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Divorce Lawyer & Family Law Attorney
The Leading San Diego
Divorce Lawyer & Family Law Attorney

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Is it Bad Timing to Start a Business During a Divorce?

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Is it Bad Timing to Start a Business During a Divorce?

Every year, hundreds of California entrepreneurs set their sights on starting a new business, driven by dreams of success and financial independence. When launching a new venture, thoughts of divorce may be the last thing on your mind, especially if you aren’t even married yet. However, it’s important to consider what could happen to your business if you do find yourself facing divorce down the road.

On the other hand, if you are currently in the midst of a divorce, you might be wrestling with a crucial question: should you put your entrepreneurial aspirations on hold until the divorce is finalized? What could happen if you prefer to not wait?

At the Law Office of Renkin & Associates, we have represented many California business owners going through divorce. In this blog, we will go over this state’s community property laws, how they can impact business ownership, and how an experienced San Diego divorce lawyer can help.

California’s Community Property Law Explained

California is one of nine states that follows community property laws when it comes to the division of assets during a divorce. Under this law, any property or assets acquired by either spouse during the marriage are generally considered community property, which means they are jointly owned by both spouses in equal shares, regardless of who earned or acquired them. 

During a divorce or legal separation, community property is divided equally between the spouses. Each spouse generally has a right to half of the value of the community property, including businesses, real estate, investments, and other assets. However, there are exceptions to this rule, and not all assets acquired during marriage automatically become community property. They include property inherited by or gifted to one spouse only.

What if You Started Your Business Before Getting Married?

If you started your business before getting married in California, it would generally be considered separate property rather than community property. Depending on the business, the length of the marriage, and other factors, there may be community property in your separate property business. However, there are some steps you should take to maintain its separate property status:

  • Keep Finances Separate: It’s crucial to keep your company finances entirely separate from any joint marital finances. Commingling funds can potentially blur the line between separate and community property.
  • Maintain Clear Records: Accurate and well-documented financial records for your business can help establish its separate property status. Keeping track of business-related transactions and investments can strengthen your case that the company is solely yours.

If you’re planning to get married, a prenuptial agreement can help clarify several crucial matters related to your business and its treatment during a divorce:

  • Business Ownership: You can specify in the agreement that the business you established before the marriage will remain separate property and not be subject to distribution in the event of a divorce.
  • Business Appreciation or Depreciation: The agreement can address whether your spouse will share in any appreciation or depreciation of your pre-marital business that occurs during the marriage.
  • Methodology for Business Valuation: You can determine in the agreement the method to be used for valuing the business at the time of divorce, ensuring a clear and cooperative approach.
  • Ownership Interest and Business Dissolution: In cases where both spouses have ownership interests in the business during the marriage, the agreement can address what will happen in the event of divorce. This includes options such as one spouse buying out the other, selling the business and distributing the proceeds, or maintaining the business partnership despite the dissolution of the marital partnership.

By incorporating these considerations into a well-crafted prenuptial or postnuptial agreement, you can proactively protect your business interests, minimize potential conflicts during a divorce, and provide a clear framework for the division of assets and business ownership. 

What to Expect if You Start a Business While Married

If you started the business during the marriage, it would generally be considered community property in California, regardless of who was more actively involved in its operations. This situation can lead to several considerations and potential challenges:

  • If you and your spouse started the business together and are both actively involved in its management, you will need to decide whether you want to be the one to continue running the business after the divorce. This decision may be influenced by your passion for the business, your expertise in its operations, and your willingness to take on the responsibilities of sole ownership.
  • As community property, the business’s value will need to be assessed and divided equally between you and your spouse. Valuing a business can be complex and may require the expertise of a business appraiser to accurately determine its fair market value.
  • If you wish to retain control of the business, you will likely need to buy out your spouse’s share of the business’s value. This process involves compensating your spouse for half of the business’s worth, which could be through cash, assets, or other property of equivalent value.

If you and your spouse have a prenuptial or postnuptial agreement that addresses the division of the business in case of divorce, it can provide guidance and potentially simplify the process.

Considerations When Starting a Business During Divorce

If you’re thinking about starting a business while your divorce is in progress, speak to your lawyer. You may be better off waiting until the divorce is finalized before making such a big move.

While starting a business may seem like an opportunity for financial independence and personal growth, it’s crucial to be aware of the potential risks. An attorney who represents business owners can help you understand the legal implications, protect your interests, and ensure proper business structuring to minimize potential conflicts.

Is My Spouse Entitled to Any Profits After Our Divorce?

If the business was started and generated profits during the marriage, it would typically be considered community property unless a prenuptial or postnuptial agreement states otherwise. As a result, your spouse may be entitled to a share of the business profits accumulated during the marriage, even if they were not directly involved in running the business.

It’s important to note that the community property interest in the business profits is calculated from the date of marriage to the date of separation. Any profits earned after the date of separation are typically considered separate property and not subject to division but are part of the value of the business which will be included in the buyout from the business.

To protect your business interests and ensure a fair division of assets during the divorce, it’s essential to seek legal counsel from a California family law attorney. They can clarify the community property laws, assess the value of the business profits, and help you work toward an equitable resolution.

Questions? Speak to a San Diego Divorce Lawyer Today

Business owners facing divorce can encounter complicated legal considerations and potential challenges. Understanding California’s community property laws and how they apply to your business is crucial to safeguarding your interests.

At the Law Office of Renkin & Associates, we have helped many California business owners navigate divorce. Whether it’s clarifying property rights, valuing the business, or addressing business ownership during divorce, we are committed to providing the representation and support you need during this challenging time. For more information or to schedule a consultation, call 619-304-4760 or contact us online.

How Long Do Spousal Support Payments Last in CA?

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Spousal Support

Spousal support has been a regular part of a California divorce settlement agreement for a very long time. Many spouses have given up full-time employment after marriage to raise a family, and alimony has been a way to minimize the financial consequences of divorce at a time when one spouse was the primary breadwinner.

Although it is not as common as it used to be, California courts can and will still order spousal support when appropriate, so that a lower-income spouse can maintain their pre-divorce lifestyle until they acquire the skills or training needed to do so on their own. Men can also apply for alimony, although the majority of those requesting it are still women.

As San Diego divorce lawyers, we’re often asked how long spousal support payments last in CA. Although every divorce is different, there are a few common factors that courts take into account when determining the duration of an alimony award.

Factors Impacting Spousal Support in California

Several factors influence the determination of spousal support payments in California. These factors are considered to ensure fair and just outcomes:

Duration of the Marriage: The length of the marriage is a crucial factor. In general, longer marriages tend to warrant higher support payments.

Income and Earning Capacity: The court assesses both spouses’ income and earning potential to determine the appropriate amount of spousal support.

Standard of Living During Marriage: The lifestyle enjoyed during the marriage is taken into account to maintain a similar standard of living for the dependent spouse.

Age and Health: The age and health of each spouse are considered, as health issues may impact their ability to support themselves.

Assets and Debts: The court examines the assets and debts of each spouse, including property, investments, and liabilities.

Contributions to the Marriage: Non-financial contributions, such as child-rearing and homemaking, are also valued when calculating spousal support.

An experienced California alimony attorney can help you and your spouse negotiate an arrangement that meets the immediate and foreseeable financial needs of both parties. 

