Husband Loves His Wife and Wants a Divorce in Texas "On Paper" for Strategic Financial Reasons?

This article addresses whether there are strategic financial reasons for getting a divorce in Harris and Montgomery County in Texas to take advantage of governmental benefits.

Today I got a call from a man whose first question was “would it be financially beneficial for me to get a divorce?” This question took me a little by surprise. My first thought was “No! Getting a divorce will probably hurt your pocket book a lot.”

After my initial gut reaction, I started ask my caller some questions to get some background on his situation to see if there was anything legally I could do to help him. As I understood his situation his wife had some serious health problems and they were both on fixed incomes. The caller was interested in finding out if he got a divorce "on paper" whether his wife might be able to qualify for more governmental programs without his added income.

I let my caller know I was not sure. I then started to do a little preliminary research while he was on the phone. A few cursory searches and some additional questions to my caller about his wife and his income I was able to see that it might be beneficial. I let him know what I had found out but I would like to do some more research before I gave him an answer and would call him back.

This was not the first time I encountered a husband wanting to get a divorce from his wife because he loved her and wanted to protect her financially. I remember a professor I had while I was still pursuing my bachelor’s degree had mentioned doing something similar. With that in mind I began my research.

Texas Supplemental Nutrition Assistance Program (SNAP)

While my caller was still on the phone I first started looking at food stamps. The first one I looked at was Texas Supplemental Nutrition Assistance Program (SNAP) which is a program to help buy nutritious food.

Below are the household income limits based on household size for this program.

Texas Supplemental Nutrition Assistance Program (SNAP) Household income Limit

Looking at the above table I noticed that a household with only 1 person in it could qualify even if they made $15,301. However a household with 2 people was only allowed to make an additional $5,408.

It appears that if my caller and his wife did not qualify for this program based on their combined income then getting a divorce might make a difference for his wife if it would bring her income below the requirement for a household with 1 person in it.

Section 8 Housing

This information was not as easy to find. Reading the HUD website I learned that in order to be eligible to receive a housing voucher “in general, the family's income may not exceed 50% of the median income for the county or metropolitan area in which the family chooses to live. By law, a PHA must provide 75 percent of its voucher to applicants whose incomes do not exceed 30 percent of the area median income. Median income levels are published by HUD and vary by location.”

I having found out that I then began to try and track down what that meant for Harris and Montgomery County, Texas.

In Harris County:

Harris County Section 8 Household Income Limit

In Montgomery County:

Montgomery County Section 8 Household Income Limit

Based on this information I was able to conclude yes getting a divorce might make a difference in getting governmental assistance for Section 8 housing vouchers.

However, both Harris and Montgomery County’s websites warned that “applications are only available when the voucher program waiting list is open! Please be aware that MCHA is only able to assist families depending upon available federal funding.”

I also saw on the Houston Chronicle website that about 17,000 people apply each year in Harris County but there are only about 2000 vouchers available.

Social Security

My Caller also specifically asked about social security and whether his wife would be able to get more social security if she was divorced. Not having had this issue come up before I continued to research.

My research revealed that there may be an advantage that divorced couples enjoy over married couples. Both divorced spouses can collect a full spousal benefit once they reach full retirement age while letting their own retirement benefit continue to grow through age 70. Married folks can only do this for one of the two spouses.

My cursory research revealed that it is not a given that two spousal benefits are better than one. Much like other questions regarding social security the answer depended on when you were born and when you would be retiring. Fortunately Economist Laurence Kotlikoff, has created a program located at MaximizeMySocialSecurity.com, which allows couples on his site to run the numbers as married and divorced so they can judge for themselves what the best strategy might be.

Tax Reasons

There might be possible tax reasons for getting a divorce. One article I read was about a couple who considered a divorce to avoid Alternative Minimum Taxes. The United States tax code puts many people in a higher tax bracket once they tie the knot. I am not a tax professional and would suggest that anyone considering this for CPA first.

Other Considerations

This is an interesting an interesting topic and one I probably will revisit. It is pretty oxymoronic, that laws concerning taxes and various benefits are so different between married and single people that it might possibly be beneficial to get a divorce.

However, some additional things to consider is that the divorce could mean some additional costs such two households to support in other words 2 rents, 2 electric bills, 2 gas bills, furniture etc. I discuss these considerations in another article I wrote “Should I move out of the marital home during a divorce?” In that article I talk about how “the income that once supported one household stretch to take care of two. This can be a difficult thing to do. For this reason some couples continue living together in the family home because they cannot otherwise afford to support a second household.” My gut reaction is that getting a divorce is not a magic bullet and maybe more trouble then any financial benefit it would provide. However, I also believe this is a very fact intensive problem that would have to be decided for each case scenario.

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Husband Loves His Wife and Wants a Divorce in Texas "On Paper" for Strategic Financial Reasons?