How to Identify and Avoid Financial Scams Targeting Divorced Individuals? | Los Angeles Divorce

Posted by Tim Blankenship on

 

How to Identify and Avoid Financial Scams Targeting Divorced Individuals?

I’m Tim Blankenship from Divorce661. If you recently finalized your divorce, first—congratulations on moving forward. Second—be extra cautious: divorce is a vulnerable transition and scammers know it. In this article I’ll walk you through the top scams that target newly divorced individuals, real red flags to watch for, and clear, practical steps to protect your finances and personal information.

Why newly divorced people are prime targets

Major life changes come with emotional and financial stress. Scammers exploit that stress, attempting to move quickly before you can think things through. If you receive a settlement or lump-sum payment, you may suddenly have funds that attract attention from predatory services and fake advisors. Staying calm, skeptical, and informed is your best defense.

Top 3 financial scams that commonly target divorced individuals

1. Debt relief and credit repair scams

These services promise fast fixes to credit problems or to erase negative items from your report—for a fee. Many charge high upfront costs for work you can often do yourself for free.

  • Red flag: Promises to remove accurate negative information or guarantees of a dramatic score jump.
  • Reality: You can check and dispute credit reports for free (for example through AnnualCreditReport.com) and take steps to rebuild credit without paying large fees.

2. Fake “financial advisors” chasing divorce settlements

After a settlement, you may encounter people who guarantee investment outcomes, pressure you to act quickly, or ask for large upfront fees. These are classic signs of fraud.

  • Red flag: High-pressure sales tactics, guarantees, and requests to transfer funds immediately.
  • How to verify: Check credentials through FINRA BrokerCheck or Investment Adviser Public Disclosure, and look up CFPs through the CFP Board. If someone resists independent verification, walk away.

3. Phishing and impersonation scams to steal personal information

Scammers often pose as credit card companies, banks, or other legitimate organizations to trick you into revealing account numbers, Social Security numbers, or online banking credentials.

  • Red flag: Unsolicited calls or emails asking for sensitive details, or messages that urge immediate action.
  • How to respond: Never share bank account numbers or Social Security numbers via email or over the phone unless you initiated the contact and verified the recipient. When in doubt, contact the company directly using a phone number from their official website or statements.

Common red flags to watch for

  • Too good to be true: Guarantees of quick fixes or guaranteed returns.
  • High-pressure tactics: “Act now” or “limited time” to force emotional decisions.
  • Upfront, nonrefundable fees: Especially when combined with vague service descriptions.
  • Requests for sensitive info: SSN, passwords, bank logins, or one-time codes over email/phone.
  • No verifiable credentials: No registration, poor online presence, or unverifiable references.

Practical steps to protect yourself

  1. Pause before you act: Take time to research any offer—especially if it follows your divorce or a settlement.
  2. Verify credentials: Use FINRA BrokerCheck, SEC/IAPD, and the CFP Board to confirm advisors are registered and in good standing.
  3. Check credit for free: Obtain reports from AnnualCreditReport.com and dispute inaccuracies yourself at no cost.
  4. Lock down accounts: Change passwords, enable two-factor authentication, and consider credit freezes or fraud alerts if you suspect risk.
  5. Never send sensitive info through insecure channels: Don’t share SSNs, bank logins, or account numbers over email or unsolicited calls.
  6. Get a second opinion: Before making large financial moves, consult someone you trust—preferably a verified professional or a trusted family member/friend.

Real example

A client received a call from someone claiming to be a credit card representative asking for account details. Because the client checked with us first, we stopped the fraud in its tracks. This is a perfect example of why verification and a short pause matter.

“It’s better to be cautious than to fall into a trap.”

What to do after you receive a settlement or lump sum

  • Create a short plan before you move money—decide on immediate needs, an emergency fund, and longer-term investments.
  • Use reputable banks and brokerages with clear, verifiable reputations.
  • Consider working with a fee-only fiduciary advisor—someone legally obligated to act in your best interest—and verify their registration.
  • Keep records of who you spoke with and any account changes made during the transition.

Final thoughts

Your personal information is valuable and scammers will try to trick you into giving it away. By staying vigilant, verifying credentials, and using the free resources available to you, you can protect your finances during this vulnerable time. Remember: your safety and security are in your hands.

If you want help securing your accounts and spotting scams after divorce, visit Divorce661.com for expert guidance and a free consultation. We offer affordable, flat-fee support to help you move forward with confidence.

What to Know About Filing Taxes as a Single Person Post-Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

What to Know About Filing Taxes as a Single Person Post-Divorce

I’m Tim Blankenship from Divorce661.com. If you’ve recently finalized your divorce, congratulations on taking a big step forward — and be aware: tax season is about to look a lot different. In this article I’ll walk you through the key tax changes that happen after divorce, what determines your filing status, how Head of Household works, common pitfalls I’ve seen, and practical steps to prepare for the next tax year.