What Factors Impact the Duration of Spousal Support?

When determining alimony payments, a family court will consider the length of the marriage. In California, spousal support may be paid for up to half the length of a marriage that lasts 10 years or less. Unions that lasted longer than 10 years are considered ‘long term,’ and no specific duration will apply. If the parties were separated at any point prior to divorce, the length of each separation period may be taken into account when deciding on a support award.

There are two types of alimony typically awarded in a California divorce:

  • Temporary: This form of alimony is paid during the divorce process and ends once the judge awards a more permanent order. It is usually provided to a spouse in need of financial assistance during a divorce.
  • Permanent: This award is made after the divorce is finalized. It is important to note that ‘permanent’ doesn’t normally mean for life. For marriages lasting fewer than 10 years, it may be paid for up to half of the marriage length. (For example, four years for an eight-year marriage.) For marriages 10 years or longer, the court cannot eliminate spousal support but can set it at zero.

In the end, it’s impossible to predict how long spousal support payments will last in California. Your divorce attorney can assist you in negotiating an alimony arrangement that is fair and fits your financial circumstances.

Can I Modify a Spousal Support Order?

In general, a spousal support order can be modified unless both parties previously agreed that it may not be modified or revoked. In addition, awards of a fixed duration cannot be modified/extended once the deadline has passed.

In California, the duration of spousal support payments largely depends on the length of the marriage. Generally, for marriages lasting under ten years, support may last for half the marriage’s length. However, for longer marriages, the court may not set a definite termination date. Amidst the complexities of spousal support, consider the 300 free chip opportunity https://casinowis.com/300-free-chip-bonus as a brief respite, offering free play in various online platforms. Always seek legal advice to fully understand your obligations and rights.

The court may only modify your spousal support order if the party seeking modification can demonstrate a material change in circumstances since the last order. The change must be substantial and material, such as a decrease in income. In this example, the court may temporarily decrease the support payments until you find a new job.

Can I Terminate a Spousal Support Order?

As long as you can demonstrate a legally acceptable change in circumstances, you may be able to fully terminate your obligation to make alimony payments, unless the order was made non-terminable at the time it was issued. Conditions that may warrant a termination include:

– A decrease in your income that is out of your control, such as serious illness
– You are over 65 and wish to retire
– Your former spouse has increased their income
– Your former spouse has remarried

Furthermore, a support obligation automatically terminates upon the death of the supported spouse. Their estate cannot enforce the alimony order to its own benefit if they die before the payment obligation ends.

What is a Gavron Warning?

A Gavron Warning is essentially a court notice advising supported spouses that they are expected to become self-supporting within a reasonable amount of time. The goal is to prevent them from relying indefinitely on their former spouse to support them.

The Gavron Warning gets its name from the case Marriage of Gavron, decided in 1988 by the Second Appellate District Court of California. The court ruled that before modifying or terminating a spousal support order, the supported party must be informed of their obligations to become self-sufficient. Around this time, courts began to move away from the idea of permanent spousal support orders in favor of the requirement that supported spouses make efforts to become self-sufficient.

Speak to a Spousal Support Lawyer Today

When you’re requesting or being asked for spousal support, it’s natural to wonder how long alimony payments last in CA. At the Law Offices of Renkin & Associates, we can answer your questions and assist you in obtaining, modifying, and terminating spousal support orders. For more information about our family law practice or to schedule a consultation, please contact us.

See also: Is it Bad Timing to Start a Business During a Divorce?

The 5 Stages of Grief in a Divorce

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At Renkin Law, we understand that going through a divorce can be an emotionally challenging and complex process. Divorce not only affects the legal aspects of a marriage but also has a profound impact on the emotional well-being of the individuals involved. It is essential to grasp the concept of the 5 stages of grief during a divorce to navigate this difficult journey with greater understanding and resilience. In this comprehensive guide, we will explore each stage in detail and provide valuable insights into coping mechanisms, legal considerations, and emotional support.

The Five Stages of Grief in a Divorce

The “Five Stages of Grief” are well-known. These stages (according to Grief.com) are listed below. As you can see, it is possible to attribute each step to your emotions and healing during the divorce process, creating five stages of divorce, too.

Stages of Grief in a Divorce - Chart of Denial, Anger, Bargaining, depression, AcceptanceDenial

The initial stage of grief in a divorce often begins with denial. It is common for individuals to feel overwhelmed and refuse to accept the reality of the impending separation. During this stage, emotions can fluctuate dramatically, and it is essential to remember that experiencing denial is a natural response to such a significant life event. Seeking professional guidance from a therapist or counselor can be immensely beneficial during this phase.

Anger

As the reality of the divorce sinks in, feelings of anger may arise. It is vital to recognize that anger is a normal part of the grieving process and not to suppress these emotions. Instead, channeling anger into healthy outlets such as exercise, journaling, or seeking support groups can be constructive. Our experienced legal team can also assist in managing legal complexities during this emotionally charged phase.

Bargaining

During the bargaining stage, individuals may attempt to find ways to reconcile or negotiate with their partner in hopes of saving the marriage. This phase can be particularly challenging, as it often involves intense self-reflection and vulnerability. We advocate open communication with your legal representation to explore all available options while offering compassionate guidance throughout the process.

Depression

The depression stage is marked by overwhelming sadness and a sense of loss. Coping with depression during a divorce requires a strong support system, which may include family, friends, and mental health professionals. Our team recognizes the importance of empathy and understanding during this phase and can recommend resources to help you cope effectively.

Acceptance

The final stage of grief in a divorce is acceptance. While it may take time, acceptance allows individuals to begin healing and moving forward with their lives. Embracing this stage does not mean forgetting the past but rather acknowledging the reality of the situation. Our legal expertise can guide you through the necessary steps to finalize the divorce, ensuring a smooth transition into the future.

Legal Considerations during a Divorce

Divorce involves various legal aspects that require careful consideration and expert guidance. Some of the essential legal considerations during a divorce include:

Division of Assets
The equitable distribution of assets can be a complex process, especially when significant assets are involved. Our team has a thorough understanding of property division laws and can help protect your rights and interests.

Child Custody and Support
Child custody and support arrangements are crucial factors in divorce cases involving children. We prioritize the best interests of the child and work tirelessly to achieve fair and favorable custody and support agreements.

Alimony or Spousal Support
Determining alimony or spousal support requires a careful evaluation of various factors. Our legal team can provide valuable counsel in negotiating or litigating alimony matters.

Legal Documentation
From filing divorce petitions to drafting settlement agreements, legal documentation plays a critical role in divorce proceedings. We ensure all necessary paperwork is accurately prepared and filed, preventing unnecessary delays or complications.

Coping Strategies for Emotional Well-being

Aside from the legal considerations, it is vital to prioritize your emotional well-being during a divorce. Here are some coping strategies to consider:

Seek Professional Counseling
Professional counseling can provide a safe space to process emotions, gain insights, and develop coping mechanisms. A licensed therapist or counselor can be an invaluable resource during this challenging time.

Engage in Self-Care
Practicing self-care is essential in promoting emotional resilience. Engage in activities that bring you joy, relaxation, and a sense of fulfillment, whether it be spending time with loved ones, pursuing hobbies, or taking time for self-reflection.

