Divorce happens to people all along the economic spectrum, and money issues can play a factor in the decision to pursue a divorce in the first place, regardless of whether the couple considers themselves rich or poor. Lack of money can cause unresolvable, ongoing tension which can lead to divorce. On the other hand, an abundance of money can lead to a sense of economic independence in one or both spouses which leads some couples to call it quits. Regardless of how much money a couple has between them, the basic aspects of the divorce process will be the same, but net worth will have an enormous impact on the outcomes of those various issues within the divorce.
Property Distribution Becomes More Complicated
When a couple divorces, their property will be divided between separate property (the property belonging to each spouse individually before the marriage) and the community property which is all the property that is earned during the marriage by either spouse or acquired with such earnings. Separate property is returned to the respective spouses, while community property is collectively split 50/50 between the spouses.
A higher net worth does not inherently make the process more complicated – for example, if a couple’s sole property was $3 million in a joint savings account, then dividing it will be simple – but those with higher net worths tend to have a variety of different sources of income and wealth, such as family business, retirement funds, real estate holdings and so on. Dividing these becomes especially challenging when they are a mix of separate and community property.
Spousal Support Awards Will Often Be Greater
Unlike some other states that award spousal support only where there is a demonstrated necessity on the part of one spouse for funds, California will award spousal support from one spouse to the other on either a temporary (for the course of the divorce proceedings) or ongoing basis (after the divorce is finalized) in order to maintain the standard of living that the receiving spouse had during the marriage. Thus, in high net worth divorces, it is not uncommon for spousal support awards to top $10,000 a month or higher.
How Child Support and Child Custody are Affected
With child support, courts have less leeway in deciding what the awards will be and will instead follow state and local guidelines in setting the amount of the award, which usually is paid until the child reaches the age of 18 or older. These guidelines incorporate the income of both parents, among other factors, and, even where a custodial parent can easily pay the expenses of the child on his or her own, a higher earning parent will usually be required to make a support payment. Again, these numbers go up based on how much financial resources the paying spouse has at his or her disposal
With regards to custody, the court will make custody determinations based on the best interests of the child, which includes the means and resources available to each parent to provide for the child. Thus, the economic standing of each party will in some sense have an effect on how the court views the custody arrangement. That said, the court can equalize one spouse’s economic standing with regard to raising the child through spousal and child support awards.
Get Answers to Your California Divorce Questions
To schedule a consultation regarding any questions about divorce in California, contact one of the family law attorneys at Kearney | Baker today.