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Los Gatos, CA post-divorce changes attorney

When a couple chooses to end their marriage, the process of separating from each other can be incredibly complicated. The vast majority of couples do not only share a life together, but they also share assets, financial accounts, and, in many cases, children. Because of this fact, the decisions made during divorce can have a drastic impact on the lives of both parties. Most notably, decisions involving spousal support and child custody can be significant. However, these critical decisions are not always final. In cases in which one party’s situation has significantly changed, a person can pursue a post-divorce modification

Areas Considered for Modification 

When a substantial change in circumstances occurs for one or both divorced spouses, one spouse may elect to file for a petition for modification, asking the court to modify the divorce decree. The two most common areas in which these modifications are petitioned for are: 

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Los Gatos divorce and QDRO lawyerDuring a California divorce, all community property must be divided between spouses. Unfortunately, a retirement account you have been sinking money into for years will not necessarily be all yours when you get a divorce. Even if an account is solely in your name, and you were the one earning the income, money saved during your marriage is typically considered community property. On top of giving up part of your 401(k) or pension, you may have to face penalties if you do not follow the proper procedures when splitting up the funds.

Avoiding Penalties When Dividing Retirement Funds

Even in the best divorce scenarios, both parties are likely to face some financial loss. Property has to be divided, and you will be walking away from one household to new bills in two different homes. Taking the proper steps when dividing retirement funds will ensure that you do not face additional financial penalties.

If you are the one who has to share your retirement savings, your attorney can walk you through the proper process to make sure that you do not lose more money than you have to because of penalties and early withdrawal fees. If you are receiving funds from your partner’s 401(k), you will get to keep more if you have the funds rolled over to your own retirement account than if you take the cash outright. In most cases, the best option is to use a QDRO to implement the transfer of funds.

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Los Gatos divorce lawyer health insurance COBRAMany people take advantage of lower rates or better coverage by receiving health insurance through a plan provided by their spouse’s employer. But what happens when your policy is through your spouse, and you are planning to get a divorce? Your best choices for ensuring that you will have insurance coverage will depend on your situation. Rather than rush out and try to find a new health insurance plan immediately, you can ask your attorney to help you navigate the sometimes-confusing laws and regulations of health insurance coverage during divorce.

Can I Stay Covered?

Often, you will be able to stay on your spouse’s insurance, at least for the duration of the divorce. During a legal separation, on the other hand, you may or may not remain covered. That will depend on the insurance company. Also, if you decide to proceed with a divorce, your coverage will definitely end when the divorce is final, since laws prohibit people from staying on an ex-spouse’s insurance policy after divorce.

Your children, depending on their ages, should be able to stay covered under the ex-spouse’s plan, but an agreement will have to be reached on that. If your children are between the ages of 18 and 26, however, you will not be able to force your ex-spouse to keep them covered. Even though it is legal to provide coverage for adult children, parents are only required to keep their children insured until age 18.

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Santa Clara County alimony attorney tax lawsThe Tax Cuts and Jobs Act has been a major topic of discussion over the past year, and many people have been affected, whether positively or negatively, by the changes implemented in this law. Those who are in the midst of a divorce case or completed their divorce in the past year will need to understand whether they must file their taxes differently than in the past. In addition, alimony tax laws have been altered drastically, and this has resulted in increased conflict in many cases.

Spousal Support/Alimony Taxes

New laws have changed the way both payors and payees of spousal support claim these payments on their taxes. Those who pay alimony will no longer be able to deduct the spousal support from their taxable income, and those receiving it will no longer have to claim it as taxable income unless the parties otherwise agree. This may not have a large impact on some spouses, but for those in high-asset divorce situations, the money gained or lost could be significant, to say the least.

According to CNBC, the “divorce subsidy” that was previously available was responsible for saving some of California’s top earners as much as 50 percent in taxes. Those savings were enough of an incentive for many people to agree to more spousal support and settle their divorces out of court. Without this incentive, high-asset divorces may be more complicated and drawn out, and the payors of spousal support will be more likely to try to work out deals that will benefit themselves rather than their soon-to-be-exes.

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Los Gatos, CA temporary alimony lawyerMany married couples choose to have one spouse be the primary income earner while the other spouse attends school, develops a new business venture, manages family and household needs, volunteers in the community, works on a part-time basis, or works in a rewarding but low-paying job. However, in the event of a divorce, this can leave the non-wage-earning or lower-paid spouse in a difficult financial position. Thus, the question of temporary spousal support can be an important factor to consider before filing for divorce. 

Standard Calculation for Temporary Spousal Support in Santa Clara County

When one spouse files for divorce, either spouse may ask the court for a temporary support order. Such decisions need to be made quickly to ensure that one spouse is not left destitute. Therefore, most judges use a standard formula to calculate the amount of monthly temporary support to be paid. 

In Santa Clara County, for example, the standard formula is:  (40% of the net income of the higher-earning spouse minus child support expenses) minus (50% of the net income of the lower-earning spouse). 

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Law Offices of Benita Ventresca

20 S. Santa Cruz Ave., Suite 212
Los Gatos, CA 95030

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