Join Support Groups
Connecting with others who are going through or have experienced divorce can be highly beneficial. Support groups provide a sense of community, understanding, and valuable advice from individuals who can relate to your situation.

An Experienced Divorce Attorney Can Help Throughout the Process

As you can see, there are many emotions associated with divorce. Because of these emotions, you need to have people you can count on to help you as you move through the process. If you are located in or around San Diego County, California, the team at the Law Offices of Renkin & Associates can help. Our knowledgeable and caring divorce lawyers can work with you every step of the way—helping you reach acceptance and begin the healing process. We look forward to helping you during this trying time.

Can I Change Attorneys In The Middle Of My California Divorce?

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Can I Change Attorneys In The Middle Of My California Divorce?

When you’re facing divorce, you want to work with an attorney who is responsive, understands your goals, and will use their experience and expertise to help you leave the marriage with the resources you need to start over. 

While most divorce lawyers do their best for their clients, others fall short of the mark. If you find that you are not getting the attention and quality representation you deserve, you may be wondering, “Can I change attorneys in the middle of my California divorce?”

At the Law Office of Renkin & Associates, we have helped many clients who encountered problems with their original divorce lawyers. In this blog, we go over common reasons why the attorney-client relationship can go sour and what you should know if you’re thinking about changing lawyers before the divorce is finalized.

Can You Change Attorneys in the Middle of a Divorce in California?

Generally speaking, you can change your divorce attorney at any time. Retainer agreements cannot require you to remain with your attorney indefinitely, especially if you feel that the relationship is no longer working. During such a major change, it’s important to have a legal advocate you can trust to help you reach the next stage in your life.

Are Your Expectations for Your California Divorce Realistic?

If you’re thinking about switching to another lawyer, it’s important to ask yourself why you feel there’s a problem. Were you hoping that the process would be concluded more quickly, so that you can put the past behind you and move forward? Depending on the circumstances, the marriage dissolution process in California can take longer than expected. Contested divorce cases in particular can take months or even years to resolve.

Ask yourself the following questions:

  • Did I hope that the divorce would take a month at most?
  • What were my expectations? If you’re seeking sole custody, your spouse may not readily agree.
  • When the hearing or trial begins, do I expect my lawyer to win every issue?

Changing attorneys won’t solve the problem if you answer “yes” to any of these questions. While you’re always able to get a second opinion from another lawyer, it’s possible that changing counsel will not yield a different outcome. Expressing your concerns to your current attorney can help you better understand the divorce process and determine whether a change is really necessary.

Signs That Your California Divorce Attorney May Be the Problem

If you have realistic expectations but still harbor concerns over how your case is going, your attorney could be the issue. Here are some signs that they are not acting in your best interest:

  • Making promises and then not keeping them
  • Failing to return your calls or emails within a reasonable time period
  • Not keeping you informed about your case
  • Missing court appearances
  • Constantly asking for continuances because they aren’t ready to move forward
  • Being verbally aggressive when you question them
  • Ignoring your request for an invoice, bill, or statement of charges so you can see where your money is being spent

Other viable reasons for changing your divorce lawyer include a disagreement on strategy or a simple personality clash. While these challenges aren’t necessarily anyone’s fault, they can hinder the progress of your case, and you may be better off working with a lawyer whom you’re comfortable working with and who understands and supports your goals.

Things to Consider if You  Want to Change Attorneys in the Middle of Your California Divorce

Changing lawyers in the middle of a case, even when warranted, involves certain considerations you’ll want to understand and prepare for.

First and foremost is the extra cost involved. While your first attorney shouldn’t continue to bill you following formal withdrawal, the new lawyer must catch up with your case. You will need to provide them with all the documents and court filings related to your case and pay them to review everything. 

This won’t be a problem if your divorce is fairly straightforward or has only been in progress for a couple of months. If your case is complicated, involves many documents, and has been pending for some time, getting your new lawyer up to speed can be more expensive, but it can be money well spent when you’re comfortable with your new representation.

Another thing to consider is a potentially negative reaction from the court. Some family law litigants change counsel as a stalling tactic, usually to spite the other side, and an attorney can file a motion for sanctions if they feel the other side has changed counsel to stall the proceedings. This doesn’t happen often, but it’s always a possibility.

If your spouse’s attorney takes this step, don’t be alarmed: you can simply explain that your interests were better served by hiring a different lawyer. Your new counsel can handle the matter on your behalf.

Sometimes Both of You Agree a Change is Needed

There are times when both the client and attorney agree that a change is necessary to further the client’s interests. 

In some cases, the attorney does not have an efficient working relationship with opposing counsel. A divorce case could lose focus and become more expensive if the relationship between attorneys becomes adversarial. Changing counsel can give a family law case new direction and focus in such situations.

How to Change Divorce Attorneys in California

If you’ve decided to switch lawyers, start by retaining a new divorce lawyer, so that you aren’t left without legal representation. Sign an agreement with your new attorney and inform them about any upcoming hearings and filing deadlines.

The next step is to end the relationship with your current lawyer. You can dismiss your attorney in writing or in person, but even if you do so in person, you should also write a letter of termination that clearly states the following:

  • The date you wish to end the professional relationship 
  • The name and contact details of your new divorce lawyer
  • You want all material pertaining to your case to be sent to your new lawyer by a certain date
  • You wish to receive all outstanding bills, verification of your retainer balance, and a date when you will receive it

Your new divorce lawyer will notify the court that you have changed counsel and want them to represent you moving forward. This document must also be provided to your mediator if you are using one.

How to Find the Right California Divorce Attorney

When you’re looking for a divorce attorney in San Diego and the surrounding area, start by reviewing their websites and confirming that they handle cases like yours. For example, if you are a service member, you’ll want to work with a lawyer who understands the intricacies of divorce in the U.S. military. If your marital estate is worth millions, you should look for someone who represents high-net-worth clients.

The next thing to check for is client testimonials. Has this lawyer or their law firm done a good job with past clients? Do they actively encourage client feedback by leaving an input form on their site? Reviews are one of the main things. For example, if you have a negative attitude towards gambling entertainment, then after reading positive reviews the vision on them may change, and the registration on the website of the virtual casino Pin Up https://casinopinup.com.tr will help change your view of them. After all, you will be offered a real chance to win when playing high-quality and licensed slots with great returns. As well as generous bonus offers from the operator of online gambling club Pin Up, which really can be won back, without spending all the money in the world to meet the conditions of the vejger.

If the reviews look positive, call the firm and schedule a consultation. Are you welcomed and treated with respect over the phone? If so, that’s another good sign, as successful divorces are usually a team effort. Finally, when you speak to the attorney, do they seem interested in knowing what you want as opposed to what they think should happen? If the answer is yes, you may have found the advocate you need to help you start over.

Do You Need to Change Attorneys During Your California Divorce?

You may choose a lawyer in good faith, but find midway through your divorce that they are not right for you. They may want to use a strategy you’re not happy with or you may feel like they aren’t listening to you. This shouldn’t discourage you, since you’re not legally bound to the first attorney you hire.

At the Law Office of Renkin & Associates, we understand that your interests may be better served by changing lawyers. We can smooth the process for you by communicating with your former attorney to obtain your files and informing the court and your spouse’s counsel that you have new representation. We will also listen to your goals and give your divorce matter the dedicated attention it deserves. To learn more or speak to a San Diego family law attorney, please call 619-304-4760 or request an appointment online today.

