Signs That Your Spouse May Be Hiding Assets

Posted by: Gerald A. Maggio, Esq.

Divorce Lawyers Orange County; The Maggio Law FirmThe assets owned by you typically come under various heads such as a business, your primary residence or primary home, a professional practice, cash value of your life insurance coverage, pension funds, retirement funds, shares, savings, bank accounts and other property investments. Rather than depending on the integrity of your spouse or only relying on the fair conduct of the court, it is a sensible approach to watch out for these strategies and signs to know whether your spouse is trying to hide marital assets are not.

Check out the following key aims for your spouse to hide assets during a divorce:
1. To claim that expenses are greater than they are in reality
2. Highlight that their income is lower than it is
3. Exaggerate debts to show that they are insolvent

These are the most common tactics in a divorce:
1. Transfer asset ownership of marital assets to close friends or family members and ask them to hold until the divorce is finalized
2. Hiring a conspirator for manipulating the timing of invoicing creditors or income
3. Hiding unrecorded cash secretly
4. Extract recorded cash in the sly to apply complex accounting schemes

Check out some of these most common tricks used by spouses to hide assets:

Personal
1. Making advance claim for entitlement
2. Keep complaining about high debt or lack of money to stay away from later suspicions
3. Placing money on a casino account if the person is fond of frequent gambling
4. Announcing all of a sudden that their business has failed
5. Receive settlements and accounts at a private mailing as areas or postal box
6. Try to be secretive or tight-lipped about financial matters

Business
1. Delay in signing fresh contracts that could lead to increased income
2. Including friends or other family members on the payroll. Alternatively, pay them in lieu of their so-called consulting services that they are supposed to pay back at a later point of time
3. Pay more than what is actually due to pre-pay vendors or creditors that they refund once the divorce comes through
4. Purposely overlook reimbursing business-related expenses till the divorce is finalized

Assets
1. A spouse may sell marital assets to the friends or family members who pose as independent buyers. The profits, if any are shared once the divorce proceedings are over
2. Assets can be transferred to friends and family. Later on, once the divorce comes through, they are reversed
3. A sudden and overwhelming decline in the value of business or marital investments or assets can be declared by a spouse to minimize suspicion

Banking
1. Procure or maintain full control of the banking information, passwords and bank accounts
2. Open bank accounts in a friend or child’s name to conceal funds
3. Set up several business or personal fans accounts to transfer funds

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.  

How To Take Good Financial Decisions During A Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce attorney; The Maggio Law FirmAs a married couple you might have enjoyed a certain sense of financial security. Whether you were being supported by your spouse or you had two incomes coming in, it is always easier when you have someone to share the responsibility with. Going through a divorce could affect your financial situation in unexpected ways and if you are not prepared for them life could get very difficult.

Here are a few ways you can make good financial decisions to help you during a divorce:

  1. Mutual consent and shared lawyer fees: At the very start of your divorce you could find yourself shelling out a lot by way of legal fees. If you can talk to your spouse and you can both agree on a mutual consent divorce you could even hire one lawyer between both of you. A single lawyer who represents both your interests also means that you can split the cost between you two, or you should consider using a divorce mediator to work out the issues in your divorce.  Mutual consent could also avoid lengthy court proceedings which will reduce overall costs.
  1. Asset division: According to California law any property or other assets bought during marriage are considered community property and should be divided equally between partners. If you decide that you want to keep the house you might have to pay your ex for their share in the house which might not be economically feasible to you. You might want to look at the option of selling the house and dividing the amount equally between both of you.
  1. Child support: If children are involved you should consider your options for child support. If one parent has full custody an agreement should be worked out where the other parent provides financial support for the children. Even in cases of shared custody and co-parenting and arrangement can be made where the parent who earns more could help the other parent out financially.
  1. Get insurance: If you are receiving child support and alimony from your former spouse you are at possible risk of them not being able to pay you at any point. Your ex could lose their job or suffer and injury which might prevent them from working for a while making it difficult for them to pay you. You could have an agreement that requires your ex to be insured against such incidents so that they can continue with the payments.

There are many areas you might overlook while getting a divorce which could place a large financial burden on you in the long run. It might help to hire a professional to assess the situation and give you sound financial advice before you make any decisions.

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 Taxes In A Divorce Or Separation

Posted by: Gerald A. Maggio, Esq.

