Finances Involved in a Texas Divorce

When navigating Texas divorce finances, it’s essential to focus on two key areas. First, ensuring the well-being of any children involved through thoughtful child custody arrangements is paramount. The second area involves addressing financial matters, including assets like your family home, business, and retirement accounts. In this blog post, we’ll dive into the financial components that are crucial to understand in a Texas divorce. While every divorce is unique, I aim to provide clarity on common financial issues that may impact your case, helping you prepare for the complexities ahead.

Your family home

The central component of your short-term financial life is the family home. For most of us, we will not make a larger expenditure in our lives than the purchase of a home. The home, whether you’ve lived in it for one or five years, is central to both finances and family life. Consider key factors about the home, like its role in the divorce and post-divorce plans.

You should determine whether your family home is Community property. If the house was acquired during your marriage, it’s likely considered community property. It can be divided in the divorce between you and your spouse. It doesn’t matter if neither your name nor their name appears on the note or deed to the home. As long as the home was acquired during your marriage, it’s still considered Community property.

Considerations and financial impact

If you purchased the house before your marriage, it constitutes separate property and is not divisible in the divorce. However, it’s essential to acknowledge that if community property income contributed to mortgage payments or home improvements, your spouse may have potential reimbursement claims that you should consider. Otherwise, prepare for the house to be an issue that you must deal with financially during the divorce itself.

Once you confirm the house is Community property, weigh your options for its handling during the divorce. In most divorces, one spouse will leave home while the other remains in the house. Oftentimes the spouse who chooses to remain in the house will do so. They will raise the children in the house for the duration of the divorce. If you want primary custody of your children after the divorce, stay in the house as long as possible. Choosing to leave home voluntarily may suggest to some judges that you’re less committed to full-time childcare. It may give the impression that you are not as interested in being in the house after the divorce, either.

Another aspect of homeownership that is relevant in a divorce is the decision to remain in the house after the divorce or sell the home as part of the divorce proceedings. Typically one spouse will move out of the house as a condition of the divorce. After the divorce concludes, the spouse who chooses to remain in the house or is awarded the house is responsible for making any mortgage payments on the property. This presents several different financial issues that you need to be aware of as you finish out your divorce case.

Affording the family home

If you are awarded the house in a divorce, can you afford to remain there? You may often request something in the divorce without being prepared to handle the consequences of actually obtaining it. The family house is something that many people would like to be able to maintain and live in after the divorce is over with period; it may be that you have received primary custody of the kids and want to stay in the house to increase the stability of your children’s lives after the cases come to a close. I can’t say that I would blame you on many levels for having this feeling.

However, it’s crucial to recognize that the payments on the house have likely been made jointly with your spouse. Now that you and your spouse are divorcing, your income will significantly decrease. You must assess your budget and determine whether you can afford to make those payments solely on your income. The last thing you want is to strain your budget to the limit before even adjusting to life as a single person with a new budget.

As a result, you and your attorney should perform a somewhat detailed analysis of your finances after the divorce to determine whether or not it is in your best interest to remain in the house after the divorce. Even if you desire to remain in the house and you think a judge would award the house to you, that does not mean that it is in your best interest. On the contrary, it may be in your best interest to have the house sold in the divorce and to take the cash you make off the sale to fulfill some other financial obligation that you have.

Key documents for handling the family home in divorce

If you decide to remain in the house, two documents must be executed as part of your divorce proceedings. The first document is a deed of trust to secure assumption. This document is signed by your spouse and then by you. The purpose of the deed of trust to secure assumption is to enable your spouse to protect themselves after the divorce if you stop making payments on the home. For example, if your house were to go into foreclosure after the divorce, this deed of trust is a secure assumption that would allow your spouse to secure the home and make payments on it. They would be able to take an ownership interest in the house and not have their credit ruined by you not making payments on a home that bears your name and your spouse’s name on the note.

The other document that I think will be wise to execute in this scenario would be a special warranty deed. The special warranty deed would benefit you in that your spouse would deed over tou all of their interest in the home moving forward. This would prevent them from getting in your way if you wanted to sell the home or otherwise income for the home with a home equity line of credit or perform any other action with the house. Both of these documents are essential to the proper handling of a family home after a divorce. Do not let your case conclude without asking your family law attorney about the significance of these documents.

How to divide your community estate

We have already discussed Community property to a certain extent in this section on your marital residence. Community property is divisible in a Texas divorce. You should expect any property or debt accumulated during your marriage to be on the table as eligible for division. Your house likely represents a good chunk of your community state along with personal property, vehicles, investments, and simple checking or savings accounts.

Once your community estate is defined, you and your spouse must negotiate the division of the property within it. If fault grounds for the divorce are not being asserted, other factors may influence how your Community property is divided in a trial. These factors include your and your spouse’s ages, educational backgrounds, work history, health, and the number and value of separate property items you own.

