How To Find Concealed Assets and Money During Your Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce attorneys; The Maggio Law FirmAs soon as the divorce proceedings start, it has been observed that many people try their best to hold back what according to them is their own property or money. There are some individuals who even possess secret bank accounts as well as other financial activities when they were married. If you feel your estranged spouse may have done the same and you desire to get a fair settlement, you need to expose such hidden accounts

When you are not ignorant about the resources and techniques used by financial and accounts professionals, you will not become a victim of your former spouse or the spouse who is concealing certain assets. Here are some of the ways to determine if your spouse may have concealed assets.

Saving accounts of your former spouse can reveal unusual withdrawals or deposits made

Abnormal withdrawals and deposits may show light to unveil a hidden asset like investments made to generate dividends. When you come across such abnormal withdrawals or deposits, you should note them down. Make sure of retaining copies of all such account statements before separating from your spouse.

Check canceled checks and account statements of your spouse

When you come across a canceled check in order to make a purchase you were ignorant about like a real estate property, it can make a significant impact on how the marital assets are split in the event of a divorce. A lot of interesting facts may get revealed when you check canceled checks and account statements. You need to ensure that you have a copy of all such financial accounts in the discovery stage of your divorce.

A courthouse can be a precious source of information if you are checking your spouse’s hidden assets

In case your spouse has taken money on a loan from a mortgage institution or a bank, the loan applications made will be filed at the said courthouse, an individual has to fill up an application form for taking loan from a Frank. Such applications will have details of all the assets owned by that individual and the estimated values of each of them. Thus, most of the times, you get a fair idea of the actual assets owned by your spouse and their worth by checking a loan application form.

You can also begin the discovery process by checking your spouse’s tax returns

A majority of the people fill their income tax returns sincerely as they are afraid of paying fines and penalties or being imprisoned otherwise. Though a spouse could be hiding his or her actual income from you, they will not try to do it while filing their returns.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Top 3 Costly Financial Mistakes to Avoid During Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce attorney; The Maggio Law FirmThere are many such cases where a divorcing spouse accepts a settlement even though it could be unfair to him or her. However, a few years down the line, he or she may go through severe financial constraints. Irrespective of what the reason for agreeing to such a settlement was, such an occurrence could be drastically improved even though it may not be avoided altogether. This is possible when you learn some of these most expensive financial blunders that are commonly made while arriving at divorce settlements.

Mistake 1: Unable to budget according to a new lifestyle

A common financial mistake that is made after the divorce is the inability to budget on the basis of one’s new lifestyle. This happens quite frequently, especially when one of the spouses retains the house for his or her emotional attachment or for the kids. The cost of house maintenance and the inadequacy of liquid assets at times lead to a fast disappearance of the cash and ultimately being forced to sell the house. However, a scenario like this can be avoided when you take a close look at your income and liquid assets versus your expenses.

Mistake 2: Unaware of the asset liquidity status

The capability of accessing an asset’s cash value is termed as liquidity. Typically in any divorce settlement, one of the parties is awarded the majority of the liquidity assets like brokerage accounts, retirement plans, and so on, while the other spouse gets a majority of the illiquid assets.

In case a proposed divorce settlement has less liquidity in your name, it means there will be adequate cash flow all through the years for coping up with your living costs. However, if that is not the case, you need to think about disposing of your house or other assets or bring down your expenses drastically so that your budgetary requirements can be met.

Mistake 3: Not exercising adequate control over the insurance policies

A majority of divorce decrees require one of the concerned parties to procure an insurance policy for insuring different types of financial needs such as child support or value of payments made towards alimony. In case you are that person for whom the coverage has been procured, it is vital that you should be either the beneficiary or the policy owner.

If that is not the case, your former spouse who held the policy can simply stop paying the premiums without your knowledge till the time there is a requirement of the insurance policy and it is nonexistent. It could be a financially shattering experience for you.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

What to Know About Dividing Pension Plans In A Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce lawyers; The Maggio Law FirmPension plans are usually divided in one of only two ways: buying out the other spouse’s present day value in the pension or by reserving juridiction to divide the plan by a Qualified Domestic Relations Order (QDRO).  The latter option is more common way in which to handle such plans. Under this option, it is ordered by the court that at the time of retirement of the employed spouse, the other one will be the recipient of a percentage of every pension check. This percentage is arrived at by dividing years when the spouses spent together in their once home as wife and husband by total number of all years when the spouse who is employed had participated in pension plan. The result amount of that division is community property percentage of pension plan. To give an example, if a husband has put in 20 years of his monetary contributions to a pension plan, and 10 of the coinciding years he lived with the wife, the share of the pension plan will be about 50 percent. In such a case, the wife will have 25 percent of the pension checks of the husband. 

Pension Benefits  

As per reservation of jurisdiction, the spouse considered a non-employee could elect to receive her or his share of the pension benefits of the employee spouse at earliest time when the employed spouse will retire. It means that in the case of the employed spouse electing not to retire at earliest opportunity, that spouse must pay the non-employed spouse what the latter would have got in case the employed spouse would have retired. To give an example, if the husband becomes eligible to retire at 55, but elects not to retire in that age, his ex-wife could demand that he provides her the amount of money she would have received if he retired during that age. It is to be mentioned that in case the wife selects this option, she will not receive any increases due to higher cost of living after that date.

Qualified Domestic Relations Orders (QDRO)

The Federal Retirement Equity Act created “Qualified Domestic Relations Orders”. In this system, the court gives orders regarding the retirement plan of the spouse. The Federal law states that the employer must comply with the order terms.  However, the QDRO is an essential step in the dissolution process. A number of companies have been created for the sole aim of making them and there are attorneys who only specialize in doing QDROs.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Saving Your Retirement Plan During A Late-Life Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce attorneys; The Maggio Law FirmLate life divorces are increasing in number as more and more senior citizens seem to be dissatisfied in their marriages. A recent study has revealed that one in every four divorces are late-life divorces. Like any divorce, a late-life divorce can be hard hitting on the financial front. But a late-life divorce could ruin people with the best retirement plans.

The cost of living separately is much higher than the cost of living together as the number of accommodations and facilities double. In simpler words, an elderly couple that have been together for a long period of time would have likely planned their retirement together. When a divorce is filed, one of the spouses will have to move out and more often than not, have to plan separate occasions to meet other family members. All of this, could drive expenses up by 30 or 40 percent.

Anyone involved in a divorce will tell you that it is one of the most expensive scenarios to deal with. For people aged 50 or over, this could spell the destruction of their financial plan altogether. A financial planner or advisor needs to be consulted in order to understand the circumstances. This is especially true, if one of the spouses handled the finances throughout the marriage.

In some cases, retirement benefits might be more valuable than all of the couple’s other community property combined. This might form conflict on the division of the benefits. Some forms of benefits such as social security, military compensation, and workers’ compensation for disability are not considered to be community property and will remain with the individual after divorce.

Retirement Allocations

In California, retirement is considered to be community property that can be divided between the spouses. However, retirement divisions are handled outside of the usual divorce proceedings. A Qualified Domestic Relations Order (QDRO) outlines the division of the retirement funds.  It is usually filed after the divorce judgment. The QDRO is needed to divide 401k, 403b, profit-sharing plans, tax sheltered annuities and other aspects.

During divorce proceedings, the QDRO calls for the equal division of retirement assets. However, mediation and negotiation can help spouses agree on different rates or division percentages. The QDRO  is the final indicator of division of retirement benefits. Divorce attorneys often hire QDRO specialists to help segregation and division. Once both parties have agreed on the division of benefits, a QDRO is filed.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

 
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