“Divorce isn’t just a change in relationship status. It affects your taxes, too.”

Why your filing status matters

Your filing status affects your standard deduction, tax brackets, eligibility for certain credits, and overall tax liability. The difference between filing as single and filing as Head of Household (HOH) can mean a higher standard deduction and lower tax rates — so getting your status right can save you money.

The key date: December 31

The IRS (and most tax systems) determine your filing status based on your marital status on December 31st of the tax year. If your divorce is finalized by that date, you cannot file jointly; you must file as single or, if you qualify, Head of Household.

Who qualifies for Head of Household?

Head of Household is a valuable status, but it has specific requirements. In plain terms, to qualify you generally must:

  • Be unmarried (or legally divorced) on December 31 of the tax year.
  • Pay more than half of the cost to maintain a home for the year.
  • Have a qualifying dependent who lived with you for more than half of the year.

“Pay more than half of household costs” means you contributed the majority of expenses such as rent or mortgage, utilities, groceries, repairs, property taxes, and other household costs. The dependent must meet IRS tests (relationship, residency, and support tests), and residency — who the child actually lived with — is often the deciding factor.

Common documentation to support HOH

  • Records of household expenses (receipts, bank statements, canceled checks).
  • School or medical records showing the child’s primary residence.
  • Custody agreements and parenting time logs.

Real client example: why assumptions can cost you

One client assumed she qualified for Head of Household after divorce because she thought her child lived with her. In reality, the child spent more nights with her ex, so she did not meet the residency requirement. That misunderstanding cost her access to HOH benefits for that year. We helped her correct the filing and put safeguards in place so this wouldn’t happen again.

This is a common scenario. Assumptions about custody, residency, and who paid household expenses lead to costly mistakes. Even small differences in who the child lived with can change your filing status and tax benefits.

How we help at Divorce661

We do not provide tax advice, but we do make sure your divorce paperwork aligns with tax planning needs and connect you with trusted tax professionals. Our role is to:

  • Review and structure divorce documents with tax implications in mind.
  • Refer you to tax pros who can give specific, up-to-date guidance.
  • Help you understand financial changes after divorce so you can plan your tax strategy.

Practical steps to prepare for the next tax season

  1. Confirm the exact date your divorce was finalized and how that affects your filing status for the year.
  2. Track and document household expenses throughout the year if you may qualify for HOH.
  3. Maintain clear custody and residency records for dependents (calendars, school records, medical visits).
  4. Consult a qualified tax professional early — ideally before you file — to verify eligibility for HOH or other credits.
  5. Review divorce settlement language about who claims dependents, who pays what, and how tax-related items are handled.

When to consult a tax professional

If you have questions about whether you qualify for Head of Household, who can claim a child as a dependent, or how alimony, property division, and support payments affect your return, speak with a tax professional. They can apply the current tax code to your specific facts and help you avoid filing mistakes.

Conclusion — plan ahead to avoid surprises

Understanding how divorce affects your taxes lets you plan and avoid costly errors. Know your filing status on December 31, document custody and household costs, and get professional tax guidance when needed. If you need help aligning your divorce paperwork with tax planning or want a referral to a trusted tax pro, visit Divorce661.com for a free consultation. Take action now so your post-divorce tax filing is smooth, accurate, and stress-free.

What to Know About Filing Taxes as a Single Person Post-Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

What to Know About Filing Taxes as a Single Person Post-Divorce

Hi, I’m Tim Blankenship from Divorce661. If you’ve recently finalized your divorce, congratulations — and welcome to a new set of financial responsibilities. One of the biggest practical changes you’ll face is how you file your taxes. Filing as a newly single person isn’t just checking a different box: your filing status, deductions, and who claims the kids can all change. Here’s a clear guide to help you navigate tax season and avoid costly mistakes.

Why your filing status matters

Your filing status affects your standard deduction, tax brackets, eligibility for credits, and overall tax outcome. Small differences — like qualifying for Head of Household instead of Single — can mean a significantly lower tax bill. Understanding the rules up front helps you plan your withholding, budgeting, and conversations with tax professionals.

Key rule: the December 31st test

“Your filing status is based on your marital status as of December 31st of the tax year.”

That one line determines whether you file as Married (Jointly or Separately) or as Single/Head of Household for the entire year. If your divorce was finalized on or before December 31st, you will not file as married for that tax year. If your divorce finalizes after the new year, you may still need to file as married for the prior year — so know the exact date of your decree.

Single vs. Head of Household: what’s the difference?

