Divorce is an increasingly complicated process, and its complexity is compounded by different laws governing separation and divorce in different states. Even before any legal subtleties come into play, though, there are financial mistakes women make that come from simply not having or not remembering the right information. You can avoid some of these if you:
- Know what you own. You should have a working knowledge of all your marital assets. Don’t forget pensions, deferred compensation, retirement investments, stock options, life insurance, annuities, and even country club memberships, accrued vacation time and other executive perks. All these things have value and should not be overlooked when it comes time to negotiate a divorce settlement. In addition, take stock of what you owe (your debt and liabilities), and get a handle on your expenses. If you think your husband may be hiding assets, income and/or debt, take steps to find out.
- Know the difference between separate and marital property. This is an area where different state laws apply, but anything you owned before you married (including your engagement ring) is typically considered separate property. Inheritances, gifts from people other than your husband and “pain and suffering” awards from lawsuits are also generally considered separate. Make sure you do not commingle your separate assets with your marital assets (For example, keep them in a completely separate bank account in your name only). Anything acquired during the marriage, including gifts between spouses, is usually considered marital property no matter which spouse “owns” it or how it’s titled.
- Know what you’re likely entitled to. Keep in mind that an equitable division of property does not necessarily mean a 50/50 split. In general terms, if you live in a Community Property State, like California, whatever you earn or acquire during the marriage is split 50-50. But in Equitable Distribution States, the length of the marriage, income, and future earnings capacity may all be considered. (See a more detailed discussion in my earlier blog post about the difference between Community Property and Equitable Distribution States.) “Half of everything” is a common refrain, but if you’re a 60 year-old homemaker with no professional work experience, you could be entitled to more; or, if you’re in your 30s with an advanced degree and a professional career, your share may be less.
For more information from a Los Angeles divorce lawyer, click here.