Orange county divorce lawyer; The Maggio Law FirmDivorce is not an easy time for most couples and their families. However, a question whose answer is easy to respond to is the tax implications of a legal separation or a divorce. It has been observed quite often that there are several people who end up paying an exorbitant amount as tax after their divorce. It happens as they are not familiar with the implications in the beginning. After all, a family goes through a crucial transition and hardly enjoys paying a big sum in taxes due to a breakdown in the relationship. Thus, it makes sense for the affected couples to spend some time to think carefully about tax. It will really be an excellent investment for them.

What is the most crucial thing one needs to be familiar with tax on separation or divorce?

As long as a couple lives together and are married, they can transfer assets to each other without altering the CGT or capital gains tax.

However, there are many people who do not realize:

The tax benefit associated with a marriage ceases to exist when the tax year ends just after a permanent legal separation and even before a divorce is effective. Hence, when a couple separates say on January 1st but decides that they want to split after 6 months, they can no longer enjoy the benefit of transferring assets with one another free of tax.

What is the remedial action(s)?

From the tax perspective, it is better to legally separate by the first week of April. Such a decision will give a period of an entire year to the said couple for planning issues related to asset transfer between one another.

Though it may not be a practical action to take for many couples, they may invest some time thinking about it. The harsh reality is by the time most people start thinking about issues related to tax planning when they are getting divorced; they may not enjoy the exemption on Capital Gains Tax.

Family Home

It will be eligible for being exempted from capital gains tax while transferring. However, it has to be the primary residence of the couple throughout the ownership period. The couple can enjoy a relief from capital gains tax when such houses are sold, which have been their main home. Sometimes, there may be some relief even if the said family house is not the main residence during the time a couple was married. In such scenarios, there could be an extension of relief period.

Certain businesses may be granted exemption from CGT:

  1. Some shares in trading companies that are unquoted
  2. Interests in trading partnership
  3. Sole proprietorship

However, the tax implications of a divorce or a legal separation may vary from state to state. Consult a good Orange County divorce attorney to get help and expert guidance when you are about to separate or divorce from your spouse.

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 Should You Do With Your House Post-Divorce?

Posted by: Gerald A. Maggio, Esq.

Top Orange County divorce lawyers; The Maggio Law FirmAre you and your spouse contemplating to divorce one another? The most important question for a majority of couples who are about to divorce is what they should do with their house post-divorce. In fact, the family house is typically the most important asset to split. Plus, it is not simply a property for such couples. They may have formed a good rapport with the neighborhood, children are contented in the school in that locality and last, but not the least, the couple could have invested a lot of love, energy and time to create a home out of a house.

When one of the spouses wants to retain the house in question even after the divorce, financing is a tool through with one spouse can purchase the share of the other. When you have the right kind of knowledge, it becomes easier for you to protect your financial interests and do whatever is in the best interests of your family. It is always recommended to consult a reputable Orange County divorce attorney whenever you are in a doubt. In order to arm yourself adequately, check out these common questions and know ways of dealing with them.

  1. You need to finalize your divorce now. However, you are yet to get an approval for your mortgage refinances. Can you protect yourself financially even then?

If you have a need of finalizing your divorce prior to the approval of the mortgage, it is important for you to make sure that your agreement on the marital settlement has a mention that only one of the spouses will refinance the house. However, remember that your liability still exists as far as the lender is concerned. In case you are the one who will give up the home, your partner should put his or her signature on the Deed of Trust for Securing Assumption. Thus, you can enjoy the right of foreclosure and reclaim ownership when the other party is not able to refinance and becomes a defaulter on the mortgage. Once your divorce gets finalized, you should request your lender to inform you if there are incidences of missed payments.

  1. Do you have to refinance your home in a divorce? Can you remove the name of one of the spouses from the property deed?

It is a common misperception leading to severe consequences. When you put your signature on the Quit Claim Deed, your name can be removed from the said deed. It also signifies that the ownership of the home does not belong to you anymore. However, it is distinct from the mortgage taken. To put it simply, in case you and your spouse had taken the mortgage for your house together, you still own liability to pay off the debt.

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!

Status of Student Loan Debt After a California Divorce

Posted by: Gerald A. Maggio, Esq.

Best Orange County divorce lawyers; The Maggio Law FirmMarriages come with many responsibilities and one of them is supporting a spouse with his/her student loans. Paying back the educational loan can be tough for some and becomes even tougher once a divorce takes place. Current statistics show that college students who take up educational loans end up with huge debts which become hard to pay. In a marriage, the debt can be cleared by both spouse but it’s not as easy as it sounds. It can get complicated and after a divorce, students loans can look like a huge burden.