Two common statuses for people post-divorce are:

  • Single: The default if you’re unmarried and don’t meet Head of Household rules. You receive the single standard deduction and standard tax brackets for single filers.
  • Head of Household (HOH): A more favorable filing status for qualifying single taxpayers who maintain a home for a qualifying dependent. HOH typically gives a higher standard deduction and better tax rates than Single.

Do you qualify for Head of Household?

To claim Head of Household, you must meet these key requirements:

  • You must be unmarried (or considered unmarried) on December 31st.
  • You must have paid more than half the cost of maintaining a home for the year.
  • You must have a qualifying dependent who lived with you for more than half the year (with some exceptions for temporary absences).

Meeting all three is critical. If one element is missing, you may be required to file as Single.

Child custody and tax claims: common pitfalls

Child custody arrangements directly affect who can claim the child as a dependent and who may claim HOH. It’s easy to assume you qualify for HOH after divorce, but the reality depends on where the child lived and who paid household expenses.

“We worked with a client who assumed she’d file as Head of Household after her divorce, only to realize that her child had spent more time living with her ex.”

That misunderstanding led to a costly mistake when she filed. Custody schedules, overnight counts, and who pays bills all matter. If you’re unsure, document the child’s residency and expenses, and talk with a tax professional before filing.

Practical steps to take right after your divorce

Use this checklist to reduce surprises when tax season comes:

  • Confirm the exact date your divorce was finalized (December 31st is the key cutoff).
  • Determine where any qualifying children lived during the year and who paid household costs.
  • Update your Form W-4 with your employer to reflect changes in withholding.
  • Review your divorce agreement for tax provisions (who claims dependents, how tax credits are split, etc.).
  • Consult a tax professional if you have complex asset division, alimony/child support questions, or business interests.
  • Keep clear records of custody calendars, major household expenses, and any agreements about who claims the kids.

How Divorce661 helps — and what we don’t do

At Divorce661, we prepare clients for life after divorce, including financial and tax-related changes. While we don’t provide tax preparation or formal tax advice, we:

  • Explain the tax consequences of divorce-related choices.
  • Make sure divorce paperwork reflects your financial and tax agreements.
  • Connect you with trusted tax professionals who can provide specific tax guidance.
  • Help you update withholdings and plan to avoid surprises next tax season.

Real next steps

If you’ve recently divorced and aren’t sure how to file this year, start by getting clarity on the date your divorce was final and documenting your child’s residency and household contributions. Then reach out to a tax professional to confirm whether you qualify for Head of Household or must file as Single.

If you’d like help translating your divorce decree into a practical financial plan and connecting with trusted tax resources, visit Divorce661.com to schedule a free consultation. We’ll walk through how your divorce impacts your taxes and make sure you’re set up for the year ahead.

Conclusion

Filing taxes after divorce is a manageable process if you understand the rules and take a few proactive steps. Remember the December 31st test, confirm residency and expense contributions for any dependents, update withholdings, and seek professional advice when needed. A little preparation now can prevent costly mistakes later.

What to Know About Filing Taxes as a Single Person Post-Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

What to Know About Filing Taxes as a Single Person Post-Divorce

Divorce is more than just a change in your relationship status—it also has a significant impact on your taxes. As someone who has recently finalized a divorce, it’s crucial to understand how your filing status changes and what that means for your tax return. I’m Tim Blankenship from Divorce661, and in this article, I’ll walk you through the key points you need to know about filing taxes as a single person after divorce, common pitfalls to avoid, and how to plan ahead to maximize your benefits.

Your Filing Status Depends on Your Marital Status on December 31st

The most important date to keep in mind is December 31st of the tax year. The IRS looks at your marital status on that day to determine how you file your taxes. If your divorce is finalized by the end of the year, you cannot file as married—you will file either as single or as head of household.

Understanding which status applies to you is essential because it affects your standard deduction and tax rates.

Single vs. Head of Household: What’s the Difference?

Filing as head of household offers a higher standard deduction and more favorable tax rates than filing as single. However, qualifying for head of household status requires meeting specific criteria:

  • You must pay more than half of the household expenses.
  • You must have a qualifying dependent who lives with you for more than half the year.

For example, if you have a child living with you, but that child spends more time living with your ex-spouse, you might not qualify for head of household status—even if you assumed you did.

Real Client Example: Learning the Hard Way

One of my clients thought she qualified for head of household status because she believed her child lived primarily with her. However, it turned out the child actually lived more with her ex-spouse. This misunderstanding led her to lose out on valuable tax benefits. Fortunately, we helped her correct the mistake and avoid similar issues in future years by clarifying the living arrangements and filing requirements.

