is automatically split 50-50.
Texas is a community property state, a 50-50 split
is not guaranteed. You need to understand which
50% you will get. All assets are not created equal.
Your 50% may include the house. If you are forced
to sell it when the real estate market is down,
you end up with less than 50% - plus having to pay
closing costs and commissions. You need to know
if you can afford the 50% you get before you sign
on the dotted line.
will keep all my separate property.
is anything that was gifted during the marriage,
inherited during the marriage, or brought into the
marriage and left in separate name. If the wife
owned a home before she married and changed the
title on the home from her name to both names, she
made a presumptive gift to the marriage. Now the
house is likely to be in the community property
pie and up for division. If she has an inheritance
in an account with only her name on it, that is
her separate property to keep. But, income earned
from separate property is generally community property.
individuals are better off financially than they
were when married.
This is particularly
applicable to women. Studies show that one year
after a typical divorce, the standard of living
of the woman and minor children has dropped by 27%.
Women are 70% more likely to spend their retirement
in poverty than men. Many times women in divorce
have priorities other than long-term financial planning.
They choose to solve the short-term problems at
the expense of the long-term benefit. Agreeing to
a financially fair settlement is one thing, but
getting actual possession of a settlement asset
can be another.
divorce lawyers produce financial statements.
A Certified Divorce
Financial Analyst (CDFA) can produce financial statements
and projections that show you the long-term effects
of proposed settlement offers. A CDFA works with
your attorney as a team to achieve the best results
for you now and for the long run. Your settlement
will determine your standard of living for many
years to come. Consult a divorce financial expert
before establishing or agreeing to the terms of
your divorce settlement.
of property in divorce is tax-free.
is and sometimes it isn't. Your property split will
not be equitable unless income taxes are taken into
account. This is true for stocks, mutual funds and
real estate. If retirement money is split using
the wrong procedure, there can be income taxes and
penalties to pay.
wife should automatically get the home.
Many women try
to keep the home without carefully considering the
long-term costs. Misjudging what she can afford
will put her in financial trouble down the road.
If she needs to sell the home later, she will have
to bear the entire cost, risk and expense of the
property is equal.
Again - all assets
are not created equal. You have one shot at negotiating
your property settlement. You need to understand
how income taxes impact the property you receive.
If you get stock and your spouse gets the bank account,
you might have to pay income tax on the gains when
you sell the stock to get cash. If you get the house
and your spouse gets the retirement, you won’t have
an income producing asset to fund your retirement
husband is obligated to pay for the children's college.
In Texas, the
judge cannot require one parent to pay for college.
However, both spouses can agree to put a provision
in the settlement agreement about who pays for what
when it comes to the children's college costs. Child
support stops after the child reaches 18 years of
age, unless both spouses include further child support
as part of the divorce agreement.
support will take care of our children.
are often the big financial victims in divorce,
as the family typically drops 1-2 economic levels.
This causes children to change schools, friends
and activities. Child support in Texas, as in most
states, is based upon a percentage of net income
from the paying spouse. This might not be enough
for your children. Consider sitting down with your
spouse and calculate the expenses associated with
the children and determine who will pay for those
expenses. Base the support on need versus a guideline.
Maintenance is BAD!
Texas is a limited spousal maintenance
state, which means there are definite restrictions
and limitations placed upon spousal maintenance
being granted by the courts in Texas. Remember,
though, that you and your spouse can agree to anything
and spousal maintenance may
be a win/win situation for both of you. This is
especially true if there is a large disparity in
have to fight to get what I want!
people, when faced with divorce, try to find the
best “hired gun” or “pit bull” attorney to protect
their interests. There are several alternatives
to this type of litigation. One alternative, collaborative
divorce, enables people to work with their spouse,
with separate counsel, and a team of professionals
to resolve the divorce. This helps facilitate a
resolution ending with dignity, respect, and the
ability to protect your interests.
debts are eliminated through the divorce decree.
All joint debts
remain joint debts regardless of what the divorce
decree dictates. Creditors will still hold both
spouses accountable if a bill is late or not paid.
The best way is to ensure that joint debts are eliminated
during the divorce process is by either refinancing
or paying them off with assets.
needs don't change because of a divorce.
majority of your insurance needs will change due
to a divorce. Medical, dental, life, disability,
as well as homeowners insurance will all need to
be reviewed during the divorce to address these
needs. Insist on a life insurance policy on the
“payor” spouse to protect future streams of income
due to child support or spousal
additional paperwork is needed to transfer assets
in addition to the divorce decree, require additional
paperwork to transfer assets into a single owner’s
name post-divorce. In addition, all qualified plans
required a Qualified Domestic Relations Order (QDRO)
to transfer ownership. Ensure this paperwork gets
done at the signing of the divorce decree to ensure
that you get the assets agreed upon in the divorce