Spouses in California thinking about divorce may find themselves preoccupied with the financial consequences of their decision to end their marriage. Even after the emotional and practical issues associated with a split have been handled, the money aspects of divorce can linger for some time to come. However, by keeping some key guidelines in mind, people can help to protect their assets and continue to prepare to achieve their financial goals even as they proceed with a divorce.
California couples who are getting divorced should be aware of how the changes brought on by the passage of the Tax Cuts and Jobs Act can impact a marital separation. The new laws will institute changes in the treatment of child support and alimony that may result in divorces finalized after 2018 being more expensive.
Divorced people in California who are 50 and older may be a growing group, but they should be aware of the health problems that can be caused by the chronic stress that often accompanies divorce. Symptoms such as insomnia, anxiety and depression can worsen chronic health conditions including high blood pressure and diabetes, and people might also be more likely to engage in risky behaviors such as overeating and drinking too much. Healthy habits, such as exercising, may fall by the wayside.
One of the casualties of divorce is often retirement assets. However, California spouses who get divorced and have to give up a significant amount of their retirement assets may be able to rebuild those assets so that their retirement plans can remain in place.
While many people recognize the burden that student loan debt can place on millennials' financial lives, the burden that it can place on their relationships and marriages may be less well-known. Student debt can have a significant impact on people's plans for the future, and the numbers can be substantial. The average outstanding loan balance that borrowers have is $34,144, and that number is higher for the class of 2017. These graduates have an average educational debt load of $39,400. These amounts of debt can lead to a great deal of stress and pressure on the borrower as well as his or her relationships.
California residents and others who owe child support or alimony cannot use either Chapter 7 or Chapter 13 bankruptcy to get rid of it. However, Chapter 13 bankruptcy may allow a person to pay the debt over 60 months. A bankruptcy court may also analyze a divorce decree or similar court order and determine that what is classified as a domestic support obligation is labeled correctly.
Prenuptial agreements have risen in popularity in California and across the country for people of all ages. However, a particular increase has been evident among the millennial generation. People between the ages of 18 and 34 are more likely to seek a prenup before getting married, according to the American Academy of Matrimonial Lawyers. This recent uptick in interest follows an ongoing trend as the use of prenuptial agreements has multiplied fivefold in the past 20 years. The increase in prenup interest has accompanied an overall decline in marriage interest; only 42 percent of millennials identify marriage as a goal in life.
California couples who are preparing for divorce may already be aware that the process can have an impact on their finances moving forward. What they may not know, however, is that going through a divorce may actually be bad for their health. According to a study published in the Annals of Behavioral Medicine, those who get a divorce are more likely to pick up smoking or reduce their amount of physical activity.
A California parent may face some unexpected challenges if they are hit with a sudden disability due to an accident, injury or another cause. Families that rely on child support payments may also face significant challenges if the noncustodial parent is no longer able to work due to a disability. A disability can often mean that the original obligation for child support cannot be met.
Parents in California who have to pay child support may be concerned if they become unemployed. They should be aware that the obligation to submit child support does not end if they are no longer working and that any unemployment benefits they receive can be affected by their child support payments.