One of the most important aspects of divorce relates to how your property will be divided. Whether you consider yourself to be rich, middle class, poor, educated, uneducated, financially responsible, or a money mistake waiting to happen, you need to understand just how important financial subjects are in a divorce. Going through a divorce is not like going through a breakup with a significant other. When you are married, especially in a state like Texas, the implications on your finances can be significant. What you do not pay attention to now can come back to bite you seriously.
First, a Texas divorce will determine whether property owned by you and your spouse falls into one of three categories: your separate property, your spouse's separate property, or the community estate which is owned by both of you. Property owned by either you or your spouse from before the divorce will belong to you all separate from the other. This property cannot be divided in the divorce. The dresser or car owned before your marriage that you bought with your first few paychecks after college is not going to be divided in the divorce. Similarly, a house that you and your spouse purchased during the marriage will need to be divided in some way given that it will count as community property likely.
Another issue that may be relevant to you and your spouse is whether spousal maintenance will need to be paid. Spousal maintenance is what many people commonly refer to as alimony when we talk about spousal support after a divorce. While many consider spousal support post-divorce to be only something that relates to the rich and famous, it may surprise you to learn that regular people end up receiving and paying spousal maintenance in divorce cases with great regularity. What matters are several factors like your ability to provide for yourself after a divorce, your spouse's ability to pay you spousal maintenance as well as the circumstances you find yourself in as far as job prospects, your health, your age, and many more.
Spousal maintenance and community property division are related in a divorce case. Judges may hesitate to award you spousal maintenance even if you otherwise deserve to be paid maintenance based on the circumstances of your case. The reason why this is the case is that if a judge can award you a disproportionate share of your community estate rather than ordering your spouse to pay you maintenance for a certain period after the divorce that may be an attractive option for him or her to consider. Spousal maintenance is not a longstanding right in Texas. It is only since 1995 that judges here could order one spouse to pay another spousal maintenance after the divorce has concluded. Bear this in mind when you are asking for spousal maintenance- how will you negotiate for community property division?
How will you learn what your spouse is basing their negotiations on?
Have you ever found yourself looking at another person and pondering: What is/was he thinking?? It could be a person on a game show who wagered a significant dollar figure on a low-odd bet of some sort. Or you could be at the stadium watching an athlete make a questionable decision when the season is on the line. Whatever the case may be, I think it is safe to say that all of us have thought once or twice to ourselves that another person must be off their rocker to believe or say something. Human beings are funny as a general rule and you may never get a satisfying answer as to why someone made a particular decision or choice in conjunction with a divorce.
That is what exchanging financial information has to do with a divorce. Rather than pondering what your spouse is thinking with a settlement offer or negotiation tactic, you and your spouse will exchange financial information to give each other a better idea of the information on which he or she will be basing their settlement negotiations. This degree of transparency encourages open and honest discussion about what the divorce means to the two of you from a financial perspective and what you all seek to accomplish with your negotiations. This way you are hiding information or your true intentions at the end of the day. Hopefully, this process will lead to more equitable settlements as well as a faster resolution to the case for you all involved.
However, it is understandable for you or your spouse, or both of you, to be hesitant to turn over financial information unless you are ordered to do so. The courts have specific rules that can be enforced that will allow a court to assess fines and penalties for the failure to cooperate with a valid request for information in a divorce. On top of that, your behavior may rise to the level of harming your ability to receive a proportionate share of your community estate. This is a double whammy- to be fined for your failure to turn over simple financial information to your spouse and to see your community estate divided in a way that favors your spouse.
The attorneys with the Law Office of Bryan Fagan are here to walk you through this important topic. Do not get bogged down in worrying about how you are going to make it after your divorce has come to an end. Rather, you can take concrete steps to better your position about your divorce simply by learning the basics of your case and helping to begin positioning yourself for a fair share of the community estate. A free-of-charge consultation with one of our licensed family law attorneys is available six days a week in person, over the phone, and via video.
While it is great that you have taken the initiative to learn about the law via a blog post like this one, the reality of the situation is that you need advice and perspective about information sharing that is based on your specific circumstances. When you can understand the law, how it is applied and how it is impacted by your circumstances then you are well-positioned to be able to make decisions in your divorce. You can reach out to our office by phone, in person, or via video. Do not make the mistake to wait too long to learn about this subject. Rather, take the time necessary to have a solid foundation of knowledge before contacting our attorneys to learn more about how the law will function within your life.
