Getting a divorce can have a negative impact on a person's finances in many ways. However, California couples who are ending their marriage can take certain steps to avoid having their financial future adversely affected.
The Federal Reserve Board reports that the larger the discrepancy in a couple's credit scores, the greater the likelihood that they will split up within the first five years of their relationship. A SunTrust Bank survey reported that over a third of the respondents said money was a big area of conflict in their relationships. Furthermore, it is not just lack of money that creates stress in a marriage. Couples in California and elsewhere may be more likely to divorce if they are wealthy.
For Californians who divorce after the end of 2018, alimony payments will not be tax-deductible or tax-payable. This is one of several tax changes brought about by the Tax Cuts and Jobs Act, which was passed in late 2017, that could affect the finances of divorcees.
One important step that older California residents can take to lessen how much a divorce negatively impacts their retirement is to consult with a retirement specialist before they begin negotiating divorce settlement terms. A financial adviser can assist individuals with determining what type of financial resources they may need for the future and what they have to do to meet their financial goals. It is also a good idea to meet with the advisor after the divorce settlement terms have been finalized to determine how to get their new financial plan into action.
A default judgment in a divorce is a judgment entered by the court in favor of the petitioner due to the inaction of the other party in the case. However, even if a default judgment is entered, you might still be required to attend a final hearing to complete your divorce. In the event that your spouse appears at this final hearing, none of the defenses to the allegations described in your petition can be argued by him or her since an answer was not filed in the required time period and, as a result, your petition would be deemed true at the default proceeding.