See also: Is it Bad Timing to Start a Business During a Divorce?

What is Bifurcation in Divorce and How to Get One?

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What is Bifurcation in Divorce and How to Get One

You want to resolve your divorce as quickly as possible, but you and your spouse aren’t agreeing on key terms of the divorce settlement agreement. In these situations, a bifurcation divorce can end your marriage while outstanding issues are still being resolved, allowing you to move forward sooner.

At the Law Offices of Renkin & Associates, we can advise you on whether you qualify for a bifurcation divorce and guide you through the necessary steps if you do. In this blog, we answer all your questions about this dissolution option and explain how a divorce lawyer at our firm can help.

What is a Bifurcation Divorce in California?

There’s more to divorce than ending a marriage. In most cases, couples also need to divide community property and debts, reach an agreement on child custody and support, and determine whether alimony (spousal support) is warranted. Until these details have been addressed, a divorce can’t be finalized, and in some cases they can take years to settle.

California’s Family Code allows divorcing parties to begin their new lives sooner by requesting bifurcation, which essentially means to split something. Through this process, a judge can grant a divorce by treating it as a separate matter from custody and property division. Once a bifurcation divorce goes through, your marital status is terminated while you continue to exercise your rights in settlement negotiations.

While most people think of marital status as the only issue that can be bifurcated in a divorce, the truth is that there are 12 other areas. They are as follows:

  • A postnuptial or premarital agreement’s validity
  • Separation date
  • Valuation date for ‌assets
  • What constitutes separate versus community property
  • Allocating an increase in the ‌value‌ ‌of‌ ‌a‌ ‌business
  • Value or existence‌ ‌of‌ ‌business‌ ‌or‌ ‌professional‌ ‌goodwill
  • Child custody and visitation
  • Child or spousal support
  • Attorney’s fees and legal costs
  • Property and debt division
  • Claims for reimbursement
  • Family law issues specific to the‌ ‌case.

Benefits of a Bifurcation Divorce

Most people seek a bifurcation divorce because they want to remarry sooner. Although California observes a mandatory six-month waiting period before a divorce can be finalized, this can be a lot less than the time it takes to settle disputes over child custody and support or property division. Other common reasons for seeking a bifurcation divorce include:

  • Faster Divorce: Sometimes one spouse refuses to compromise on key issues because they want to delay the other spouse’s remarriage or they simply don’t want the divorce to begin with. Bifurcation prevents one party from being held back by the other’s stubborn or manipulative behavior. A spouse who is inclined to be difficult may also realize that divorce will happen whether they want it or not, and refrain from aggressive behavior.
  • Bankruptcy: If you or your spouse file for bankruptcy, you can motion for bifurcation so that the divorce can proceed while the bankruptcy details are being finalized. 
  • Also have a psych or emotional effect of the fighting spouse or spouse that does not want the divorce to come to grips that the divorce is going to happen and someone holding on may let go of the marriage sooner. MAYBE.

How to Get a Bifurcation Divorce in California

In‌ ‌California,‌ ‌you‌ ‌have to wait at least six months after the Petition for Dissolution was served before you can request a bifurcation of marital status. If you file a motion sooner, it will likely be denied or, if granted, your status won’t legally change until the waiting period is over.

To get started, you must file and serve Declaration of Disclosure documents on your spouse. This preliminary disclosure includes all the financial details that need to be disclosed in a divorce, such as assets, debts, income, and expenses. Once that is complete and the proof of service is filed, you can ‌request‌ a ‌bifurcation. 

After you file the motion with the court (and send copies to your spouse), you and your attorney will appear before the judge, who‌ ‌will‌ likely grant the request unless your spouse presents a compelling reason why it should be denied. 

Keep in mind that most bifurcation divorces are granted: courts have long acknowledged that forcing two parties to stay married serves no valid purpose, and in the 1988 case Gionis v. Superior Court, it was noted that no divorce should be delayed simply because a decision was yet to be made on matters such as support, child custody, property division, and attorney fees. 

If your motion for a bifurcation divorce is granted, you may be required to agree to certain conditions meant to protect your spouse from damages if you die after the marriage is bifurcated but before the other matters are finalized. In California, those conditions include:

  • Health Insurance: If you maintain health insurance for your spouse, you must continue to do so. Should that not be possible, you must cover medical costs incurred or pay for insurance comparable to the former policy, which will likely be a lot more expensive.
  • Indemnification for Loss of Death Benefits: If one of you has an employer-sponsored pension or retirement plan, the other receives indemnification for the loss of death benefits.
  • Tax Consequence Reimbursement: The opposing spouse must be reimbursed for tax consequences or loss of the right to claim family allowance or probate homestead.

If you want to file for bifurcation, it’s critical to speak with an experienced California divorce lawyer who can explain your obligations and help you determine whether a bifurcation divorce is the best option for you. 

Are There Any Down-Sides to Bifurcating Your Divorce?

Terminating a marriage early can have unexpected consequences. For example, under federal law marriages must last for at least 10 years in order for one spouse to claim Social Security benefits based on the other spouse’s employment history. There may also be tax consequences depending on what your spouse did and/or how your children are seen through the tax liens. A divorce attorney at the Law Offices of Renkin & Associates can help you look at your divorce situation from all angles so that you make an informed decision.

Do You Have Questions About Divorce Bifurcation?

If you want to bifurcate your divorce, you’re probably eager to move on with your life as quickly as possible. At the Law Offices of Renkin & Associates, we have decades of combined experience in the California divorce process and can help you end your marriage as efficiently as possible. Our skilled attorneys have helped many clients use bifurcation to terminate their marital status and welcome the opportunity to do the same for you. To learn more or schedule a consultation, please contact us.

See also: Is it Bad Timing to Start a Business During a Divorce?

What Can I Do If My Spouse Is Not Responding To Divorce Papers In California?

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Not Responding To Divorce Papers

A lot of California divorces are uncontested. Both spouses acknowledge that the relationship is over and work together to decide key issues like child custody and support, property division, and alimony. Sometimes a divorce becomes contested when there’s a disagreement in any of these matters, but ultimately resolution can be achieved through negotiation or litigation.

When your spouse doesn’t respond to divorce papers after they’re served, things get a lot more complicated. Perhaps they don’t want the divorce and hope that their silence will hinder or prevent the process. Maybe they’re trying to evade responsibilities that come with divorce, such as child support and property division. In either case, will it hold up your divorce? What can you do?

At the Law Offices of Renkin & Associates, we have supported a lot of clients in this position. While stressful, we can assure you that it will not prevent your divorce from going through and can even cause future problems for your spouse. An experienced California divorce lawyer can guide you through the process of obtaining what’s known as a default divorce. 

What is a True Default Divorce in California?

In this state, respondents have up to 30 days after the date of service to respond to a divorce petition unless they receive an extension. If they don’t acknowledge the papers, it won’t stall the case. Instead, the spouse who filed the petition will be granted what’s called a ‘true default divorce.’

California courts will acknowledge and approve a true default divorce if the following are all true:

  • The spouse who received the divorce petition and summons fails to respond.
  • More than 30 days have passed without a response.
  • There is no written agreement outlining the terms of a divorce settlement.
  • Your‌ ‌spouse‌ ‌is‌ ‌not‌ ‌an‌ ‌active‌ ‌duty‌ ‌military‌ ‌member
  • You are only requesting those items listed on your FL-100 Petition.

