When Improving Quality of Life Means Ending an Unhappy Marriage

The pandemic has been hard on relationships—the stress of working from home, worrying about health and job security while homeschooling kids has pushed many relationships to the brink. Many of us start the year with a promise to improve the quality of our lives. For some couples, ending an unhealthy marriage is the best way to do this.

What to think about if you and your spouse are planning to Divorce in 2021

“Ben” and “Amy” are a good example of a couple who are getting divorced in the new year. For their Amicable Divorce—no children, neither party is contesting the Divorce–they don’t need an attorney. Because they will be able to work out an equitable division of property themselves, Guideway can save them a lot of money. Best of all, we guide them through it. We prepare the legal documents and file them with the court. In California, a Divorce can be finalized in a minimum of six months.

Ben and Amy have been married for eight years

Ben and Amy got married soon after Amy graduated from college–Amy admits that it was probably too soon. She began working for a nonprofit, and Ben was a fireman with the Oakland Fire Department. Ben is 15 years older than Amy and doesn’t want children, and this has created a growing rift. Amy agreed to this condition when they got married, but it turns out that she wants children after all—she wants to be a family. The couple’s assets include their Oakland home, two cars, Amy’s 401k and Ben’s retirement account.

Our initial session was a Zoom call to review the Divorce process

Ben would serve a petition to Amy, which was the beginning of the Divorce process. From this point, they would need to identify the shared assets and debts that they have acquired over the course of their marriage and reach agreement on how they would divide them.

Creating a financial landscape

Divorcing couples need to provide the financial documents that will create a comprehensive financial landscape. These should show both assets and liabilities. You’ll need to gather:

• A list of your financial accounts–checking, savings, money market, life insurance, investment, 401k, credit cards, retirement accounts, etc.
• Account statements, deeds, copies of insurance policies, and other such supporting documentation.
• Tax returns for the past two years, paystubs or other proof of income.
• Information regarding any business interests in which you are involved.

We’ve been assisting couples with divorce since 2003

Divorce can seem overwhelming because it is often accompanied with upheaval—especially if there are children. Yet it is a methodical process, and we guide you through it. If you are considering Divorce or want more information, contact Guideway today.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Divorce and Your Money: A Thoughtful Action Plan

Those in the Divorce business will tell you that they experience an uptick in January. No couple wants to disrupt their family’s holiday, so they push the Divorce off until January. They know that it will be emotional and disruptive, even as they try to minimize the effect on their families.

Here are some thoughts on money matters while preparing for your Divorce

The economic realities

The process of itemizing your property and getting an idea of what will be left after you split it up is routine practice in all 50 states. Some people actually decide to reconcile once they see their financial landscape divided in half. Others use this as a reality check and move forward.

Know that your financial circumstances may change

Certified financial planner Lauren Klein has seen clients make poor decisions such as using retirement funds to help them keep the family home, only to see the house lose value and become an enormous financial burden. Many others overcommit in order to keep the home. They end up with a mortgage that could choke a horse, in a neighborhood that’s beyond their means, with a lavish landscape and gardener. They’d be much better off selling that home, taking the money and buying a smaller home in a modest neighborhood that they can afford.

Waiting too long to separate finances

Do not wait to split joint bank and any other accounts that you share. Change your login information and whatever else you need to do to separate your financial lives. Check your credit report periodically to make sure there aren’t any surprises. Remember that your ex has your social security number and knows your mother’s maiden name. One of my colleagues’ divorced husband died and she inherited nearly $750K of his debt—all of it from accounts that he had not canceled or transferred into his name.

Avoid big ticket, emotional buying

Don’t make any major financial decisions until the divorce is final. Most families deal with varying degrees of financial adjustment as they figure out how to support two households rather than just one. Avoid impulsive purchases until the dust settles.

Do not try to hide money or assets

If you try hiding money or assets to keep them out of the “marital estate,” the risks are serious penalties and possible jail time. Bad idea. This is not worth the risk.

Think about your career and making more money. You’re going to need it

If you’re currently not working, try to get a job, especially one with health insurance. If you are working, look for ways to advance in your career or increase your income because a divorcing individual will likely need a 30% increase in income to maintain his/her standard of living.

