Just as preparing for a California wedding can be highly stressful, so can getting ready for a divorce. This is especially true for those who have a large amount of shared assets and property to divide with a spouse. A few tips can help a person to pay attention to his or her most important assets in a marriage, as well as to prepare financially for life after divorce.
After a divorce, one would be wise to remember to change any beneficiary designations on his or her retirement accounts. Otherwise, in the event of one’s death, this retirement money may end up in an ex-spouse’s hands. In addition, it may help to recalculate the amount of money one has and needs for retirement following the divorce. This is particularly important if one was ordered to transfer money from a retirement account to an ex-spouse during the asset distribution phase of the divorce proceeding.
It’s also worth noting that no income taxes have to be paid on any property transferred between former spouses due to the marriage. Also, the person who ends up not staying in the marital home would be wise to have his or her name removed from the deed and mortgage. Otherwise, this person may find it difficult to get needed credit.
Some divorcees are also motivated to cancel all joint accounts and reopen accounts in their own names. While this enables newly single people in California to embrace financial independence, it actually may hurt them if their personal credit isn’t strong enough to qualify them for credit. Even though the divorce process can be complex in California when dealing with the splitting up of shared assets and property, mastering laws concerning these matters can ensure that one strives for a settlement that is the most personally favorable in our state.
Source: dentistryiq.com, “Important considerations for the couple going through a divorce: Part 2“, Theodore C. Schumann, May 18, 2014