Why Proper Tax Planning Post-Divorce Matters

Divorce paperwork and tax planning need to be aligned to prevent unexpected tax problems. While we don’t provide direct tax advice, we connect you with trusted tax professionals who can guide you based on your unique situation. Ensuring your divorce settlement reflects tax considerations will help you:

  • Understand the financial changes that come with divorce
  • Avoid costly filing mistakes
  • Maximize your potential tax benefits

How Divorce661 Supports You Through This Transition

Our team at Divorce661 is dedicated to making your post-divorce tax filing process as smooth and stress-free as possible. We assist by:

  • Reviewing your divorce paperwork to align with tax filing needs
  • Referring you to qualified tax professionals for personalized advice
  • Helping you understand and prepare for the financial and tax implications after divorce

Take Action Now to Prepare for Tax Season

Don’t wait until tax season to figure out your filing status and tax strategy. Planning ahead can save you money and prevent headaches later. Know your filing status, understand your eligibility for head of household, and seek professional guidance to navigate your new tax landscape confidently.

If you need help planning your post-divorce tax strategy or want to ensure your paperwork is in order, visit Divorce661.com for a free consultation. Let’s work together to make your transition to single filing status smooth and beneficial.

Summary: Key Takeaways

  1. Your marital status on December 31st determines your tax filing status for the year.
  2. Head of household status offers better tax benefits but requires paying over half of household costs and having a qualifying dependent living with you more than half the year.
  3. Mistakes in filing status, especially regarding dependents’ living arrangements, can cost you significant tax benefits.
  4. Proper alignment of divorce paperwork and tax planning is essential to avoid surprises.
  5. Seek professional help early to maximize your tax benefits and ensure a smooth transition.

Remember, your post-divorce tax filing doesn’t have to be overwhelming. With the right knowledge and support, you can navigate this new chapter confidently and with financial clarity.

 

What Happens If You Need to File Taxes Separately After Divorce? | Los Angeles Divorce

Posted by Tim Blankenship on

 

What Happens If You Need to File Taxes Separately After Divorce? | Los Angeles Divorce Insights

Divorce brings many changes, and one of the most important yet often overlooked aspects is how it impacts your tax filing status. If you’ve recently finalized your divorce or are navigating the process, understanding your tax obligations can save you from unexpected headaches with the IRS and financial surprises during tax season.

In this article, we’ll break down how your marital status as of December 31st dictates your tax filing status, the differences between filing as single or head of household, and key considerations for claiming deductions and credits post-divorce. Along the way, you’ll hear real-life examples and practical advice to help you avoid costly mistakes.

How Your Divorce Date Affects Your Tax Filing Status

One critical factor in determining your filing status is your marital status on December 31st of the tax year. The IRS uses this date as the cutoff to decide if you qualify as married or single for that year’s tax filing.

  • If your divorce is finalized by December 31st: You must file as either single or head of household, depending on your circumstances.
  • If your divorce is not finalized by December 31st: You can still file jointly or separately as married.

This distinction is crucial because filing separately as married or filing as single can significantly impact your tax bracket, deductions, and eligibility for various credits, such as the child tax credit.

Single vs. Head of Household After Divorce

Filing as single is straightforward if you live alone without dependents. However, if you have children or other dependents living with you, you might qualify for head of household status, which offers better tax rates and higher deductions than filing as single.

To qualify as head of household, you generally need to meet these criteria:

  1. Be unmarried or considered unmarried on the last day of the tax year.
  2. Have paid more than half the cost of keeping up a home for the year.
  3. Have a qualifying person, such as a child, living with you for more than half the year.

Understanding which status applies to you can make a big difference in your tax outcome.

Coordinating Claims for Children and Key Deductions

Post-divorce, deciding who claims the children and other important deductions like mortgage interest is essential to avoid IRS conflicts and maximize benefits for both parties. Coordination with your ex-spouse is key.

It’s best to have these agreements clearly outlined in your divorce settlement to prevent confusion later. For example, you might agree that one parent claims the children for tax purposes while the other claims mortgage interest or other deductions.

This proactive step helps ensure both parties understand their responsibilities and prevents costly disputes or IRS audits down the line.

Real-Life Example: Avoiding Tax Filing Surprises

Consider a client who assumed she could file jointly with her ex-spouse, only to realize her divorce was finalized in December—before the tax year ended. Because of this, she was required to file as single, which altered her expected refund and triggered IRS scrutiny.

By adjusting her filing status in time, we helped her avoid penalties and confusion. This example highlights the importance of knowing your exact divorce date and its tax implications.

