Many divorces end with the parties agreeing to terms in a private settlement,
without the court’s ruling on certain important legal issues. The
more amenable the parties are to compromise, the easier it is for them
to reach a settlement, therefore minimizing litigation expenses in the future.
A carefully drafted and negotiated settlement agreement also helps the
parties minimize future litigation, such as the modification of the agreement’s
terms. The modification process for settlement agreements is the same
as those for regular court orders. That is because courts usually ratify
the terms of a settlement agreement and incorporate them into its final
judgment on the parties’ dissolution of marriage petition.
Circumstances Related to Separation & Divorce
The circumstances surround the parties’ divorce are important when
determining property division issues. In California, the parties are entitled
to an equal share of community property upon divorce. All property acquired
during the marriage is considered community property unless it constitutes
separate property. All property acquired before marriage or after separation
is considered the party's sole and separate property.
As a result, the date of separation is particularly important for California
divorces. The date of separation is not the same as the date the parties’
divorce becomes effective. As a result, the date of separation is a fact
that the parties should stipulate to in the agreement.
Spousal and Child Support
Under California law modifying spousal and child support is justified by
a material change in circumstances. A settlement agreement should have
a provision that specifies the circumstances upon which the provision
of spousal and child support was based. Furthermore, the parties have
some leeway to specify what constitutes a material change of circumstances
justifying a modification. A well-drafted settlement agreement will have
provisions reflected the pertinent circumstances related to the modification
of spousal and child support.
Non-Survivability of Rights
Another important provision for divorce settlements is the termination
of the other spouse's entitlement to inheritance rights upon the other
spouse's death. The parties to a divorce settlement have the right
to preclude each other from retaining any survivability rights to their
testamentary estate. This is helpful to simplify probate administration
for individuals who had multiple marriages.
Tax Impact of Divorce
One of the most important tax provisions in a divorce settlement involved
a term that expressed the parties' intent to treat spousal support
payments as alimony subject to the former alimony tax deduction. However,
after the recent enactment of the Tax Cuts and Jobs Act, such a provision
Another important tax provision for marital settlement agreements involves
the tax consequences of certain property transfers pursuant to the terms
of the agreement. It is important for the parties to consult an experienced
tax attorney regarding the tax impact of their divorce. Additionally,
provisions, where the parties agree not to perform their respective new
tax obligations in a way that would expose each other to a higher tax
liability, is a significant protection for both parties.
Contact an Experienced Attorney to Discuss Your Case Today
If you need legal advice and advocacy regarding a matter concerning a divorce,
you should contact Hanson, Gorian, Bradford & Hanich. We are committed
to making sure your family's rights are adequately preserved.
Call us at (951) 987-6003 or
contact us online today.