Finances are an important factor when it comes to a marriage and a divorce and most individuals are extremely cautious about how they spend their money. Debts are never pleasant and paying for something which is not yours can be even more painful.

How is the student loan divided before and after the marriage?

If you and your spouse have taken an equal amount of student loans, then each is responsible for their own debts. In such cases, divorce arrangements become easier to work out. However, if one of you has more debts than the other person, separate arrangements must be made to pay off the debt. Sit with your legal counsel and chalk out a plan to clear the debt. Student loans are often seen as property by a court of law and upon marriage and divorce, it is treated in the same way. So, if you had the student loan prior to the marriage, it becomes a separate property and should be cleared by you. However, if the loan was taken after you got married, then during a divorce, it can be treated as marital property. Then again, if the loan was taken by the person who does not have an income after marriage, the situation becomes trickier. If the other spouse took care of the student loan, then the court has the right to favor him/her during a divorce.

Loans are supposed to be paid by the person who took it but it does not always work out in a marriage. Having a student loan and having a job are not always related. Finances are an important part of divorce proceedings and no individual wants to pay more than he/she has to. Incurring student loan debts can be financially tough for the person it has been burdened with it. Student loan debt issues should be consulted with an experienced Orange County divorce lawyer.

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

What Happens To The Company You Run With Your Spouse After Divorce?

Posted by: Gerald A. Maggio, Esq.

Orange County Divorce Attorneys; The Maggio Law FirmMany married people did not even think in their wildest dreams that would get divorced one day. This is especially true when the spouses work with one another. Irrespective of what decision you arrive at, these are some of the important things you need to sort out in your business while your divorce is underway.

You need to be clear about creating divisions between emotional, financial and legal issues

Any divorce is not just a legal split between married couples. When both of you are working together, you should be serious about sorting out ways of dealing with your business, any kids you may have from your marriage and finances in the best possible manner. More importantly, you should make it a point, to begin with segregating these issues, desirable outcomes and needs.

When you are on the verge of coming out of your romantic relationship, there is a tendency seen to let personal concerns complicate the business relationships. So take some time to establish what your specific requirements and desirable outcomes are in different areas with distinct and concrete plans and goals.

Do not be on the journey all alone

Though you may be somewhat prepared now to receive financial and legal aid, remember that it will be a great morale booster when you have some people by your side to support you emotionally. Some experts even recommend counseling. In case you and your former spouse continue to work together but raking up emotional issues from the past in your work, it can be quite tough to manage a business effectively. It is recommended that you form a team comprising of professionals, family, and friends who can help you to get over your emotional and psychological dilemmas.

Take a break from your work

Irrespective of how amicably you parted from your spouse after the divorce. There is bound to be a transition period. So, take some time off from whatever you had been doing previously and try to introspect what you actually want, rather than acting on an impulse and trying to stick together stubbornly or breaking up your business. After all, time does heal everything.

Your roles need to be defined

Not only does your relationship need refining after the divorce, but you should also embark upon drawing clear boundaries around your various responsibilities and roles at work. Proper identification of the task each person will be doing needs to be properly defined. This will facilitate in ensuring that you do not give to micromanage one another.

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

What To Know About Business Valuations In California Divorces

Posted by: Gerald A. Maggio, Esq.

orange county divorce lawyers; The Maggio Law FirmProfessional business valuations is an expensive task in any marital dissolution. The spouse who manages the business quickly realizes that techniques used to value the practice have no relation with the practice’s fair market value. The spouse can then in all fairness insist that no willing buyer can be found. There can also be concerns regarding “double dipping”. This comes as the same earnings used to calculate a value in such a practice can also be utilized for calculating the support. In case the practice has a value of marital efforts, it must also be divided.

In California, a number of cases have reviewed techniques utilized by experts when valuing any professional practice. One consistent factor common between all decisions is the court will honor any technique for valuing such a practice. This includes goodwill. These will remain true as long as value is legitimately established by the evidence.

General principles

A trial court, when determining the value of any professional practice, must find out existence and the value of a number of factors. These include fixed assets like furniture, law library, cash, supplies and equipment and a number of other assets like accounts receivable, costs advanced with collectability chances, work in progress that are partially completed, but not receivable billed, and also work which is completed, but not yet billed. The practitioner’s goodwill in his business as going concern and the practitioner’s liability related to the business.