When this happens, that spouse has given up their right to have a role in the outcome of the divorce case. You can go ahead with the marriage dissolution and, in most cases, get what you are seeking in the divorce petition without intervention from your non-responsive spouse.

How is Default Divorce Different From Uncontested Divorce?

An uncontested divorce occurs when both parties agree on the four main issues of potential dispute: child custody, child support, asset and debt division, and‌ spousal support. Once you and your spouse have negotiated each area and reached an accord, all of these details go into your divorce settlement agreement. The judge reviews the terms and signs your judgment, usually without a hearing. The whole process is generally amicable and low-stress.

With a default divorce, there is often some degree of hostility or malice on the part of the spouse who is not responding to divorce papers. They may not have been properly served because they moved or changed jobs without telling you. Even if they were served, they try to make things difficult by refusing to cooperate. In some cases, illness or a break in communication may result in them being unaware of the divorce, but this is not the norm.

It should be noted that California has a type of default divorce where your spouse signs a divorce settlement agreement but doesn’t file a response to the petition. This is not the same as a ‘true’ default divorce. Instead, courts treat this type of case as an uncontested divorce.

What if My Spouse Evaded the Process Server?

In California, you may be able to get a default divorce even if your spouse was not personally served with a copy of the complaint. If it’s apparent that they are deliberately evading service of process, the court may allow you to use an alternate means of service, such as via certified mail or publication in a newspaper. If your spouse doesn’t respond, you can go ahead with the default divorce process, even if he or she never saw the letter or published notice. Your San Diego divorce lawyer can help you seek approval for alternate means of service.

How to Proceed With a Default Divorce

If your spouse is not responding to divorce papers, your California divorce lawyer can help you proceed with a default divorce. You should use the court’s judgment checklist available online but It starts by completing and filing several documents, including:

  • Declaration of a Default Divorce
  • Request to Enter a Default divorce judgement
  • Judgment Form
  • Notice of Entry of Judgment Form

If you have no children and don’t require spousal support, you may be able to get a default divorce without going to court. If decisions need to be made regarding custody and support, you and your family law attorney will attend a default hearing where the court will make a ruling on these matters. You will also need to schedule a hearing if you are requesting:

  • Supervised or no visitation
  • A specific amount of spousal support, particularly with a marriage of longer duration
  • Unequal division of property

If a default divorce has already begun, it is ‌difficult‌ ‌for‌ ‌a‌ ‌defendant‌ ‌to‌ ‌regain‌ ‌their‌ ‌rights. ‌Unless your spouse responds, your divorce will be granted as per your wishes since your spouse was not present‌ ‌to‌ ‌contest‌ ‌anything. ‌Even if they claim they never received the petition or didn’t know you filed for divorce, it can be difficult to revoke the divorce once the courts have finalized it.

Advantages and Disadvantages of a Default Divorce

Like any other process, default divorce has its advantages and disadvantages, all of which should be considered before going this route.

On the plus side, you save time and money because there are no drawn-out negotiations or long trials over contested issues. You also won’t miss time at work to attend multiple court hearings.

However, there is always a risk that your spouse will regret their unwise decision to ignore the divorce papers or honestly find out that the default divorce occurred. Although there is no guarantee they will succeed, they may try to petition the court to set aside the judgment and rehear the case which is likely to be granted. 

Even if too much time has passed for the default divorce to be set aside, some aspects can still be modified, such as child custody and support and spousal support. Always contact your San Diego divorce lawyer if your former spouse tries to challenge the divorce or its conditions after it has been issued.

Is Your Spouse Not Responding To Divorce Papers?

When you want to move on with your life, your spouse’s stubborn refusal to acknowledge divorce papers can be incredibly frustrating. Fortunately, there is still a way forward.

At the Law Offices of Renkin & Associates, we provide the legal representation you need to obtain a default divorce that lets you start over on solid ground legally and financially. Let us help you through this challenging time in your life, so you can embrace a better future. For more information about your rights during divorce or to schedule a consultation, please contact us.

In California, What is a Divorce Judgment?

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In California, the divorce process can take months or even years, depending on whether you have children, the size and complexity of the marital estate, and whether there is a dispute that requires litigation to resolve. For example, if you and your spouse have only been together a couple of years and have no children, your case will be less complex than that of a couple with a large family and significant assets and/or debts.

Regardless of how long the process takes, it will conclude with an entry of judgment, which is when the court signs and delivers the final divorce judgment, which is sometimes known as a divorce decree. This is when your divorce becomes final. 

As San Diego divorce lawyers, we have helped many clients move through their dissolutions and receive this essential document, which leaves both spouses free to begin new lives. In this blog, we explain California divorce judgments in-depth and the nature of your divorce can impact yours.

Is Your Divorce Contested or Uncontested?

Divorce in California can be contested or uncontested. Below is an overview of the main differences between these two dissolution options.

Contested Divorce

A contested divorce is when you and your spouse disagree on one or more of the major issues. They include child custody and visitation, child support, spousal support (alimony), and the division of marital assets and debts. 

If, for example, you both agree on how all marital property will be divided but your spouse is unwilling to pay alimony until you are financially independent, your divorce will become contested and the support issue will have to be litigated. After the court makes a decision on the matter, the result will become part of the final divorce judgment.

Uncontested Divorce

Uncontested divorces are simpler and less expensive. When you and your spouse agree on child custody and support, property division, and other crucial issues related to your divorce, you can retain control over the outcome, and the terms outlined in your divorce judgment will reflect your wishes, not the best intentions of the court.

The California Divorce Judgment Explained

The court will issue a judgment of dissolution of marriage outlining the terms of your divorce. The marital settlement agreement attached to the judgment will detail all the terms of the divorce including the division of assets and debts, child support, child custody, visitation, and spousal support. 

As we stated at the beginning, it becomes effective as soon as the judge signs it. Although the court clerk still has to record the judgment and stamp the documents, you are officially divorced on the date of the judge’s signature, not when the clerk adds it to the record.

It is important to note that under California Family Code Section 2339(a), you cannot finalize the divorce until six months after the date the responding spouse was served with the summons and petition for divorce or the date they appeared, whichever happens first. This means that even if the judgment is entered before this six-month period is up, you have to wait to finalize the divorce. Your San Diego divorce lawyer can explain the impact of this waiting period.

Once the divorce is final, there are steps you’ll need to take, some of which will be addressed in the divorce judgment: 

  • If the judgment says that only one of you will own a motor vehicle you used to share, you must complete and file the Department of Motor Vehicles (DMV) form, Notice of Transfer and Release of Liability to change the title to the vehicle. Keep a copy for your records.
  • Inform your employer so they can change your income tax withholding status or the beneficiary of any employee benefits. Your employer will also send your former spouse information regarding the cost of continued coverage.
  • Close all credit cards listed in both spouses’ names and open a new one in your name only.
  • Changing the beneficiary on your will, life insurance policy, bank accounts, etc.

The terms of the judgment regarding property division, child custody, child support, and spousal support are binding on the parties. Failure to comply with court orders can result in serious consequences. 

For example, when support payments are not forthcoming, a court can order wage garnishments or other actions to seize assets from the payer. If a court finds a spouse in contempt for not following its order, jail time may be a potential punishment.