These are the factors a family court judge considers when dividing your property. However, it’s unlikely that your divorce case will reach a judge for this decision. This suggests that you should focus on preparing for the negotiation session with your spouse rather than preparing to argue in court. You and your spouse have the ability to create your own plan for distributing and dividing your community property. As long as your chosen method is fair, a judge is likely to approve it.

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Child support

As the primary conservator in your divorce, you’re entitled to child support from the possessory conservator. This amount is based on the number of children under 18 or not yet graduated from high school. The court assesses various factors, including the number of children, and follows Texas family code guidelines. For example, if there’s one child, the guidelines usually recommend 20% of the possessory conservator’s net monthly income for child support.

The percentage increases by up to 50% for each additional child before the court. Note that the Texas family code guidelines are suggestions, not mandates, for you and your spouse. Nevertheless, based on my experience, these guidelines are commonly adopted by most individuals navigating a divorce. That said, if you have specific circumstances that warrant deviation from the guidelines, it’s advisable to consider doing so. Factors such as the health and well-being of your child, logistical considerations regarding your ex-spouse’s ability to visit with the children, or other unique expenses not typically encountered in divorce proceedings may influence your decision.

You and your spouse know your family circumstances much better than anybody else. As a result, you all should feel motivated to negotiate with one another over any subject, specifically child support. This can be a very personal subject since it involves receiving money from an ex-spouse to help support your children. It is best to look at a way to support the kids and not exact any “payback” against your spouse. It may be that you will need to re-enter the workforce after your divorce. This may be your reality but is not something that child support is intended to assist you with.

Spousal maintenance/Contractual alimony

Spousal maintenance and contractual alimony are two forms of post-divorce financial assistance. While commonly referred to as alimony in many states, Texas distinguishes them into two categories. Here’s a breakdown of each and the eligibility criteria:

Spousal maintenance is only ordered by a judge after a divorce trial. The judge evaluates whether you can meet your basic needs post-divorce. If not, and your spouse can financially support you, the judge may order them to pay spousal maintenance, often around 20% of their gross monthly income.

If you and your spouse agree on post-divorce financial support, you can choose contractual alimony payments. It’s akin to contract law, so a family court judge’s role is limited to enforcing your divorce decree terms. If your spouse doesn’t pay, the judge can only enforce payments if they’re less than spousal maintenance would have been.

A judge determines spousal maintenance based on your separate estate and accessible community property. It’s only granted if you lack other sources of income, and if you have available property that could sustain you, spousal maintenance is unlikely to be awarded.

The crucial point is that, unless domestic violence is involved, you and your spouse must have been married for at least ten years for spousal maintenance to be ordered. The duration of spousal maintenance can be extended with longer marriages.

Final thoughts on the finances involved in a Texas divorce

In the realm of Texas divorce finances, many aspects of your financial situation are inevitably impacted. At the same time, divorce introduces new financial considerations that may not have been on your radar before. Instead of feeling overwhelmed, use this as an opportunity for thorough preparation. Being proactive, setting clear objectives for your case, and engaging in constructive negotiations with your spouse are essential for navigating divorce successfully. Staying focused on your priorities and having well-organized financial plans are key steps in this process.

To establish meaningful goals, it’s crucial to understand the financial implications of your decisions. This highlights the importance of working with an experienced family law attorney. A lawyer who fully understands your unique circumstances can offer invaluable support, ensuring that your financial interests are protected. With so much at stake, consulting with a knowledgeable attorney well-versed in Texas family law is an investment that will pay off in the long run.

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week via phone, online, and in-person meetings. These consultations are a great way for you to learn more about the world of Texas family law and how your family may be impacted by the filing of a divorce or child custody case.

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Other Articles you may be interested in:

1. Mastering Finances: How to Manage Your Credit During a Divorce in Texas
2. Navigating Divorce Finances- How to Fund Your Divorce
3. How can you protect your finances in a divorce?
4. I Want a Texas Divorce but My Husband Doesn’t: What can I do?
5. Am I Married? – Marital Status in Texas
6. Can I sue my spouse’s mistress in Texas?
7. 6 Tips – On How to Prepare for a Texas Divorce
8. Roadmap of Basic Divorce Procedure in Texas
9. 6 Mistakes that Can Destroy Your Texas Divorce Case
10. Does it Matter who Files First in a Texas Divorce?

Law Office of Bryan Fagan, PLLC | Spring Divorce Attorneys

The Law Office of Bryan Fagan, PLLC routinely handles matters that affect children and families. If you have questions regarding divorce, it’s important to speak with one of our Spring, TX Divorce Attorneys right away to protect your rights.

Our divorce attorneys 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.