Financial health is among the primary concerns of many people who are going through a divorce in California. Marriage is an economic partnership as well as an emotional one. In order to come out of it in better shape, people can plan to adjust their finances once the divorce is finalized. They must move from shared expenses and households to separate living expenses. It may be necessary to rebuild net worth and savings accounts.
According to the 2018 National Retirement Risk Index, most people would require a 30% income increase to keep the same living standard following separation. Divorcing individuals should develop a comprehensive budget to guide them when they're single again. The budget should take into account income and expenses, alimony and child support payments.
There are several financial documents and accounts that may need to be updated after a divorce. Insurance policies, wills, retirement accounts and powers of attorney should reflect that the marriage has ended, and new beneficiaries should be designated.
Divorce also impacts insurance needs, and people should reevaluate the types and amounts of insurance they carry. Research by the National Center for Biotechnology shows that losing a spouse's health insurance coverage can be a major negative consequence. Divorce can also have an impact on the taxes of the individuals involved. People who pay alimony cannot deduct it under new tax rules, and people who receive it get it tax-free.
People in California who are considering divorce may wish to set up a consultation with a lawyer. An attorney who handles divorce cases might be able to help clients categorize or identify their assets and liabilities as a couple and develop a strategy for property division. A lawyer might help people prepare for child support or child custody proceedings or argue on their behalf in family court.