Notice of Entry of Judgment

A copy of the notice of entry of judgment will be mailed to both you and your spouse, informing you that the divorce has been finalized. You should maintain a copy of this document as proof of your divorce, in case you ever want to remarry. In addition, you may want to observe the date you receive this notice since this will determine how long you and your spouse have to appeal the judgment.

How Does a Divorce Judgment Affect Temporary Orders?

While their divorce is pending, many spouses seek temporary (pendente lite) orders to address issues like spousal support, child custody, child support, and possession and control of assets such as a home. Once the judge signs your divorce judgment, all prior orders are automatically superseded. 

This is the case even if the judgment does not address any issues previously covered by court orders or terms of settlements. It is therefore essential that all prior orders be incorporated into the judgment if you want any of them to remain enforceable.

What if You Disagree With Your California Divorce Judgment?

If you or your spouse disagree with the judgment, you may want to appeal. Typically, a party has 60 days to appeal after receiving the notice of judgment entry, or 180 days to appeal if they did not receive the notice. A spouse will forfeit their right to appeal if they fail to file a timely notice of appeal. Normally, when an appeal is filed, jurisdiction is transferred to the appellate court, except for matters such as custody and child support, where the trial court retains jurisdiction.

If you believe that your divorce judgment is unfair, you may also motion for some or all of it to be set aside if you can prove that the outcome was materially affected by one of the following factors: 

  • Mistake: If there was a mistake in a stipulated or uncontested judgment, it may be grounds for setting the divorce aside. A mistake suit must be filed within one year of the date the judgment was entered.
  • Perjury: False statements in the preliminary or final declaration of disclosure or income and expense statement are grounds for setting aside a divorce judgment. An action or motion must be brought within one year of when you discovered or should have discovered, the perjury.
  • Fraud: There was a material misrepresentation of fact that prevented you from fairly litigating your divorce. An action for fraud must be brought within one year after you discover or should have discovered, the fraud.
  • Failure to Disclose: If your spouse fails to comply with disclosure requirements, the divorce can be set aside. Your complaint must be brought within one year of when you discovered or should have discovered, the noncompliance.
  • Mental Incapacity: The judgment can be set aside if one party was unable to fully litigate their case due to some mental impairment. A motion must be filed within two years of the date of judgment.
  • Duress: With duress, you are forced to act against your will by means of violence or threats of violence. After a judgment has been entered, an action based on duress must be filed within two years.

A court will only set aside parts of a divorce judgment that are materially affected by one of the above grounds. A court may, however, set aside an entire judgment if the facts indicate that doing so would be necessary in order to ensure an equitable and just result.

What if You Want to Change a Custody or Support Arrangement?

Under the right circumstances, parents can establish new agreements regarding custody/visitation and support. A child custody attorney can explain the process, help you formalize the new arrangements, and file the updated agreement with the court. If you and the other parent cannot agree but you still want to seek a different order concerning your children, you and your lawyer can ask the court to modify the current one.

Speak to a San Diego Divorce Lawyer Today

If you have questions about your divorce judgment, be sure to raise them with an experienced California family law attorney. If you are planning to divorce and need supportive and experienced counsel to negotiate a settlement agreement that meets your needs, let your next call be to the Law Offices of Renkin & Associates. 

Your best interests and those of your children are always our top priority, and we seek outcomes that give you the best possible future. For more information about our family law practice or to schedule a consultation, please contact us.

Divorcing As a Physician with a Private Practice

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Divorcing as a Physician with a Private Practice

When you are facing divorce as a physician with a private practice, issues like property division and child custody become more complicated, even if the separation is amicable. In fact, there are several unique concerns during the process of divorcing as a doctor, including:

  • Putting together a custody and visitation schedule
  • Valuing the medical practice and dividing the marital estate
  • The negotiation of spousal maintenance

A San Diego family law attorney with experience in physician divorces can help you navigate these issues in a way that benefits your children while helping you protect and continue to benefit from the professional career and reputation you worked so hard to build.

Division of High-Value Marital Assets

California is a community property state, meaning that all assets and debts acquired during the marriage are presumed to belong equally to both spouses, which is why a lot of physicians opt for a prenuptial or postnuptial agreement. 

If you opened your practice after getting married, its financial value could be subject to a 50-50 split during your divorce. Even if the practice was already established before you met your spouse, any increase in value that occurred during the marriage can be split according to California’s community property rules, especially if your spouse gave up their own career aspirations to support your goals and/or raise a family.

It is entirely possible that you and your spouse will be happy to negotiate a fair division of the marital estate. However, if they are determined to keep as much money and property as possible or insinuate that you are not entitled to what you are asking for, a high asset divorce lawyer will negotiate on your behalf and even pursue litigation to achieve a just result. 

Addressing a Private Practice in a San Diego Divorce

When it comes to property division, a medical practice is one of the most difficult assets to address. 

To begin with, in California, medical corporations must have at least one physician owner, and licensed doctors must hold the majority of shares. Even minority shareholders must be so-called ‘allied’ medical professionals, such as licensed nurses, psychologists, or clinical social workers. 

Anyone who is not a doctor or allied medical professional cannot be awarded any degree of practice ownership in a divorce, although they may seek a share of the value it gained during the marriage. If you and your spouse cannot reach a settlement agreement, the court will have to make a determination and award.

As you can imagine, this type of determination and award is not easy, as it involves more than the income-based value. The court will have to look at variables like:

  • Any contributions your spouse made to the success of the practice. Did they work there with you? If so, in what capacity? Did they help the practice grow, either through efficient administration or presenting a positive image to patients?
  • The goodwill value of the practice. Factors that contribute to goodwill include your spouse’s professional skill and reputation, the staff employed there, and the efficiency of systems like billing and scheduling. 
  • Whether the practice was established before the marriage and, if so, how many years before.

Your California divorce lawyer will retain an experienced appraiser and even a neutral financial expert who can put together an accurate overview of the practice’s overall value. This way, you can prevent any business interruption by offering your spouse marital property equal to the value of their assigned financial interest in the practice.

Child Custody in a Physician Divorce

Doctors work long and hard to obtain their credentials, and their work schedules are usually more demanding and unpredictable than other professionals. Much as they love their families, they are often absent from the home and get to spend less time with their children than their non-physician spouses, which can make a custody schedule more complicated.

You and your spouse can negotiate your own custody and visitation schedule but if you fail to agree, the court will make a determination based on what it believes to be in the best interests of your children. Ideally, they will spend as much time with each parent as possible, so the court will attempt to create as fair a schedule as possible based on factors like the following:

  • The work schedule and availability of each parent
  • Which parent was the primary caregiver as the children were growing up
  • The age and health of each child
  • Whether there are allegations of domestic violence or substance abuse

An experienced California child custody lawyer can help you navigate this aspect of family law and strive for the most favorable result possible.

Spousal Maintenance

In many doctors’ marriages, the physician spouse usually brings in a higher income than their husband or wife. Chances are that your spouse passed up opportunities to improve their earning potential so that they could support your career and maintain a stable home life for the children. Now that you are facing divorce, they may be worried about their standard of living and financial security being compromised.

