When love does not end up being until death do you part, you’ll have a maze of legal and financial challenges to work through as part of your divorce. If you live in California, you’ll need to know about the specifics of how divorce works in the Golden State. This guide will take you through the steps and specifics of divorce in California so you can keep your finances intact even though your marriage is ending. If you’re going through a divorce, you might want to find a financial advisor to walk you through the financial end of the process.
How to File for Divorce in California
You must meet certain eligibility requirements to file for divorce in a California court. First, at least one of the two parties to the divorce must have lived in California for at least six months prior to filing for divorce. Second, keep in mind that you have to file in a specific county within the state. To be eligible to file in any county in California, at least one of the spouses must have lived in that county for three months before filing for divorce.
Grounds for Divorce in California
All divorces in California are no-fault. Thus, the party who asks for the divorce does not have to give a reason or prove that he or she was wronged by the other spouse. Judges don’t consider fault when dividing property or determining support, either. Even if one partner committed adultery or harmed the other spouse in some way, the judge won’t consider that during divorce rulings.
Process to Divorce
You have to follow certain steps to get divorced in California. Note that there is a mandatory six-month waiting period after the divorce is filed before it is finalized, so don’t expect to take care of this right away.
To start the process for a divorce, one of the two spouses must file in superior court in the county where he or she meets the residency requirements. The petitioner is the spouse who files for divorce. The petitioner must serve the other spouse, known as the respondent, with copies of the petition to divorce as well as any other relevant paperwork.
From there, the divorce could go a number of ways. The simplest route is one in which both parties represent themselves and come up with a plan for the division of property and childcare without involving lawyers. If that is not possible, you can undergo a mediation. A mediator does not have the force of law to make couples agree to terms, but a mediator can help a couple work through difficult issues. The most time-consuming and expensive option is a divorce trial. This will require each party to have a lawyer. It will involve discovery from both sides, and a judge will reach the final decision on the terms of the divorce.
There’s also the option of a summary dissolution, a simplified divorce process. To qualify for a summary dissolution, a couple must meet the following criteria:
- Be married for less than five years
- Have no children born or adopted together during or before marriage (and also not currently be expecting a child)
- Must not own land or any buildings
- Must not rent any land or buildings other than the current place of residence (and not have a one-year lease or an option to buy)
- Have less than $47,000 of property acquired while married (excluding cars)
- Own less than $47,000 separate property each (property owned before marriage, obtained as a gift or through inheritance, acquired after you’ve been separated but before you get divorced or listed as separate property in a prenuptial agreement)
- Have less than $6,000 in debts accrued since marriage (excluding car loans)
- Agree that neither spouse will ever get spousal support
If these criteria are met, the couple must then draw up and sign an agreement dividing property and debts.
How to Split Up Assets During a Divorce in California
California is what is known as a community property state. This means that when two people get married, they are considered a single entity for the purpose of property ownership. Thus, any property or assets that either party earns or acquires during the marriage is considered community property and is owned by both spouses. Likewise, any debt that either party accrues during the marriage is also considered community property.
One important thing to note if you’ve lived in a non-community property state at any point during your marriage: California will treat any property that would have been considered community property had you been living in California at the time as community property for the purpose of a divorce in the state.
If you have assets or property that you owned before your marriage, or if you receive a gift or inheritance during your marriage, that is separate property and is owned only by you. Purchases made with separate property are also separate property. For instance, if you inherit $10,000 from your grandmother’s estate and use that to buy something, the purchase is separate property even if you bought it during your marriage.
How to Divide Property in California After Divorce
Once both spouses agree on what is community property and what is separate property, they’ll need to decide how to divide their community property. The spouses can make this decision among themselves if they are able to, or a mediator can help. If the couple can’t come to an agreement with the mediator’s help, then a judge will make the decisions. Both parties must abide by the judge’s decisions.
It will be necessary to assign a monetary value to property for the purpose of dividing it between the spouses. An appraisal may be necessary, especially for real estate or items like art or antiques. An accountant or financial expert will typically assess the worth of retirement assets like a 401(k) account or an annuity.
There are three basic options for dividing property:
- Decide which pieces of property go to which spouse in a way that feels equitable
- Have one spouse essentially buy out the other on various pieces of property (for instance, if one spouse wants to remain in the family home, he or she could pay the other spouse half of the home’s value)
- Sell the property and divide the assets
The couple can also choose to retain joint property after the divorce. This is sometimes a solution when both spouses want their children to stay in the family home.
How to Manage Child Support and Alimony Under California Divorce Laws
The court will consider a number of factors when determining how much child support one spouse must pay. These include:
- Net income of both parents
- Age of children
- Time children spend with each spouse
- Who declares children as a dependent for tax purposes
- Retirement plan contributions
- Health insurance costs
- Mortgage interest and property taxes of both parents
- Mandatory retirement contributions
- Mandatory union dues
A judge can order child support to cover a number of expenses. This can include basic needs like food, clothing and shelter, as well as other costs like health insurance, child care, travel costs for visitation and the cost of extracurricular activities.
The court can also rule that one spouse has to pay spousal support or alimony to the other. Spousal support in California can be permanent or temporary. Factors considered include:
- Earning potential of each spouse
- Living standard while married
- Professional skills of each party
- Sacrifices spouses made during marriage
- Financial support one spouse gave to other for education, training, etc.
- Assets and income
- Length of marriage
- Debts taken on during marriage
- Age and health
- Domestic violence incidents
- Criminal convictions
Be sure to take both alimony and child support into account when filing taxes after divorce.
401(k) and IRA and Divorce in California
Like other assets, California considers retirement accounts like 401(k) plans or IRAs as community property. However, the state considers any money that one spouse put into a retirement account or earned as interest before the marriage as separate property.
Thus, couples must only divide plan assets accrued during the marriage. Any contributions and interest that is separate property will go in full to the spouse who earned it before the couple wed.
After the trial, you must file a Qualified Domestic Relations Order with your plan administrator. This is a form explaining how you’re dividing your retirement plan.
Divorce and Estate Planning in California
Hopefully your plan won’t take effect for a long time, but estate planning is important even if you’re relatively young. Divorce can make estate planning more complicated, but it also makes it more critical.
Let’s say you have a will naming your spouse as your heir. Your instructions will remain valid until your divorce. Thus, if you don’t want your soon-to-be ex-spouse to inherit your estate, update your estate plan as quickly as possible. The law will pass over your ex-spouse after the divorce — even if he or she is listed as your primary beneficiary.
You’ll also want to take the time to revisit arrangements for your children if both you and your former spouse were to pass away. Though you and your spouse may have previously agreed on a plan, that may change over the course of a divorce.
California divorces take at least six months. California is a no-fault state, which means judges don’t consider the actions of either party when settling disputes. It is also a community property state. The court considers all assets earned during the marriage as the property of both spouses for the purpose of the divorce.
Financial Planning Tips
- Whether you’re in the midst of finalizing your divorce or you’re dealing with the aftermath, working with a financial advisor may be a smart decision. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Find out what your investments will be worth in the years to come with our free investment calculator. This can be good information to have going into a divorce proceedings as you take stock of your financial situation.
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