If your marriage is on the rocks, one of your many worries is probably the impact divorce will have on your financial life. Working with your family law attorney, we can support you with a thorough analysis of your assets and understanding of the financial impact of a divorce on you and your estate plan, but first read these three widespread myths of the financial impact of divorce.
My Money Is My Money, and Your Money Is Your Money
Some people believe that if they keep the money they earn in separately titled bank accounts, it is “their money”, but this may or may not be true
Whether your money is “your” money in the context of divorce depends on state law, how the money was earned, whether it was inherited and whether you live in a community property state or not.
After the Divorce, Both Parties Will Enjoy the Same Standard of Living
When there are plenty of assets to go around, both parties are able to enjoy the same or similar standard of living they did before the divorce. However, many American families do not own adequate assets to allow this to happen. Therefore, although many states include the “standard of living” as a factor to be considered in spousal and child support, the economic realities are that it costs more to support two households than it does to support one. As such, it is often the case where neither party enjoys the same standard of living after a divorce. Also, if one spouse has separate property during the marriage, the asset division upon divorce may not be equal between the spouses.
A Nonworking Spouse Will Get Alimony for Life
While it is usually true that nonworking spouses will receive some amount of alimony, the time period is often limited to that necessary to allow the person to get back on his or her feet. This type of alimony, usually known as spousal support, is defined by the laws of the state in which the divorce occurs. In short, spousal support cannot be relied upon forever.
Another important aspect of divorce is what to do with your assets after death. Just because you are divorced does not mean that your spouse is no longer a beneficiary on your life insurance or retirement plans. Updating these, and other financial assets, during and after divorce (as state law allows), through your estate plan will bring your estate up to date and eliminate your ex-spouse from benefiting at your death.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. While we do not represent families in divorce, we work closely with clients and their family law attorneys to make sure our clients are protected when tragedies such as divorce happen. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.