How Divorce661 Can Help You Navigate Post-Divorce Taxes

At Divorce661, we specialize in supporting clients through the legal and financial transitions of divorce, including tax preparation and planning. Our expertise ensures you:

  • Understand your correct filing status based on your divorce date.
  • Coordinate tax decisions with your ex-spouse effectively.
  • Avoid costly mistakes that could lead to IRS penalties.
  • Gain financial clarity as you move forward.

We also emphasize the importance of having clear tax responsibilities outlined in your divorce agreement, which can make your post-divorce financial life much smoother.

Conclusion: Be Prepared and Informed for Tax Season After Divorce

Your marital status on December 31st is a pivotal factor in your tax filing for the year. Filing as single, head of household, or married (jointly or separately) each carries unique implications for your tax bracket, deductions, and credits.

To avoid surprises and ensure a seamless transition into your new financial reality, coordinate tax claims with your ex-spouse and make sure these details are clearly spelled out in your divorce agreement.

If you’re facing questions about how to file taxes after divorce or want professional guidance, visit Divorce661.com for a free consultation. Our dedicated team is here to guide you every step of the way, helping you navigate post-divorce tax complexities with confidence.

 

How to Navigate Shared Investment Portfolios Post-Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

How to Navigate Shared Investment Portfolios Post-Divorce

Dividing investment portfolios after a divorce can be more complicated than many couples anticipate. While it might seem straightforward to simply split up assets, overlooking the financial and tax implications can lead to costly mistakes. If you’re going through a divorce in California or elsewhere, understanding the nuances of dividing shared investments is essential to protecting your financial future.

In this article, we’ll explore the key steps to effectively divide investment portfolios post-divorce, highlight common pitfalls, and provide practical advice on how to handle brokerage accounts, stocks, and mutual funds without triggering unexpected tax bills.

Understanding California Community Property Laws and Investment Growth

In California, the law generally treats any growth or contributions made to investment accounts during the marriage as community property. This means that typically, any appreciation or additional investments made while married should be split 50/50 between both spouses upon divorce.

Because of this, it is critical to gather comprehensive documentation before dividing assets. This includes:

  • Detailed account statements
  • Cost basis information
  • Purchase dates for all investments

Having this information at hand lays a solid foundation for a fair and equitable division. Skipping this step can lead to disputes, confusion, and potentially significant financial losses down the road.

How to Divide Investment Portfolios: Liquidation vs. In-Kind Transfers

Once you have your documentation, you need to decide how to divide the investments. There are two primary methods:

  1. Liquidate and Split the Cash: This involves selling the investments and dividing the proceeds equally. While this might seem like the simplest option, it often triggers capital gains taxes, reducing the overall value received by both parties.
  2. Transfer Investments In-Kind: This method transfers ownership of the investments directly to each spouse without selling. It preserves the original cost basis and avoids triggering capital gains taxes, helping maintain the full value of the portfolio.

Choosing between these options requires careful consideration. Liquidation can lead to hefty tax bills, while in-kind transfers maintain the integrity of your investments and are generally more beneficial from a tax perspective.

The Importance of Clear Divorce Judgment Language

To avoid confusion and ensure the division is honored, the method you choose for dividing investments must be explicitly stated in your divorce judgment. This clarity is crucial because most brokerages require:

  • A certified copy of the divorce judgment
  • A formal letter of instruction to process the transfer

Without these documents, brokerages may refuse to split accounts or transfer assets, delaying the process and potentially causing legal headaches.

IRS Compliance and Avoiding Penalties

When dividing investments, it’s essential to comply with IRS rules. Proper documentation and following the right procedures can help you avoid tax penalties and ensure the transfer is recognized as a non-taxable event.

For example, transferring investments “in kind” as part of a divorce settlement is typically treated as a tax-free transfer under IRS guidelines, but only if it is done correctly and documented in the divorce decree.

A Real Client Success Story

We recently helped a divorcing couple avoid over $20,000 in taxes by dividing their stock portfolio in kind instead of selling it off. With the right paperwork and a strategic approach, both parties walked away with their fair share—without any tax hit.

This example underscores the importance of understanding your options and having expert guidance through the process.

Protect Your Financial Future with Expert Guidance

Dividing investment portfolios after divorce requires a thoughtful approach, thorough documentation, and clear legal language. By following these steps, you can navigate the complexities effectively and avoid costly mistakes.

If you’re facing the challenge of dividing investments in your divorce, consider working with professionals who specialize in this area. Expert advice can help you:

  • Understand California community property laws
  • Choose the best method for dividing your investments
  • Prepare the necessary legal documents and brokerage instructions
  • Ensure compliance with IRS regulations

Your financial future is too important to leave to chance. With the right knowledge and support, you can secure a fair and tax-efficient division of your shared investments.

For a free consultation and expert guidance on dividing investment portfolios post-divorce, visit Divorce661.com. Protect your assets and move forward with confidence.

