A divorce can have a dramatic impact on your life. This may feel like the understatement of the century if you are going through a divorce right now, but for those who are in the contemplation stage a divorce’s potential impacts may not seem as far-reaching right now. If you find yourself considering a divorce the best thing you can do to prepare is to learn about those issues that have caused problems for people that have already been divorced.
Obviously, every divorce is different but there are some common threads between your potential divorce and those that have come before you.
Specifically, if you are considering divorce it is likely that you and your spouse have experienced financial problems. No, I don’t know anything about your income or your spouse’s income but I do know that financial problems are a leading cause of divorce in the United States.
With that said if your financial position isn’t quite what you want it to be before a divorce, actually going through the divorce will probably make things worse for at least a short period of time.
By reading through today’s blog it is my hope that you can take a look down the road some distance to avoid potential money mistakes that people make regarding divorce.
How to make good decisions surrounding your divorce
Getting good legal advice can be the biggest difference between having a successful divorce and one that is not. Of course, you can file for a divorce and proceed through the process on your own. There is nothing wrong with this and people do it with varying levels of success.
However, I view hiring a family law attorney to represent you in a divorce as an investment in yourself. This is a short-term, relatively small investment in the grand scheme of your life that can have impacts well beyond the length of your case.
Retirement and pension plans as they relate to your divorce
Do you or your spouse have a pension plan through work? What about a 401(k)? Maybe you both have taken advantage of the tax benefits of a Roth Individual Retirement Account (IRA)? Planning for your future is one of the most important financial steps you can take for yourself and your family, and is one that unfortunately many Americans either choose not to take or are not in a position to be able to choose to do so.
If you can count yourself among the group of people that do have retirement savings then a divorce is a good way to have those savings be severely diminished through no fault of your own.
For one, if you and your spouse have been married for an extended period of time it possible that every dime that you contributed to your retirement account, including growth, has occurred during your marriage. This means that the entirety of your retirement savings could be community property and therefore subject to division in the divorce.
If you have not signed a premarital agreement that divides up your and your spouse’s property in a certain way the community property laws of our state will take over and see to it that your spouse has the ability to receive a portion of the money saved in your name.
Of course, the law would entitle you to the same sort of division in your spouse’s retirement income but whatever your situation you want to be able to receive strong legal advice to protect your nest egg. An experienced family law attorney with knowledge of the various sorts of retirement plans that are relevant to your case is an essential tool to have at your disposal.
Issues specific to people living together who are not married
If you find yourself in a living situation where you reside with your partner but you are not married there are ways that you are vulnerable financially that similarly situated married persons are not. This section will discuss how to best protect yourself and your financial assets if you choose to live with a person that is not your spouse.
You and your significant other live together and may consider yourselves to be “basically” married. I hear this all the time from clients and potential clients of the Law Office of Bryan Fagan. You share in the bills, the care of your child and may even have plans to buy a house together at some point. Sure sounds like a marriage- but, I can assure you that it is not. You and your partner lack the ability to gain the benefits and the protections that married people have just by virtue of the fact that they are married.
If you are not married and do not plan on getting married then you all should take precaution to protect yourselves from a financial standpoint. You and your partner can create legal documents in order so that you can state which one of you owns certain pieces of property.
Additionally, that document can also lay out a plan for how expenses in your home can be paid for or other financial matters like paying for your child’s school or extracurricular activities.
Common law marriage
If you are involved in a common law marriage then you have the ability to share in social security benefits if your spouse passes away. However, if you are merely cohabitating with your partner no such benefits are extended to you.
Formalizing property agreements in the absence of a common law marriage is likely a smart thing for you to do. Look into whatever options are available to you as far as protecting each other from the other passing away or becoming disabled. Again- in a marriage, your spouse would have survivorship benefits under a pension or social security plan. This is a great benefit and provides peace of mind to your partner in the event something were to happen to you.
To meet the requirements of a common law marriage, you and your spouse must agree to be married, hold yourselves out to other people in the community that you are a married couple and then must also reside together as husband and wife.
There is no time length requirement for a valid common law marriage. All three of the aforementioned qualifications must be in place, however, for a common law marriage to occur. As soon as anyone falls off and is not occurring then your common law marriage ceases to be.
A final word on finance and family law
Thinking about your financial future is not fun. If you find yourself in a position where your financial house is not in the order you probably would prefer to just put these issues out of sight and out of mind rather than focusing on making improvements that are not easy to come by. I get that. Asking someone to do something that is difficult is not easy.
With that said, there is no better time to start thinking about these sorts of things than today. You can work with your spouse or your partner to protect each other from a financial perspective. The peace of mind that these decisions can bring you are well worth it- that much I can promise you.
Questions about family law and finances? Contact the Law Office of Bryan Fagan
The attorneys and staff with the Law Office of Bryan Fagan understand there is more to a family lawcase then what happens in a courtroom. To learn more about the financial implications of your family law situation please do not hesitate to contact us. A free of charge consultation with one of our licensed family law attorneys is available six days a week. The decisions you make today can have a far-ranging effect on your future and we would be honored to help you and your family make a plan.
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Law Office of Bryan Fagan | Houston, Texas Divorce Lawyers
The Law Office of Bryan Fagan routinely handles matters that affect children and families. If you have questions regarding divorce, it's important to speak with one of our Houston, TX Divorce Lawyers right away to protect your rights.
Our divorce lawyers in Houston TX are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan handles Divorce cases in Houston, Texas, Cypress, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.