Advisors Say Plan For The Worst: Divorce
Recently from the San Francisco Family Law Blog
With more than 50 percent of marriages ending in divorce, dealing with custody, splitting up property and paying alimony are realities that some families must deal with.
Of course, they are also serious issues of contention that can often cause financial hardship to one or both parties involved.
"The harsh truth is all relationships end, be it divorce or death," said Cheryl Bernstein, a financial planner for Financial Essentials. "At some time or another, and you need to know where your money is."
There are many financial issues, ranging from tax implications to determining assets, that come into play during a divorce.
However, it's only a part of the story.
"In middle-size divorces, it's part of a case, but not all of the case," said Steven Chroman, a Valencia divorce attorney.
Money issues ranging from property distribution to spousal and child support all factor in and become issues, especially when a marriage has seen an increase in money for one or both parties.
Chroman said that in California, people are lucky, as in most divorce cases there are disclosure requirements, and people can hire accountants to be able to trace all property and assets and be able to determine tax implications.
Bernstein said it's important for both men and women to be financially educated and know where all their money and obligations are.
"Don't count on the other spouse," she said, because there could be case of needing to know where everything is.
Chroman said money can be manipulated, which is why it is important to have the right people available to handle what a person might forget during the course of a divorce.
In addition, in spousal support and monetary settlements, the parties have to be aware of all things that come up during the course of a marriage, and have "due diligence" in figuring out what is owned and managed.
Chroman said that although it is an unromantic ideal, a pre- or post-nuptial agreement might help in protecting assets, such as an estate or trust that a person comes into a marriage with, and being able to keep that money after a divorce.
It's not just for the wealthy, either. He said that it is also a common practice in middle-class marriages.
"A lot of things can happen," he said. "People get divorced for crazy reasons, and it's a security device for both."
By Reina V. Slutske
Signal Business Writer
Source: San Francisco Family Law Blog