It is not just your retirement savings or business interests that can be affected financially in a divorce.
You will learn quickly in a divorce that the areas of your life are interconnected to one another in more ways than you may think. Today's blog post from the Law Office of Bryan Fagan, PLLC, will center around the varied impacts of divorce on your financial life.
A court will mandate that child support be paid in your divorce to ensure that whichever parent receives the asset can provide a basic lifestyle for your children. If you are the parent who will not have the right to determine the primary residence of your children, this is likely a responsibility that will fall on your shoulders.
At the beginning of your divorce, your attorney will ask you to fill out various forms that disclose your financial status. Your spouse will be asked to do the same to determine your financial lives' relative strength (or weakness). As with any other statement you will be making to a judge, you must be truthful when disclosing your income sources.
In many regards, child Support is a relatively cut and dry subject in Texas. Your net monthly income will be determined, and a percentage will be applied against that income based on how many children you are responsible for. One child before the court means that 20 percent of your net monthly payment will go towards child support. Two children are 25%, three is 30%, and so on up to at the most fifty percent of your net monthly income going towards the support of your children.
The devil, as they say, is in the details when it comes to child support. While it may seem straightforward to calculate child support in terms of percentages, the net monthly income takes some diligence to figure.
Suppose you have multiple sources of income- such as from investments, business interests, etc.- in addition to your weekly job. In that case, you and your spouse may have different ideas about what should and should not be taken into consideration.
Remember that whatever the circumstances are in your particular family, a judge would order child support to provide your children with a comparable level of living in both homes once your divorce is finalized. As your family has been split in two, that means that your family's income has been divided as well. This not only can mean difficulty in paying bills, but it can be difficult for your children as well.
Despite what many people think, just because you have been married for an extended period in Texas does not mean that you are entitled to spousal maintenance as a result. The purpose of having spousal maintenance be ordered in Texas is to help ensure that the spouse who receives the care has the financial wherewithal to support themselves for a certain period after the divorce.
As with child support, you and your spouse will be expected to submit estimates about your financial status, including income, bills, debts, assets, etc., if your case goes before a judge. Spousal maintenance payments are limited to twenty percent of the payor spouse's monthly income.
A typical scenario that leads to spousal maintenance being justified and eventually ordered is if you are a spouse staying a home mother who for decades tended the home and cared for children. In contrast, your spouse went out and earned a significant living for your family.
Your spouse's advanced education, earning capacity, and wealth leave him in a much stronger future position than you. Your sacrifices allowed him to make his income, and you supported him along the way. Depending on the length of your marriage (as long as it was longer than ten years), you will be entitled to specific periods of spousal maintenance. There is always a particular amount of monthly spousal maintenance ordered and a specific duration for the spousal maintenance to be paid.
Courts in Texas may also consider your age and that of your spouse, as well as your health status. Suppose you are unwell due to a medical condition and require medical care for the foreseeable future. In that case, this could be a factor that helps a judge decide about whether or not to grant your request for spousal maintenance to be paid.
What is income?
Anyone who has created even a basic budget understands that two columns need to be filled: income and "outgo" (also known as expenses). With these pieces of information, a court can determine precisely how much surplus one spouse may have and how much of a shortage the other may have. In this section of today's blog post, I would like to spend some time discussing exactly what income means in your divorce.
At its core, income means all earnings you have received from various acknowledged sources under the Texas Family Code. If you are interested in going through each of the authorities, you can search the Code online until your heart is content. For today's purposes, we will discuss the topic on a more broad level.
Wages, salary, commissions, and tips account for the vast majority of income for most people in the realm of spousal maintenance and child support. Also included in income are Social Security payments, disability, and unemployment insurance payments.
As I noted in a prior section of this blog post, if you have investment income from rental properties, stock dividends, these are all excellent sources for payment to be considered as well. More rarely do people experience onetime windfalls like inheritances and lottery winnings. It is advisable to speak to your attorney about these kinds of situations.
What if your spouse has a cash-poor/asset-heavy wealth distribution?
The value of your spouse's natural and personal assets will be considered in a Texas divorce; it is their responsibility to pay you either spousal maintenance or child support. Bank account funds and the value of their stocks and mutual funds can even be considered.
I have seen situations involving business owners stating their income is far lower than their actual level of wealth. The reason being is that business owners can typically write off many expenses associated with their business and do so legally. This allows a valid tax return to be submitted to a court that does not consider the full extent of their material well-being.
Furthermore, it is common for business owners to take deductions from their company's revenue for personal expenses. This could include your spouse's cell phone, car expenses, health insurance, and other costs that are associated with your spouse's personal life.
Their taxable income goes down significantly as a result. I have seen courts take deductions in these areas and add them back into the payment of a spouse trying to avoid the full brunt of their child support or spousal maintenance responsibilities. The justification for doing so is that since your spouse would not be paying these expenses out of their own money (but that of their business), the money that would ordinarily be used to produce these expenses out of your spouse's income are now available for the support of you and your children.
More on expenses, costs, and other financial issues in divorce to be posted in tomorrow's blog.
Please come back to our blog tomorrow to read more about some less discussed yet critical topics associated with finances and divorce. If you have questions about anything that you've read today, please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. We would be happy to set you up with a free-of-charge consultation at our office with a licensed family law attorney. We take great pride in representing the people in our community- folks just like you.
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Other Articles you may be interested in:
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- My Spouse Has Accused Me of Adultery in my Texas Divorce, and I Haven't
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- Sex, Lies, Rock-and-roll, and Adultery in a Texas Divorce
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- Six things You Need to Know Before You File for Divorce in Texas
- Texas Divorce Morality Clause: Be Careful What You Ask For
- What does Insupportability or No-Fault in a Texas Divorce Mean?
Law Office of Bryan Fagan, PLLC | Spring, Texas Divorce Lawyers
The Law Office of Bryan Fagan, PLLC, routinely handles matters that affect children and families. If you have questions regarding divorce, it's essential to speak with one of our Spring, TX Divorce Lawyers right away to protect your rights.
Our divorce lawyers in Spring, TX, are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact the Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC, handles Divorce cases in Spring, Texas, Cypress, Klein, Humble, Kingwood, Tomball, The Woodlands, 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.