approach, both parties can work together towards a fair and amicable resolution for their financial assets and debts.
Consult With an Attorney
Technically, you are always free to create your own divorce agreements. This, however, is not advisable, especially with a topic as sensitive and important as retirement.
Meet with a qualified lawyer to ensure that your agreements are sound and legally binding. They can provide the necessary guidance and knowledge to ensure that your arrangements are fair and comprehensive, protecting both parties. Don't risk the legal complexities of divorce on your own.
Singleton Smith Law Offices, Inc. is here to help you create a reasonable balance for asset division during your divorce. You can contact us for a free consultation, so reach out online or call us now at (951) 779-1610.