California Document Preparers has helped hundreds of families get divorced

Our dedicated team has assisted hundreds of couples with uncontested Divorces. If you and your spouse can agree on division of property and a parenting plan, we can save you a considerable amount of money. 

Guided Divorce: A specially trained, neutral third-party

If, however, your situation is more complex and you and your spouse cannot agree on how to divide your assets and raise your children, CDP’s Guided Divorce may be the right solution for you. We’re a specially trained, neutral third-party who work with divorcing couples to guide them through the issues that have stalled their Divorces. Together we reach a mutually acceptable resolution. There’s no judge, no winning or losing. Instead, our Guided Divorce is based on the principles of negotiation, an open mind and compromise.

We’re responsive and available throughout the process. It starts with an office visit to review the Guided Divorce process. Schedule an appointment today to talk to one of our team. We’re helpful, compassionate and affordable.

Redefining “Family”: Divorce Lawyers Divorce But Stay Connected

Vanessa Hammer and Brendan Hammer are two divorce lawyers who fell in love and married. Both came from families who had struggled financially, which helped mold their shared values and goals. Vanessa came from a large Mexican-American family in Houston. Brendan was the only child of an Hispanic mother.

When Vanessa graduated from law school in 2006 she moved to Chicago where Brendan had one more year. They planned to move to Houston after his graduation. The early years were filled with hard work as they built their careers. They traveled, made friends and were happy.

First signs of trouble revolved around their families

For Vanessa: “I sacrificed to leave my family, and I made concessions in my career in Chicago because I thought we were going back to Texas.” For Brandon, it was the death of his mother, his father coming to live with them and the birth of their son—all in one year.

By 2013, when their son was nearly three, things began to change. Brandon became snappish and began drinking too much. Vanessa learned that he he’d had an affair. This was his reaction to the events in his life.

They spent a year in therapy exploring the roots of their divide

Family was important to Vanessa. She wanted to move home to Texas and wanted another child. He wanted neither.

Divorce became inevitable

In 2014 Vanessa and their son moved to Texas. Brendan visited frequently and spent weekends with their son, who hated when his father left at the end of their visits. In the summer of 2015, Brendan left the firm where he had made partner and moved to Houston. A year later they all moved back to Chicago. “Culturally and educationally, Chicago better fit our values for raising a young child,” he said.

A living solution that was right for their family: Nesting: Two houses for three people

Despite their Divorce, they now are purchasing a home for their son who will stay in that home with one of them as they each take turns living in a separate residence that is also shared. This is referred to as nesting — providing the child of divorce one consistent, stable place to call home.

Feeling stigmatized by Divorce

Brendan feels that there’s a stigma associated with divorce, that their solution for keeping their family together isn’t understood by all. Vanessa wants people to understand that they are a family—though their living arrangement is a little unconventional.

As seasoned divorce lawyers, the economics of their Divorce were settled fairly, with the flexibility necessary to accommodate two parents living in an expensive city raising a child. Yet their incomes now must cover two households, not one. Their son is too young to understand divorce. “He knows there was a time when mom and dad didn’t live together, but he knows we are a family.” They always use the word “we”, as in “we are giving you this gift”. They made a conscious decision not to use the word “divorce” with him.

Life after Divorce: Their priority is raising their son

Having an equal partner helps when one of them travels or has other commitments. “We are clear the marriage is over, but I care about Brendan and what happens to him because he is my family,” she said. Both agree that their son is the best thing that happened to them and that they’ve grown up through the divorce process.

Is their new life better?

In some ways, yes. “I have a lot more freedom, and if I am honest with myself I found marriage restrictive.” She concurred: “I always felt I had to ask permission for everything, for having my own life apart from the family.” The move to Texas had to happen to prove that it wasn’t right for our family.

