Many couples considering divorce may be miserable, but they remain together because of the economic difficulties of splitting their assets and their lives.
Divorce rates dropped during the recession and began to climb again when the economy improved. One of our clients and his wife had purchased a large home in Alamo when times were good; when the recession hit, he lost his great job and they lived on one salary—hers–in a home with a huge mortgage. The economic pressures destroyed what was left of their marriage, yet they couldn’t afford to get divorced, so they lived in separate camps in that huge house that they tried to sell, but no one was buying. Unfortunately, this kind of story is not uncommon. But while the economy is now stronger, couples who come in to our offices for assistance with their Divorces invariably have been thinking about this for a long time, and economics is often the primary obstacle.
Divorce often requires downsizing, including selling the family home.
There are now two households to support, and it may mean downsizing or selling the family home. But Divorce doesn’t have to be financially crippling. There’s another important factor: the emotional toll that highly contested legal battles and their financial aftermath take on the family. No one emerges unscathed from these battles, and it can leave children scarred.
Fortunately, there are alternatives.
This should be your first consideration. Even if you tried counseling and it had no lasting effect, it might be time to try another therapist. Do some research and to find someone who’s a fit for you; there’s a lot at stake.
2.Agreement on distribution of assets, custody and a parenting plan
If Divorce is inevitable, sit down and try to reach an agreement on how you’re going to split assets and debts, child custody arrangements and how you will share parenting responsibilities. If you can’t reach an agreement, hire an experienced mediator that you both trust. Mediators are results-oriented and will work with you to identify solutions.
3. Quit worrying about what you think is fair
Fair gets very subjective. Forget also about what you’ve learned from other people’s Divorces. Look at the big picture—an equitable division of property and peace and sanity for your family.
4. Don’t expect the judge to resolve your issues and defend your rights
Figuring this out is your responsibility; the legal system is not designed to address personal family issues. Your overriding concern should be your children—putting their needs first to make the transition as smooth and normal as possible is the ideal. Keeping kids in the same schools and neighborhoods creates continuity, but they also adjust to new routines.
5. Figure out when it is time to just let itgo
In the interest of time, expense, and emotional fatigue, start to get used to compromise.
6. Make a complete and accurate list of all liquid assets, income and expenses
Don’t rely on your spouse to do this for you. Gather all the information you need and then begin the process of division with your spouse. If necessary, a financial adviser can be an excellent investment. In many cases, a neutral outsider can give expert advice on the best way to decide the long-term value of retirement accounts vs keeping and maintaining the family home, etc.
7. Consider hiring an alternative organization to assist you
If you and your spouse can reach agreement on division of property and custody issues, California Document Preparers can take the sting out of the financial impact of hiring an attorney. We’ve helped more than 2,000 people get divorced, and they never have to set foot in court. We prepare the legal documents and file them. In the rare cases where people still have issues to resolve, they often find that our office environment provides the privacy and neutrality that helps them work through issues.
The year is nearly half over and it’s been a rollercoaster. A fluctuating market, rising interest rates, chaos and scandal in Washington. Here on the homefront, it’s summer, and that means baseball. But for loyal A’s and Giants fans, it seems like our favorite teams just can’t catch a break. The All-Star break has come and gone, and it it didn’t provide that spark that we hoped might occur.
Time for some good news: Important changes to Medi-Cal laws
Prior to January 1, 2017, California laws allowed Medi-Cal, California’s version of the federal Medicaid program, to recover expenses from recipients 55 or older, regardless of when their benefits were received. In the past, the state would send the heirs or survivors a claim requesting payment for the benefits paid on behalf of the deceased. Needless to say, receiving a bill from Medi-Cal while grieving the loss of a loved one was an unwelcome shock to many families.
Now, however, thanks to new amendments to the Medi-Cal regulations SB 33 and SB 833, the agency has reduced the ability to recover from those who died after January 1, 2017.
The following changes to Medi-Cal claims are now in effect:
Claims on the estates of surviving spouses and registered domestic partners are prohibited.
Claims on the estate are limited to nursing-home care and home, community-based services and hospital or prescription-drug services while receiving these services.
The state is required to waive the claim completely when the estate that is subject to recovery is a homestead of modest value—a home whose fair market value is 50% or less of the average price of homes in the decedent’s county.
Claims on life insurance with one or more named beneficiaries are prohibited (unless a probatable estate is named as the beneficiary). A probatable estate is one in which assets are held in the decedent’s name alone.
Claims on retirement accounts with one or more named beneficiaries are prohibited (unless a probatable estate is named as the beneficiary—an estate is one in which assets are held in the decedent’s name alone.)
Recovery is limited to only those assets subject to California Probate. This means that assets transferred through a Living Trust, joint tenancy, right of survivorship and life estates are no longer subject to recovery.
What this means to you: If your assets are held in a Living Trust—not in your name—they’re protected from Medi-Cal
As a Medi-Cal recipient, this meant that when planning your estate, you want to have nothing in your name at the time of your death. Having a Will is not sufficient protection. But holding property and liquid assets in a Living Trust protects these assets from recovery by Medi-Cal and ensures that your estate, for which you worked so hard, will pass to your heirs as you intended.
A young father from Alamo, “Charlie”, came in to the Walnut Creek office to get more information about our uncontested Divorce process. He wanted to know how we worked with our clients, how much the Divorce would cost and how long it would take. This is something that happens fairly often. When couples have been married for many years, getting divorced is not something they do casually, so we frequently meet with couples in an exploratory capacity to provide an overview of the process. They often go home and begin to think seriously about how they’re going to divide property and develop a parenting plan.
He and his wife, “Allison”, had been married for 15 years
Charlie and “Allison” had two children, an eight-year old daughter and a 12-year old son. Like many area couples, the pressure of working long hours, commuting and raising a family in the expensive Bay Area had taken a toll. They were spending less time together as a family, fighting a lot more, sharing fewer interests and, increasingly, living separate lives. They’d tried counseling, which had helped for a while, but they fell back into their old patterns and the animosity grew. They knew they were creating an unhealthy environment for their kids, and they were both unhappy. They decided it was time to talk about Divorce.
Equal division of property and shared custody of children
Charlie was a successful private banker at Wells Fargo in San Francisco, where he had worked for more than ten years. Allison had worked in the technology sector for many years, but had been laid off during the recession. She was now a project manager at a startup with a lot of potential, but was not currently generating a significant income. The couple’s assets include their Alamo home and a smaller vacation home in Tahoe. Both Charlie and Allison had retirement accounts. They were committed to the equal division of assets and the jointly shared custody and parenting of their two children. They knew they were fortunate to be able to rely on both sets of parents, who lived in the area, to help with the children.
Selling their home and downsizing would likely be necessary
They were still trying to figure out how they would divide their property. They were resigned to having to sell the Tahoe house, and they also realized that they would likely have to sell their Alamo home to consolidate their assets. They knew they would have to downsize, likely move to different neighborhoods and smaller homes. It was important to both of them that they remain in close proximity so they could share parenting responsibilities.
We gave Charlie and Allison our workbook, which they took home, where they would have access to account information. They also needed to work out a detailed custody and parenting plan. Charlie and Allison have agreed to no child or spousal support but are still negotiating the settlement–which well may have to wait until they sell their properties.