What Happens If You Need to File Taxes Separately After Divorce? | Los Angeles Divorce

Posted by Tim Blankenship on

 

What Happens If You Need to File Taxes Separately After Divorce?

Filing taxes after a divorce can be a confusing and stressful experience, especially if it’s your first tax season navigating finances on your own. I’m Tim Blankenship from Divorce661, and I’m here to help you understand what it means to file taxes separately after divorce, how your filing status is determined, and what you should watch out for to avoid costly mistakes.

Understanding Your Tax Filing Status Post-Divorce

The most important factor in determining your tax filing status after a divorce is your marital status on December 31st of the tax year. The IRS uses this date to decide how you must file your taxes:

  • If your divorce was finalized by December 31st: You are considered unmarried for that tax year. This means you will file either as Single or, if you qualify, as Head of Household.
  • If your divorce was not finalized until the following year: You can still file as Married Filing Jointly or Married Filing Separately for that tax year.

This distinction is crucial because it affects your tax bracket, deductions, and eligibility for various tax credits.

Filing Separately: What You Need to Know

Choosing to file separately after divorce can have several implications:

  • Tax Bracket Impact: Filing separately often places you in a different tax bracket than if you filed jointly, which can increase your tax liability.
  • Loss of Certain Tax Credits: Credits such as the Earned Income Credit and the Child Tax Credit may no longer be available or may be reduced.
  • Claiming Dependents and Deductions: Who claims the children for tax purposes, mortgage interest, and other deductions can be affected. These details are typically addressed in your divorce agreement.

If your divorce agreement doesn’t specify who claims what, you’ll need to coordinate with your ex-spouse or seek professional guidance to avoid disputes or IRS issues.

A Real Client Story

We recently assisted a client whose divorce was finalized just days before the end of the year. She assumed she could still file jointly with her ex-spouse. However, because the divorce was official in December, the IRS required her to file as single. This change meant she had to revisit her tax withholdings and adjust her expected refund. Fortunately, with our help, she was prepared and avoided any surprises come tax time.

Why Proper Planning Matters After Divorce

At Divorce661, our services go beyond simply filing divorce paperwork. We help you understand the financial landscape of life after divorce, including:

  • How to handle tax filing status changes
  • Understanding support payments and their tax implications
  • Preparing for financial transitions to maintain stability

Proper planning ensures you stay ahead of potential problems and avoid costly mistakes that many newly divorced individuals face.

Get Expert Help to Navigate Post-Divorce Taxes

If you’re uncertain about how your divorce impacts your tax filing or whether you need to file separately, don’t hesitate to seek professional guidance. At Divorce661, we offer free consultations to help you understand the rules, coordinate with your ex-spouse if needed, and protect your financial future.

Filing taxes after divorce doesn’t have to be overwhelming. With the right support, you can confidently manage your tax status, claim the correct deductions, and avoid unexpected liabilities.

Visit Divorce661.com to schedule your free consultation today and take the first step toward a smoother, more informed financial future after divorce.

How to Navigate Shared Investment Portfolios Post-Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

How to Navigate Shared Investment Portfolios Post-Divorce

Dividing shared investment portfolios after a divorce can be one of the most complex and delicate parts of untangling your financial life. I’m Tim Blankenship from Divorce661, and I’ve helped many couples in California navigate this tricky process. Whether you’re dealing with brokerage accounts, stocks, mutual funds, or other investment assets, understanding your rights and options is crucial to avoid tax pitfalls, delays, or unfair splits.

Understanding Community Property in Investment Accounts

In California, investments acquired or grown during the marriage are generally considered community property, regardless of whose name is on the account. This means that any contributions or gains made during the marriage are typically split 50/50 between spouses. To start, gather full statements from all investment accounts, including details like cost basis and purchase dates. This information helps determine exactly what portion of the portfolio belongs to each party.

Deciding How to Divide Investment Assets

Once you know what’s community property, the next step is deciding how to split it. There are two main approaches:

    • Liquidation and cash division: Selling some or all investments and dividing the cash proceeds. This straightforward method can be simpler but may trigger capital gains taxes and lose potential future growth.
    • In-kind transfers: Transferring shares directly into separate accounts without selling. This method preserves the investments’ market value and avoids capital gains taxes, which can be a smarter long-term strategy.

Choosing the right approach depends on your financial goals, tax situation, and willingness to maintain investment portfolios individually.

Ensuring Your Divorce Judgment Reflects the Division Plan

It’s vital that your divorce judgment explicitly states how each investment account will be handled—whether by liquidation, transfer, or offsetting with other assets. Most brokerage firms require a certified copy of the judgment and a signed letter of instruction before executing any transfers. Confirming that your division plan complies with IRS rules is also essential to avoid unexpected taxes or penalties.