Advice for others contemplating Divorce

• Compassion for each other. Their own Divorce has made these lawyers more compassionate when dealing with their clients.
• Don’t say anything to the kids until you have a plan.
• There’s happy divorce and I’ll-never-see-you-again Divorce. Be creative and understand the range of options for divorce.
• “If there are children, minimize their exposure to adult issues,” she said. “All a kid wants to know is that everything is going to be okay. Be a rock even if you don’t feel like one.”

California Document Preparers has helped hundreds of families get divorced

Our dedicated team has helped hundreds of families get divorced. We’re responsive and available throughout the process. It starts with an office visit to review the Divorce process, responsibilities and costs. If you’re contemplating Divorce, schedule an appointment today to talk to one of our team. We’re helpful, compassionate and affordable.

Divorce and Pets: Who Gets the Dog?

A recent New York Times article tells the story of a divorcing couple who amicably divide all community property. The problem was Zoe, a Jack Russell terrier, that “Jim” brought to the marriage. Technically, Zoe belonged to him. In North Carolina, a community property state, pets are classified with “stuff”, to be divided equally between the parties. Three states — Illinois, Alaska and, effective this year, California — have amended their family code to treat pets differently from other types of marital assets.

The divorce lawyer explained that pets are treated in the same way as TVs, furniture and cars. Zoe belonged to Jim like any of the other assets he had brought into the marriage. Jim and “Bob” had been together for 13 years, married for four. During that time they’d shared the cost of Zoe’s regular vet visits, organic food and treats, the groomer, dog walkers–even her canine psychiatrist.

The author had asked for joint custody of Zoe

Over the years, Bob grew to love Zoe, character flaws and all. “I came to appreciate how she would wake up happy every day, ready to greet the world with her prancing walk. I came to see how cataracts near-blinded her and incontinence shamed her. How could I not love her?”

He asked Jim for joint custody for two reasons. In addition to his deep attachment to Zoe, Bob had also hoped that sharing responsibilities for their pet would help them stay connected. Perhaps Zoe could provide an enduring tie.

Zoe was considered personal property

Jim’s answer was “no.” His lawyer advised him that Zoe was considered personal property and he alone could determine her future. For this reason, Bob was sitting in his lawyer’s office, contemplating paying $16,000 for joint custody. His legal team had examined other state laws and come up with a proposed dollar amount for Zoe’s shared custody.

While Zoe was priceless, $16,000 seemed excessive for an 11-pound geriatric terrier. Heartbroken, Bob signed the separation agreement that listed Zoe somewhere between “electric salt and pepper shaker” and “red bowl” on the property inventory. Then Jim and Zoe drove away.

A few weeks later, an email from Jim: No pets allowed

“Would you be interested in having Zoe full time?” “Yes!” Jim finally disclosed that his new townhouse wasn’t dog-friendly. Although the legal agreement was signed and recorded, Bob took full custody of Zoe. Jim wrote again, making sure Bob knew that he wouldn’t pay for any of Zoe’s care “because I won’t ever see her again.” So much for staying connected.

It’s just Bob and Zoe now. Two weeks shy of 17, Zoe is still chasing squirrels. Bob lost his parents and separated from Jim within a few months of each other. He is grateful for the comfort that Zoe brings.

A lawyer with the Animal Legal Defense Fund suggested a “petnup”

Dog lovers understand what the loss of a pet means to its owner. A petnup is a formal agreement of the best way to avoid custody disputes when a relationship ends. It works just like child support. Options include sole custody, joint custod y and even pet support.

California assemblyman Bill Quirk noted in 2018, while advocating the change in law. “As a proud parent of a rescued dog, I know that owners view their pets as more than just property. They are part of our family, and their care needs to be a consideration during divorce proceedings.” Thanks to Mr. Quirk, since January, California judges have been permitted to consider the wellbeing of the animal, as well as who provided its care, in working out custody agreements.

Pet lovers who fear their animals will outlive them should make provisions in their Living Trusts

People who die before their pets leave stranded animals. In a best-case scenario, a neighbor, family member or friend cares for the pet for the rest of its life. The alternatives? The Humane Society estimates that six to eight million dogs and cats enter shelters annually. An estimated half are adopted, and the rest are euthanized. In some sad cases, after the death of its owner a pet is simply let out the front door to get lost, run over or any of the other horrible fates that befall abused animals.