Other general principles include the business nature and enterprise history from the time of its inception. It also includes the general economic outlook and also the outlook and condition of the particular industry concerned. The stock’s book value and the business’s financial condition also plays a  role. The company’s earning and dividend paying capacity are also important.

Value standard

Unlike when assets are to be divided in kind, Californian courts can be obligated to rule on assets values and then divide them equally. Considerable debate has been allowed to find the proper standard to use in valuing marital assets. This is more fueled by the imprecise use of court terms like “going concern value” or “investment value”. The worst term is “value”.

Treasury regulations in the United States define fair market value as price in which property will communicate between a buyer and a seller. They both should not be under any compulsion to sell or to buy. Both must also have relevant knowledge about the facts.

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

Credit Scores Can Be Affected By Child Support Payments

Posted by: Gerald A. Maggio, Esq.

Divorce attorneys in Orange County; The Maggio Law Firm, Inc.During divorce, there are many factors that can negatively affect an individual. Child support payments are serious matters and default payments can even land an individual in jail. But there is another problem that arises due to untimely child support payments. Credit scores are also affected. Timely payments can strengthen the credit score and irregular payments can have the opposite effect.

Child support payments are seen with the same importance as mortgage or vehicles by credit companies. Child support reports default payments to credit companies. The credit companies keep a track of individuals with defaults. Default payments have an effect on loans or interest rates.

Individuals who wish to know how the child support system works should consider looking at the specific rules and regulations in the respective states.  In some states, child support dues are reported only after a certain time whereas in other states the dues are reported as and when the default takes place.

How do late payments affect credit scores?

There are many reasons why parents miss out on child support payments. They could be between jobs or their income has been reduced or there could be some other reason. One of the things the parents can do during such situations is, inform the court and put a temporary pause on the child support obligation. In cases where the petitions are not filed or the parent fails to take the necessary steps, the missing payments start showing up on the credit scores. Parents who stop receiving child support can sue the other parent and if the former wins then the credit score becomes worse. Child support obligations are very important and its relation with the credit score can be a complex matter.

In any case, it better to hire a lawyer before things go out of hand. An attorney who is experienced in the field of child support obligations and credit scores can provide a better understanding on the matter.

Conclusion

Credit scores are important for getting loans or good interest rates and should therefore never have a negative result. Failure to pay for child support can negatively effect credit scores depending on how jurisdictions report such failures to pay. But there are ways to prevent negative scores and parents can follow necessary steps to ensure they don’t end up with a bad score.

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.  

3 Ways Small Business Owners Can Protect Business Assets In Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce lawyers; The Maggio Law FirmDivorce is a stressful experience, especially when it involves the division of properties, assets and businesses. For some, it is even more painful because a business is about all they have and splitting the business in two can cause a lot of financial damage. Small business owners know how tough it is to operate a business when the economy is constantly changing. Include a divorce and the stress reaches to new levels. So, what should a business owner do at times like these? They can follow three easy steps to limit the impact to their business from divorce.

  1. Maintain an amicable relationship with your ex

Nothing like a good talk between spouses when it comes to splitting businesses and assets. That’s the first thing you should do when faced with a similar situation. If your spouse is a business partner with you, it becomes even more crucial why an amicable relationship is necessary. Focus more on the business part and less on personal matters. An honest talk with your spouse can have great benefits for your business.

  1. Make prenuptial and postnuptial agreements

A prenuptial agreement is not the best gift your future spouse might be expecting from your side but it is more of a gift for your own self. It’s always better to stay optimistic about marriage. Signing a prenuptial agreement will give you the upper hand in business ownership. California is a state that has community property laws which mean that every property bought after marriage is likely to be split equally between both partners. In such cases, a postnuptial agreement comes in handy. It helps determine what part of the business each of you should own after it gets divided.

  1. Form a corporation or a trust

One of the best ways to protect the company and business assets is by forming a corporation or a trust. It’s best to incorporate the trust before you get married. It gives you sole ownership over your business and during divorce proceedings it becomes easy for you to defend it against a division.

If you form your company as a corporation or an LLC, you create a legal entity that is separately owned by you. However, if you use marital assets to pay for company expenses, it may be used to claim the company as a marital property.

By following these 3 steps, you will be able to avoid or at least minimize the damage a divorce can bring to your small business.

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.  

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.  

 
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