A Real Client Success Story

Recently, I worked with a couple who held a six-figure investment portfolio. Initially, they planned to sell everything and split the proceeds, but after reviewing the tax implications, we restructured the division to transfer the actual investments in-kind. This saved them thousands in capital gains taxes and allowed both parties to benefit from long-term growth. This example highlights why it’s so important to get professional guidance when dividing investments.

How Divorce661 Can Help You

At Divorce661, we go beyond just paperwork. We guide you step-by-step through the best way to divide your investment accounts, coordinate with financial institutions, and ensure your settlement is fair and financially sound. Our flat-fee divorce services include tax-smart strategies designed to protect your assets and maximize their value post-divorce.

If you’re facing the challenge of dividing shared investment accounts, don’t risk costly mistakes. Visit Divorce661.com to schedule a free consultation. We’ll help you protect your financial future and move forward with confidence.

Key Takeaways

    • Investment growth and contributions during marriage are generally split 50/50 in California.
    • Gather detailed account statements including cost basis and purchase dates.
    • Consider in-kind transfers to avoid capital gains taxes and preserve investment value.
    • Make sure your divorce judgment clearly outlines how investments will be divided.
    • Work with professionals who understand tax implications and brokerage firm requirements.

Dividing investment portfolios post-divorce doesn’t have to be overwhelming. With the right knowledge and support, you can protect your assets and set yourself up for financial success in your new chapter.

How to Protect Yourself Financially When Splitting Assets During Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

How to Protect Yourself Financially When Splitting Assets During Divorce

Divorce isn’t just an emotional journey—it’s a financial battlefield. When you’re going through the process of dividing assets, it’s critical to understand the true value and cost of what you’re receiving. Without careful consideration, you could end up walking away with less than you deserve or taking on financial burdens you never anticipated.

Drawing from real-life experience and practical advice, this article will guide you through how to protect yourself financially when splitting assets in a divorce, especially in California where marital assets are divided equally. Let’s dive into what you need to know to make informed, smart decisions that safeguard your financial future.

Understanding the Full Scope of Marital Assets

Many people think of marital assets simply as homes or bank accounts, but in reality, the list is much broader. In California, marital assets include:

  • Homes and real estate
  • Bank accounts and cash
  • Retirement funds and pensions
  • Vehicles
  • Debts, including mortgages and loans

Identifying every single asset and liability is crucial. Missing even one can lead to an unfair division or unexpected financial challenges down the road. Don’t settle for estimates—make sure you have accurate valuations of all assets to avoid surprises.

The Hidden Costs Behind Seemingly Valuable Assets

A common misconception is that keeping the house is always the best outcome. But consider this: the house may come with a mortgage, property taxes, maintenance costs, and insurance. Taking ownership without factoring in these expenses can leave you “asset rich but cash poor.”

“One client almost accepted a deal where she took the house and part of a retirement plan, unaware of the mortgage she’d inherit. This nearly became a financial disaster.”

Balancing your assets is key. You want a mix of assets that provide liquidity—cash or assets that can be easily converted to cash—so you maintain financial flexibility after the divorce.

Retirement Accounts and QDROs: Protecting Your Future Income

Retirement accounts are a significant part of the marital estate but come with their own rules. To split these accounts without incurring penalties or tax issues, a Qualified Domestic Relations Order (QDRO) is necessary. This legal document allows for the transfer of retirement benefits to a spouse without triggering early withdrawal penalties or immediate taxation.

Failing to use a QDRO can result in costly mistakes that reduce the value of your settlement. Make sure your divorce settlement includes provisions for QDROs when dividing retirement assets.

Tax Implications: Plan Ahead to Minimize Burdens

Taxes can significantly impact the net value of your assets. When selling property or investments, capital gains taxes may apply, which could reduce the money you receive from the sale.

Strategizing to minimize tax burdens is essential. This might involve timing the sale of assets, choosing which assets to keep or sell, or consulting with a tax professional to understand your options. A smart financial plan during divorce can maximize your outcome and prevent unexpected tax liabilities.

Real Client Story: Avoiding a Financial Pitfall

Consider the story of a woman who nearly walked away with the house and part of a retirement plan but no liquid cash. Meanwhile, her ex-spouse ended up with assets that were easily accessible as cash. By stepping in and renegotiating the terms, she avoided being stuck with a mortgage and the financial strain that comes with it. This example highlights why expert guidance and a thorough understanding of your assets matter.

