Hindsight is a wonderful thing. Many California residents who have gone through divorce may wish that they could have had the benefit of it. For those who are currently thinking about initiating divorce proceedings, there are some things that are worth bearing in mind in order to achieve the best settlement when it comes to community property and the division of assets.
In its simplest form, community property is considered to be any asset or income that comes into the marriage via any means. For example, this could mean that if a business is started during the marriage, it may be considered communal. However, it is possible to draw up a post-nuptial document in order to create boundaries in relation to what each spouse may be entitled to in the event of divorce. It is worth noting that a financial inheritance is normally deemed to be the property of the beneficiary; however, if it is then used to purchase something that may be considered an asset, that purchase could then be considered community property.
While retirement portfolios can be considered to be joint assets, Social Security is not. This may affect not only the value of one’s retirement income, it may also affect one’s planned retirement age. For assets owned prior to the marriage, it is still possible to have those considered as separate property, so it is important to fully document everything that may come into this category.
It may have seemed a sceptical move once upon a time, but if one has a prenuptial agreement in place, it can be of help during a divorce. For those who had such an agreement drawn up while residing in a state that does not have community property, moving to a state such as California would not usually affect that agreement as it is a legally binding contract. Exceptions can still occur, so it is always best to seek advice appropriate to one’s own circumstances.
Source: abc2news.com, “5 ways marriage can affect your money”, Aug. 10, 2015