Consider a Pet Trust

A Pet Trust is a legal document that outlines the continued care and maintenance of domestic animals; it also names new caregivers or directs Trustees to find new homes for pets. A Trustee has a legal duty to carry out your wishes. When naming a Trustee, think about the expense of caring for a pet. Food and visits to the vet can add up. Some owners make outright gifts of cash for their animals’ care. Read our blog about creating a Trust for your pet.

California Document Preparers assists our clients in the preparation of Living Trusts

Our Living Trust portfolio includes a Power of Attorney and Advance Healthcare Directive. Most of our clients are surprised at how easy it is. Schedule an appointment today by contacting us at one of our three Bay Area offices. Our dedicated team is helpful, compassionate and affordable.

Contemplating Divorce? An Incentive to Finalize by Dec. 31

If you and your spouse are thinking about Divorce, and if there’s a likelihood that your Divorce will include an alimony payment, it’s time to get busy. Last winter’s GOP Tax Cuts and Jobs Act will eliminate a tax break for alimony payments finalized after Dec. 31.

Americans who finalize or modify Divorce agreements in 2019 or later will no longer be able to deduct alimony payments. The loss of the deduction has large financial implications for those couples where one partner earns substantially more per year than the other.

The breakdown: $1 of alimony is actually costing just 60 cents

What does the deduction mean for divorcing couples? For those in the highest income-tax bracket, it means that every dollar someone pays to support a former spouse is actually costing him/her a little more than 60 cents. Potential divorcees have the remainder of 2018 to use the alimony deduction as a bargaining chip in their negotiations with estranged spouses.

An increase in acrimonious Divorces that disproportionately target women

Many believe that removing this deduction will make Divorces more acrimonious, that people won’t be willing to pay as much alimony. More couples will end up fighting in court because they won’t be able to agree on alimony terms. Since it is women who tend to earn less and are most often the recipients of alimony, many believe this tax change could disproportionately hurt women. One family law attorney believes that the repeal reduces the bargaining power of vulnerable spouses, mostly women, in achieving financial stability after a Divorce.

For decades, alimony has been tax deductible

For decades, Americans paying alimony to a former spouse have been able to deduct the payments from their taxes. Depending on the size of the payments and the earning gap, they gave themselves a generous tax break. According to the IRS, an estimated 600,000 taxpayers claim this deduction each year. The Joint Committee on Taxation estimates that elimination of the tax break will increase federal revenues by $7 billion over the course of a decade.

There is evidence that some high-net worth clients are devising complicated workarounds in the event they cannot complete their agreements before the Dec. 31 date.

Leverage to negotiate lower spousal support in 2019

Divorce professionals expect that there will be less money for the spouse receiving alimony — or, at the very least, a major source of contention in negotiations between parties. ”The payer is going to have a lot of leverage to negotiate lower spousal support in 2019,” said Jeremy Runnels, a financial planner at West Coast Financial in Santa Barbara, Calif.

Couples looking beyond alimony to reach equitable solutions

Financial planners say some spouses may choose to forgo alimony payments and explore alternatives such as lucrative real estate, larger shares in tax-deferred retirement accounts or some complex combination of the two that maximizes tax advantages. Options include a Qualified Domestic Relations Order (QDRO) that sets up future payments to a lower-earning spouse from a higher-earning spouse’s retirement account, taxed at the lower earner’s rate.

We’ve assisted hundreds of couples with uncontested Divorce

If you and your spouse are in agreement about your Divorce—including division of property and a parenting plan–we can assist you and save a significant amount of money. Contact us at one of our three Bay Area offices to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.

The Grown Kids of Divorce Look Back

For parents considering divorce, their already busy lives just ratcheted up a few notches. They’re now worrying about the economics, whether they’ll need to sell the family home; they’re wondering how they’ll manage being a single mom or dad. Most of all, they’re worried about how divorce will affect their kids.

The HuffPost published a Reddit thread that asked the now-grown kids of divorce to look back and think about Divorce and the impact it’s had on their lives.