Although spousal support, also known as alimony, is not as common as it used to be, courts will still award it in cases where divorce leaves the lesser-earning spouse at a financial disadvantage. If your spouse is asking for alimony, your San Diego divorce lawyer can seek to negotiate an arrangement that gives them a reasonable amount of time to become economically self-sufficient.

Mediation in Physician Divorces

If you and your spouse disagree on any aspects of the divorce, you may be able to bypass the time, stress, and expense of litigation by mediating the area(s) of contention.

Mediation is a non-binding dispute resolution process that allows both sides to discuss their goals and obtain objective recommendations. You work with a neutral mediator to reach an agreement and will consult with your attorney both during the mediation and prior to signing the divorce settlement agreement.

Attorney Richard Renkin is a skilled mediator who received training from the National Conflict Resolution Center. He and his team will advocate for a divorce settlement agreement that is as collaborative as possible, so that your spouse is more likely to abide by its terms in the future.

Speak to a Physician Divorce Lawyer Today

If you are thinking about divorce or have already been served with court papers, you probably wonder what you should do next. The answer is: seek representation from an attorney who understands the dynamics involved.

With so many different issues that may arise regarding asset division, custody, and spousal support, you need a California family law attorney with a proven success record in handling divorce cases in San Diego. At the Law Offices of Renkin & Associates, we have years of experience representing doctors in family law matters and will work tirelessly to help you obtain a fair settlement in your case. To speak with a divorce lawyer at our firm, please contact us.

What is the California Community Property Law and How Will It Affect My Divorce?

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california community property law

When couples divorce in California, one of the biggest questions that arises is who gets what? Like child custody and visitation, property division is one of the most emotionally challenging aspects of divorce because cars, homes, and other personal property can represent years of hard work and/or sentimental value.

California is a community property state. This means that in general, property acquired by either spouse during a marriage is presumed to be equally owned by both spouses. Section 2550 of the Family Code requires the community estate to be evenly divided upon separation, so without any agreement to the contrary, the court will review the marital estate and order a 50/50 division.

How Does California’s Community Property Law Work in Practice?

If you and your spouse file for divorce in California, you have the option of negotiating your own property division and keeping the court out of it. Should that prove impossible, the court will take the perspective that any income and property (both real and personal) acquired by either of you during the marriage belong to both of you equally. Here are some real-world examples of what this division might look like.

  • You and your spouse bought a beachfront property in La Jolla together for $3 million not long after the marriage. The mortgage is currently valued at $1 million and an appraiser concludes that the house is now worth $4 million. After the mortgage is subtracted, the net community interest in the property is $3 million. If you want to keep the property, you will have to ‘buy out’ your spouse’s $1.5 million share (half of $3 million), either in cash or property of equal value.
  • Your spouse has a 401(k) that they began contributing to 10 years before you married. They continued to make contributions during your marriage. According to the most recent quarterly statement, their 401(k) is worth $600,000. Since they started contributing to it 10 years before your five-year marriage, two-thirds of that value, or $400,000, is his separate property and not generally subject to division. The community interest in the account is therefore $200,000.
  • You started a software consulting business during the marriage. To get it off the ground, you and your spouse applied for the business loan together, and the loan is now paid off. An expert values the business at $100,000, so each spouse’s community interest is $50,000.
  • Your spouse has a credit card with a $5,000 balance. Since the balance was accumulated during the marriage, you are each responsible for $2,500. There may be exceptions: for example, if your spouse recklessly ran up that balance to spite you or buy gifts for a new love interest, the court may hold them responsible for paying it.
  • A year after your five-year marriage, you took out a $30,000 student loan for your dental assistant associate degree. The loan balance is now $25,000. Under California Family Code section 2641, a spouse who acquires a student loan is usually the one responsible for paying it unless it was taken out over 10 years before you filed for divorce and both spouses benefited substantially from the education. Since the loan is only four years old and you have yet to find employment as a dental assistant, you are responsible for the balance.

What is Quasi-Community Property?

The term quasi-community property refers to any property acquired by one or both spouses when they lived out of state which, if acquired while living in California, would be considered community property.  

In other words, if you or your spouse lived outside of California during your marriage, and you earned any income, bought any real estate, or acquired any other assets that would be considered community property in this state, it is quasi-community property and subject to a 50/50 division upon divorce or legal separation.

For example, if you both lived and worked in Illinois during the marriage and bought $10,000 worth of antique furniture to decorate your home, the earnings from your respective jobs and the furniture are quasi-community property because they would have been community property if earned and acquired in California.

What Property is Considered Separate in a California Divorce?

Separate property is anything you own or owned under the following circumstances: 

  • Before you were married
  • Received as a gift or inheritance during the marriage 
  • Acquired after the date of separation from your spouse

Anything you purchase with separate property (e.g. you buy a cottage with the money your mother left you) remains your own, as does any money you earn from separate property (e.g. you rent out the beach house that your grandmother willed you).

There are times, however, when separate property and community property become mixed. This outcome, known as ‘commingling,’ can make property division more complicated during a divorce. Below are a couple of examples:

  • You owned a home before getting married, sold it, and used the money to make a down payment on a marital home. While the down payment would be considered separate property, any mortgage payments made using marital funds are community property.
  • Your spouse has a pension from a job they held before and during the marriage. The contributions they made are separate property but those made after are community property. Once you separate, future contributions are separate property once more. In cases like these, dividing a pension can be complicated and requires expert assistance.

Although the concept of a 50-50 split sounds straightforward, in a lot of cases it can be anything but. Valuing some types of assets can take time, commingling can make it more challenging to determine who is entitled to what, and if one spouse tries to conceal community property to avoid division, forensic accountants may have to get involved. Working with a high-asset divorce attorney can help you leave the marriage with the property you are legally and rightfully entitled to.

Do You Have Questions About California Community Property Law?

In a divorce, property division can easily become a source of contention. If you’re facing a divorce that includes real property and valuable assets like pensions and family businesses, you need an experienced California divorce lawyer who knows how to get the results. At Renkin & Associates, we are committed to helping you get the outcome you need to move on after divorce. To request an appointment with divorce attorney Richard M. Renkin, contact us online or call 866-228-7116 today.

What Happens to Retirement and 401Ks in a California Divorce?

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In many divorces, spouses’ pensions and other retirement accounts will be among the highest-value assets they want to protect during their divorce. From IRAs and 401ks to pension plans, these accounts are often the most valuable assets to be divided in a divorce proceeding.

California Retirement Account in a Divorce

Pensions and retirement accounts are in many ways treated similarly to other types of assets, including being split into separate property and marital or community property.  They are also subject to a number of unique considerations and requirements. As a result, if you are preparing for a divorce in North County, CA and you or your spouse own significant retirement assets, you will want to carefully plan to protect your interest in these assets. A skilled San Diego divorce attorney can help you through the process.

Dividing Retirement Plans in a Divorce

Taking a Distribution

It may be tempting to take a distribution from a retirement account in order to pay expenses that come up through the course of divorce. However, if you are under 59 ½ years old, there will be taxes and tax penalties for taking a distribution, which could be tens or hundreds of thousands of dollars, depending on the distribution. Fortunately, there are other ways to split up retirement assets without suffering these tax consequences.

