The financial effects of a divorce will not only be felt during the process but can have lasting effects after the divorce was finalized. In a marriage where there is a great difference in the parties earning powers, it can leave the party with the least earning power wondering how they will survive financially after a divorce. However, there are a few ways a party can gain financial relief, but they must be granted by the Court.
The state of Texas recognizes community property in the Texas Family Code, and it is defined as any property that is acquired by either spouse during the marriage. This means any property that was acquired before the marriage is considered separate property. Disputes to separate property must be rebutted with “clear and convincing evidence” that the property is separate. Knowing what is separate or community property is important because the court can only divide community property. It is also important to know that any property acquired during the divorce proceeding is still considered community property. With that in mind, these are a few ways a party may entitle to monetary relief.
A qualified domestic relations order (QDRO) is an order from the Court that splits a retirement plan or pension plan accrued by one spouse to a former spouse by recognizing their interests in that plan. This order awards a portion of the plan to an alternate payee (the spouse/former spouse). These portions are not always guaranteed to be an even 50/50 split. The federal law that governs all private-sector pensions is the Employee Retirement Income Security Act aka ERISA, and all QDROs must be subject to this law. Plans that are not covered under ERISA can include military retirement pay; State, Municipal, and Federal Retirement Plans; Individual Retirement Accounts (IRAs); and most deferred compensation plans. Knowing exactly how much you are entitled to be important as well. A recipient that is a former spouse is only entitled to their share of the plan that was accrued during the marriage. Any money acquired before then is still considered the plan participant’s separate property.
The next financial relief a person can be entitled to be in the form of either spousal support, spousal maintenance, or alimony. All three are defined differently, and it is important to understand the difference between them.
To begin temporary spousal support can be awarded to the other party during the divorce suit only. This income is meant to help support the dependent spouse during the divorce proceeding until there is a final resolution regarding finances. It is only meant to cover the necessities that include food, shelter, clothes, and medical care. This temporary spousal support can be considered during the division of community property, and the providing party may be entitled to reimbursement through the community estate. The party requesting temporary support must prove they can’t pay for the necessary living expenses, and that the other spouse has the resources to provide the support.
Spouses that remain unable to support themselves can request spousal maintenance for a period after the divorce is finalized. Many former spouses believe they will be entitled to the remainder of their lives, but spousal maintenance is only guaranteed for a period following the divorce. Post-divorce spousal maintenance can be ordered to make a spouse pay involuntarily, but there are factors the dependent party must meet that are defined in the Texas Family Code.
These requirements begin with the requesting party needing to plead for spousal maintenance by filing with the court. Secondly, they must show that they lack the resources and property to afford their reasonable needs. Being married to a spouse for ten years or longer is a requirement in most cases to be awarded spousal maintenance. Next, the dependent party will need to show that they will be unable to earn them enough income to support their minimal needs and that they have diligently attempted to earn enough income or develop those skills necessary to do so. Other factors that will be considered in awarding post-divorce spousal maintenance can include if domestic violence was committed, or if the dependent spouse has a disabled child that will prevent them from becoming employed.
In many cases where spousal maintenance has been awarded there is usually a cap on how long it will be awarded, the most being ten years for marriages that have lasted 30 years or more. Marriage lengths of 20-30 years cap out at 7 years, while marriages lasting between 10-20 years are limited to no more than 5 years. If you are a disabled spouse, the court can order spousal maintenance for as long as the spouse continues to satisfy the disability requirements. In actual amounts, the court will award no more than either $5,000.00 or %20 of the paying party’s average gross monthly income, the lesser of the two.
Lastly, alimony is a second type of spousal maintenance that is agreed to voluntarily between the parties. It is commonly referred to as “contractual maintenance” or “contractual alimony” and is decided between the parties as to how much and how long the alimony will last. The dependent spouse does not have to prove they meet any eligibility requirements.
The expenses of raising a child are not always cheap, and if you are wondering how you will survive financially after a divorce it may bring some relief to know child support can help. If there are children involved in a divorce it is most common that child support will be awarded. Physical custody of the children determines who will have to pay child support. The party in possession of the children is known as the custodial parent, and the obligated party is known as the non-custodial parent. The non-custodial parent’s parental duties are fulfilled by providing the custodial parent with child support. Child support amounts are determined based on a percentage of the non-custodial parent’s income. Beginning with one child, the non-custodial parent is obligated to pay 20% of their monthly net resources. With each additional child, the percentage amount is increased by 5%. Five or more children are always required to pay at least 40%.
Surviving financially after a divorce is not impossible, as there are options imposed by the Court that can give a party financial relief during and following a divorce. However, most often this will mean that a party with financial needs will need to learn to live within their means after their divorce. Knowing what you may be entitled to through the community property division is important to help parties get a jump back on their feet. Financial advisors are available to help someone struggling with budgeting finances and should be consulted if you believe any former relief listed above will not properly cover all reasonable needs.
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