1. Acted out at school; took on more responsibility at home.

   One ten-year old kid admitted to bullying tendencies. Seeing his parents’ marriage dissolve made things worse.“My parents’ divorce increased my bullying tenfold. After a couple of weeks, I started feeling depressed and became really quiet and shy. It was tough not understanding why your dad has to leave and why your mother cries herself to sleep at night. The good news: I stepped up and became a fiercely protective and loving big brother to my younger sister.”

2. Felt a sense of relief.

   This one was fairly common. Many said they spent their teen years wishing their parents would divorce. “My parents wouldn’t divorce because they’re Catholic. Once my mom finally did leave my dad, I was relieved. I remember thinking that I hated my dad and wished he would just disappear. I had to wait until my early 20s for it to happen.”

3. The financial strain of living in a single-parent household.

   Money struggles were a constant in many households. After the divorce, one kid, his mom and sister moved into a one-bedroom apartment. His mom worked two jobs to make ends meet, sometimes picking up a third. “It was all about giving us a good life, which she absolutely did. We may not have had the best clothes or everything we wanted, but she always tried to give us everything she could, and we never went hungry. My mom is incredibly heroic for raising us on her own. I don’t even care that I barely hear from my dad.”

4. The blame game.

Life as you know it changes when your parents split up. Rebellion is common. “I went off the rails. I refused to take responsibility for my own actions and blamed my parents for everything. I bought into the pity and coddling of those around me.”

5. Struggled with the divorce, even as adults.

   Those families who waited to divorce until the kids are grown/out of school don’t necessarily have it any easier.“I was 29 when my parents divorced, and I’d been living away from home for much of that time, but it still hurt because my father is a jerk who waited until my youngest brother turned 18 to officially leave my mother.”

6. They didn’t take kindly to one parent badmouthing the other.

   One kid’s mom had primary custody, and she began to dread weekends with her dad. “The hardest part was listening to all the crap he said about my mom and still does. My dad always told me that I was manipulative and playing games with him. It took me more than 18 years to figure out that I wasn’t a manipulative, game-playing control freak. I was the daughter of one!”

7. They were happy to see their parents thrive after the divorce.

   One child, whose parents’ divorce was distressing at first, became convinced it was for the best by seeing how happy they were without each other!“My dad seems to be excelling at life now. He is more outgoing and independent. He likes to tell me about all the new things he’s doing and the friends he’s making. This is the best thing they could have done for themselves.”

California Document Preparers has helped hundreds of families get divorced. Our dedicated team is responsive and available throughout the process. It starts with an office visit to review the Divorce process, responsibilities and costs. If you’re contemplating Divorce, schedule an appointment today to talk to one of our team. We’re helpful, compassionate and affordable.

Trump, Taxes and Divorce: End of the Alimony Deduction

While many of the changes to the GOP Tax Cuts and Jobs Act are geared toward corporations, big businesses and those who own them, a repeal of a deduction for alimony is an example of how the tax law will have consequences beyond the one percent.

In some cases, the new law will be turning over tax policy that has been in place for decades. Given the highly partisan and controversial manner in which this bill was passed, it leaves many wondering if Republican legislators thought through the consequences for those who are likely to be most affected—in most cases women.

Current law has included an alimony payment deduction for 76 years

According to the Act as it is currently written, this deduction will be eliminated, effective 2019. Couples who are in mediation, separated or contemplating Divorce are being counseled to act now if it seems that Divorce is the inevitable outcome. A result of the new law could be a surge in Divorces.

“Now’s not the time to wait,” said one Philadelphia lawyer and former chair of the American Bar Association’s section on family law. “If you’re going to get a Divorce, get it now.”

The deduction substantially reduces the amount of alimony payments

What does the deduction mean for divorcing couples? For those in the highest income-tax bracket, it means that every dollar someone pays to support a former spouse is actually costing him/her a little more than 60 cents. Potential divorcees have all of 2018 to use the alimony deduction as a bargaining chip in their negotiations with estranged spouses.