Transferring to Another Retirement Account

You likely will be able to transfer assets from one retirement account to another, but this process has to be done correctly in order to prevent taxation that may result if your transfer looks too much like an asset distribution. This type of transfer will only work with an IRA (either traditional or Roth), and there must be a divorce decree outlining this process in order for you to be able to successfully avoid extra taxes. Even if you have agreed on the terms, you should avoid making the transfer until the divorce is final. Even with the decree, this still might not be the best way to transfer the assets.

The Qualified Domestic Relations Order (QDRO)

One aspect that makes pensions and certain other retirement accounts unique from other types of community property (assuming they qualify as community property under your personal circumstances), is the involvement of a third-party administrator.

When you own a pension, the plan administrator is under a strict duty to distribute pension payments to you in accordance with the terms of the plan. In order to direct payments to a former spouse, the plan administrator needs what is known as a qualified domestic relations order (QDRO). A QDRO is a special type of court order, and it is required regardless of whether you and your spouse settle your divorce amicably or take your differences to trial.

With certain types of retirement plans, obtaining a QDRO requires “joining” the plan as a party to your divorce. This is a complicated process, and one that requires the help of an experienced divorce attorney. Examples of plans that require this “joinder” in order to obtain a QDRO include:

  • State government plans, including California Public Employees’ Retirement System (CalPERS), California State Teachers’ Retirement System (CalSTRS), and University of California Retirement System (UCRS) plans.
  • Federal government plans, including Civil Service Retirement System (CSRS), Federal Employees Retirement System (FERS), and Foreign Service Pension System (FSPS) plans.

Qualified plans covered by ERISA, including private company pensions, 401ks, deferred compensation plans, employee stock ownership plans (ESOPs), profit-sharing plans, and severance plans do not require “joinder” of the plan, but they still require a QDRO. On the other hand, individual retirement accounts (IRAs) and Roth IRAs can generally be divided without a QDRO (though some other form of court judgment or order will still be required).

Leaving the Retirement Account Alone

The easiest and safest solution might be to just leave the retirement account alone. If you have retirement assets worth $1 million and a house worth about the same, each spouse could take half of the total assets without having to sell the house or halve the retirement account. Forcing the sale of a house or the transfer of retirement assets may mean that you will get a lower price than you would otherwise, and it could also add time and complications to your divorce proceedings.

Keep in mind that the house is money available now while the retirement money is not presently available without paying taxes and a penalty.  Each person’s situation is unique and needs to be carefully examined, ideally with the legal advice of an experienced North County divorce attorney.

Dividing Retirement Plans in a Divorce: Who Gets What?

Now, we get to the question of who gets what. When is one divorcing spouse entitled to a portion of the other’s retirement plan? When can one spouse argue to keep his or her entire pension? The answers to these questions aren’t as straightforward as they might seem, and in fact there are numerous different factors that can come into play. 

For example, in order to determine each spouse’s entitlement to pension and other retirement account benefits, it will be necessary to address questions such as:

  • Is the entire account subject to distribution as community property? If not, is a portion considered community property, while the rest is deemed separate property?
  • What is the present value of the retirement plan?
  • Is one spouse willing to give up his or her share in the retirement plan in exchange for other community property assets?

For more information, you can read: How Can I Protect Specific Assets in a California Divorce?

Important: Are You a Military Officer?

Importantly, if you are a military officer, there are still more considerations that come into play. Under the Uniformed Services Former Spouses’ Protection Act (USFSPA), there are special rules that apply to military pensions.  A proposed amendment to this federal law may soon change the way that military pensions get divided and distributed in a California divorce. For the latest updates, contact the Law Office of Renkin & Associates to schedule a confidential case evaluation.

How to Split Up Retirement Accounts in a Divorce

The division of retirement accounts requires a lot of attention to detail so that you do not lose hundreds of thousands or even millions of dollars. What is the most efficient and equitable way to split up these accounts?

Immediate Calculation

Since most divorcing couples want to move on to the next phase of their life as soon as possible, courts tend to prefer to get an immediate resolution to the issue of who is entitled to how much and from which retirement account. It is also easier to divide the accounts as early as possible rather than waiting. Although the account or accounts may only be in one spouse’s name, anything contributed during the marriage is typically considered to be marital property to which both parties are entitled. However, the amount each party is due varies depending on the type of account.

Defined Contribution vs. Defined Benefit Plans

How is a 401(k) Divided?

In a defined contribution plan (such as a 401k), you put in a set amount, which may or may not have a match offered by your employer. Your defined contribution account is kept separate from other employees’ accounts, and you may even have some control on how the money is invested. 

A defined benefit plan, such as a 401k, is subject to equitable distribution in a divorce. However, only the amount that was accrued during your marriage is considered community property. For example, if you contributed to your 401k for 10 years before getting married, and then continued to make contributions for 5 years before filing for divorce, then the entire 15 years of contributions are not considered community property. Instead, your spouse can only claim 50% of the retirement savings that you accrued during the 5 years that you were married.

Whatever portion of your 401k is split will require a QDRO to help you transfer the appropriate amount from your 401(k) into your ex’s retirement plan. A QDRO offers a tax- and penalty-free way to split your retirement plan under California law. These funds can be rolled into a traditional or Roth IRA; your divorce lawyer can help you determine which option is best for your specific situation.

To protect your 401k, you may be tempted to make a withdrawal of your 401(k) funds if you suspect that you are heading towards divorce. Doing so usually backfires. Instead of protecting your 401k, you may end up paying a greater share of these funds to your ex-spouse. 

Courts view this type of action as attempting to evade an equitable distribution of community property, and may order you to pay a pre-tax, pre-penalty valuation of the funds (depending on the reason for the withdrawal). This can make withdrawing your funds particularly expensive, as you will not only pay a penalty and taxes for the early withdrawal, but you will be required to split your 401(k) as though those penalties and taxes had not been imposed.

How Is a Defined Benefit Plan Divided?

In a defined benefit plan, you receive a set amount distributed to you periodically once you reach a certain age, and your money is not in a separate account with just your name on it. In order to split up a defined contribution plan, you would look at the amount of money that was added during the marriage and what it is currently worth. You may also want to consider when the retirement account becomes vested if there are employer matches. In order to determine the current value of a defined benefit plan, you would consider when the plan will begin paying you or your spouse and what your spouse’s or your life expectancy is.

Social Security

In addition to retirement assets, both spouses may be entitled to Social Security retirement benefits. If the marriage lasted for at least 10 years, the spouse that earned less during the marriage may be able to receive more Social Security benefits based on his or her former spouse’s income. There are other requirements for a spouse to be able to qualify to receive the same Social Security benefits as an ex-spouse, including that the spouse cannot have remarried. If your ex-spouse qualifies to get the same Social Security benefits as you because of the length of your marriage, this will not negatively affect your own Social Security benefits.

Schedule an Appointment with Divorce Lawyer Richard Renkin

Divorce may be the right decision for some couples. However, knowing that you are making a good choice doesn’t make the process any less emotionally draining or expensive. With the help of a skilled family law attorney, you may be able to better protect your assets – including your retirement savings.

At Renkin & Associates, we are dedicated to helping our clients achieve the best possible outcome for their divorce or other family law matter. If you would like to speak with an attorney about what you can expect with regard to your pension or other retirement plan during your divorce, please reach out to our law office. To request an appointment with divorce attorney and Certified Family Law Specialist Richard M. Renkin, contact us online or call 866-228-7116 today.