Key Takeaways for a Fair and Smart Divorce Settlement

  • Identify all marital assets and debts: Don’t overlook anything, including debts that could become your responsibility.
  • Get accurate valuations: Know the real worth of each asset rather than relying on estimates.
  • Consider liquidity: Aim for a balance between valuable assets and cash or easily liquidated assets.
  • Use QDROs for retirement accounts: Protect these assets from penalties and taxes.
  • Plan for taxes: Understand how capital gains and other taxes affect your settlement.
  • Seek professional advice: Work with experts who can help you make informed financial decisions.

Protect Your Financial Future

Dividing assets during a divorce is complex, but with the right knowledge and strategy, you can protect yourself from costly mistakes. Always ensure you fully understand what you’re agreeing to before signing any settlement. Remember, the goal is not just to divide assets fairly but to create a financially sound foundation for your future.

If you’re navigating a divorce in California and want to ensure a fair and financially smart asset division, consider seeking expert help. A free consultation can provide clarity and help you avoid long-term regrets.

Take control of your financial future today.

How to Handle Changes in Tax Brackets After Divorce | Los Angeles Divorce

Posted by Tim Blankenship on

 

How to Handle Changes in Tax Brackets After Divorce

Divorce is a major life transition that impacts more than just your personal relationships—it can significantly affect your financial situation, especially when tax season arrives. Understanding how your tax bracket and filing status change after a divorce is crucial to avoiding unexpected tax bills and managing your finances confidently moving forward. In this article, I’ll walk you through the key tax considerations after divorce, share real client experiences, and offer practical advice to help you stay in control of your post-divorce tax obligations.

Understanding Your New Filing Status

One of the first and most noticeable changes after a divorce is your tax filing status. If your divorce is finalized by December 31st of the tax year, you can no longer file as married filing jointly or married filing separately. Instead, you’ll need to file either as single or head of household, depending on your custody arrangements and whether you financially support a dependent.

This shift in filing status can have a major impact because it often moves your taxable income into a different tax bracket. The tax brackets for single filers and heads of household differ from those for married couples, which means the rate at which your income is taxed may increase or decrease. This change alone can lead to surprises if you don’t prepare for it ahead of time.

How Spousal Support Affects Your Taxes

Another important factor to consider is how spousal support (alimony) influences your tax situation. For divorces finalized after 2018, spousal support is no longer tax-deductible for the payer, nor is it considered taxable income for the recipient. This change in tax law means that while spousal support won’t directly affect your taxable income, it still plays a critical role in your overall financial picture.

If you are paying or receiving spousal support, it can influence whether you move into a higher or lower tax bracket based on your total income. Understanding this impact can help you plan your finances more effectively and avoid unexpected tax liabilities.

Child-Related Tax Credits and Dependent Claims

If you have children, tax credits related to dependents can help reduce your overall tax liability. The Child Tax Credit is a significant benefit, but it’s important to remember that only one parent can claim a child as a dependent per tax year. This allocation should be clearly outlined in your divorce agreement to prevent conflicts when filing taxes.

Properly managing who claims the child-related tax credits can make a big difference in your tax outcome and help both parents maximize their benefits without running into IRS issues.

A Real Client Story: Avoiding a Tax Bracket Shock

We once worked with a client who was caught off guard by a higher tax bracket after her divorce. She no longer qualified for certain deductions available during her marriage, which increased her taxable income. Because she hadn’t adjusted her tax withholdings, she faced a large, unexpected tax bill.

By reviewing her W-4 form and adjusting her withholdings, we helped her prepare for the new tax reality. This proactive approach saved her from owing thousands of dollars and gave her peace of mind moving forward.

Planning Ahead With Divorce661

Divorce661 is dedicated to helping you navigate the financial changes that come after a divorce—not just the legal process. Understanding how divorce affects your taxes is a key part of planning your post-divorce life.

We assist clients in:

  • Understanding new filing statuses and their tax implications
  • Adjusting tax withholdings to avoid surprises
  • Clarifying dependent claims and child tax credits
  • Adapting financial strategies to fit your changed circumstances

If you’re recently divorced and want expert guidance on how these changes will impact your taxes, visit Divorce661.com to schedule a free consultation. We’ll help you stay in control of your tax future and avoid the stress of unexpected tax bills.

Key Takeaways

  1. Filing status changes: After divorce, you file as single or head of household—not married.
  2. Spousal support: No longer tax-deductible or taxable for divorces finalized after 2018, but still impacts your overall income.
  3. Child tax credits: Only one parent can claim a child per year; this must be clarified in your divorce agreement.
  4. Adjust your withholdings: Review and update your W-4 to reflect your new tax situation and avoid surprises.
  5. Plan ahead: Work with professionals who understand post-divorce tax implications to create a solid financial strategy.

Divorce doesn’t have to mean financial uncertainty. With the right knowledge and support, you can confidently manage your taxes and protect your financial future.