An increase in acrimonious Divorces that disproportionately target women

Many believe that removing this deduction will make Divorces more acrimonious, that people won’t be willing to pay as much alimony. More couples will end up fighting in court because they won’t be able to agree on alimony terms. Since it is women who tend to earn less and are most often the recipients of alimony, many believe this tax change could disproportionately hurt women. One family law attorney believes that the repeal reduces the bargaining power of vulnerable spouses, mostly women, in achieving financial stability after a Divorce.

Tax break: An overview

1. A burden on the IRS. This alimony deduction has been criticized for being a burden on the IRS. There is a one-one relationship between what ex-spouses are paying and receiving. In 2010, there was a $2.3B gap in the reporting. If they don’t match, the IRS may be auditing two people who may already be feuding—a very difficult situation.
2. Alimony has been deductible since 1942 because lawmakers believed it was unfair to tax people on the alimony they paid when the money was not available for them to spend.
3. The deduction is significant for divorcing couples. Let’s say that John earns $250,000, which puts him in the 24% tax bracket. He agrees to pay $4,000 per month in alimony, but it really costs him about $3,000, with the deduction. Without the break, John may agree to pay only what would have been his after-tax amount, about $3,000.
4. Unfair to give divorcees a special break. House Republicans justified the repeal by suggesting that it was unfair to offer a special break to divorcees. The repeal prevents divorced couples from reducing income tax through a specific form of payments unavailable to married couples.
5. The tax change is projected to raise $6.9B over the next decade; it is one of the ways Republicans are trying to compensate for the huge deficit created by the tax cuts.

If you are contemplating Divorce, if it’s uncontested, we can assist you

California Document Preparers has assisted hundreds of couples with their Divorces. If you can agree on division of property and a parenting plan, we can save you considerable money. Our dedicated team is helpful, compassionate and affordable. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment.

A Cautionary Tale: Unmarried Spouse Ends Up With Nothing

This is a story with which many will be familiar. We likely know a friend, colleague or family member who has gone through just this kind of tragic situation.

• It starts with two mature people, Jack and Stella, who meet, fall in love and begin a committed relationship that lasts more than 20 years.
• Jack has significantly more assets than Stella.
• Jack and Stella never legally marry, yet they live together, and for all intents and purposes act and live as husband and wife for a large part of their adult lives.

Jack comes from significant family wealth . . .

Jack’s mother, who has never approved of his girlfriends, does not want her son to marry. After all this time, Stella has never developed a relationship with Jack’s mother, and Jack has led her to believe it is because she thinks all women are after his money.

Stella is well-educated, teaches music at the local high school and has no family money. Despite Jack’s wealth, she wants to maintain her independence in the relationship and insists they split everything fifty/fifty. She quickly becomes accustomed to Jack’s expensive tastes, yet she finds herself splitting the cost of lavish trips and expensive meals that she really can’t afford.

Twenty years later, Jack falls in love with Karen

After more than 20 years, Jack finds himself falling in love with Karen, a new colleague, and leaves Stella. More specifically, he tells Stella about Karen, and Stella moves out of the home they have shared for two decades.

Stella, now in her 60s, must endure the pain and loss of what feels like a Divorce, but because they never created any legal documents defining their relationship—they never married, created a Domestic Partnership or a Living Trust naming Stella as the beneficiary of any of Jack’s assets–she is entitled to nothing–no spousal support, none of the income Jack earned during their relationship, no property. Stella has to find an apartment and start over.

This cautionary tale makes a strong argument in favor of marriage or a Domestic Partnership

Jack’s and Stella’s relationship consisted of 20-plus years of long-term dating. Had they married or created a Domestic Partnership, under California Probate law, Stella would be entitled to community property, assets and a portion of Jack’s separate property assets. If Jack had died, the results would have been the same. Pain and heartbreak for Stella, but nothing in the way of property or assets.

While marriage isn’t necessary, to be protected in the event of death or a breakup, a couple needs to register as Domestic Partners and/or create a Will or Living Trust identifying those assets that the partners will inherit. Creating these legal documents is particularly important when two people come from different economic levels.

A New Year is a very good time to update your Living Trust to reflect on important changes in your life

Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.