Our attorneys represent clients every day in courtrooms throughout southeast Texas and beyond. It is an honor to serve our neighbors on what could be the worst day or the most stressful day in someone's life. Hopefully, your divorce will not be the low moment of your life, but you can prepare as if it may be by learning the law and understanding those implications for your own life now and in a post-divorce world. You do not need to devote your life to studying this subject but the benefits of taking the time necessary to learn what you need to can have a profound difference on how you approach your case and your spouse in a settlement on community property division.
Turn over your information- even without the discovery
When we consider what Texas family law states regarding turning over financial information in a divorce, we see that you and your spouse need to have your ducks in a row at the very beginning of your case. Within thirty days of an Answer being filed in your divorce, you and your spouse must turn over financial information to the opposing spouse. This is true whether formal discovery requests are made. Thirty days in the grand scheme of divorce is a quick turnaround. It pays to be prepared with this information early in the divorce, so you are not struggling to find this information or having to enlist the help of your attorney's staff to help you organize it all. This will cost you time and money. Rather, you can begin to collect this information and organize it as best you can once you understand that a divorce is coming.
The next question that we need to ask ourselves is what information needs to be turned over to your spouse. Real property documents like deeds, leases, and liens are part of the documentation that you need to produce. If you own a home with your spouse and that, is it then you don't necessarily need to pull the deed from the county clerk's office. Rather, you can simply document ownership of the home and move on to the next subject. Investment properties are other types of real property that do need to be discussed with one another in the hopes that you can work to figure out how to divide the property or reimburse the spouse who does not own the separate property.
Retirement savings are not the most exciting part of divorce by any stretch of the imagination but they sure are important, nonetheless. Just think about all the hard work that you put into amassing retirement savings at this stage of your life. Now that you are heading towards a divorce it is likely that a chunk of your retirement savings is potentially subject to division in the divorce. You are obligated to produce statements showing what the money is invested in, what portion is community property (in your opinion) as well as any other documentation regarding retirement savings that could be helpful.
One helpful thing that you can do at this point in the case is to contact your retirement plan administrator to determine what will need to be included in your qualified domestic relations order if the plan is determined to be subject to division. In a QDRO you must include specific language as mandated by your retirement plan administrator. This means that you and your attorney cannot make up the language that you include in the document. Rather, the plan will not divide up your retirement savings unless the correct language is included in the QDRO. As such, be sure to check with the plan administrator who will likely have a sample or draft QDRO that can be incorporated into the document that you and your attorney draft. Mistakes made in drafting a QDRO can both slow down the process of getting your plan divided and cause you to suffer delays in completing your divorce.
Insurance statements are also a part of this discussion, though they are often overlooked even in divorces where attorneys are experienced practitioners of the law. Insurance plays a major role in our lives even if it is not something that we think about constantly. For starters, health insurance is a major concern for many people who are going through a divorce. If you are someone in your golden years, then you are likely more concerned with your health now than you were a decade or two ago. As such, losing your health insurance is something that would be among the worst outcomes of a divorce that you could think up. Fortunately, if you are on your spouse's health plan through his employer, he cannot remove you during the divorce. However, once the divorce is done and over with your options are limited to getting on to a COBRA plan or finding health insurance through some other avenue.
Life insurance is another subject that you consider regarding your divorce. If you have life insurance, the beneficiary of your life insurance policy is likely none other than your spouse. This was great while you two were married, but now that you are divorcing you will need to update your beneficiaries as soon as you can. Likely this will be as soon as you are divorced. Go ahead and contact the life insurance company to see how you should go about doing this. It would be a shame for something unforeseen to happen immediately after the divorce where you pass away, and those life insurance benefits end up in the hands of your ex-spouse. Even if he or she does the right thing and tries to pass the money along to the correct people there are tax implications that make doing so tedious.
Bank statements are the last broad category of documents that will need to be turned over to your spouse in a divorce. Checking accounts, savings accounts, brokerage accounts, and the like are what I am referencing here. These are simple enough to produce. Much of the time will be spent determining how much of an account is community property or separate property belonging to either one of you. That can be tedious, but it is even more tedious if the two of you are not on the ball in providing account information to the other person.
Finally, we need to consider spousal maintenance as a part of the financial aspects of a divorce. If the court finds that you lack sufficient assets to provide for your minimum basic needs, then you may be awarded spousal maintenance in the divorce. First, what was the cause of your divorce? A difference in personalities will not make a difference when it comes to spousal maintenance in divorce. However, if your spouse cheated on you and in doing so wasted community income then this could certainly become an issue that you have to think through when it comes to negotiating on this subject.
Next, under most circumstances, you and your spouse will have needed to have been married for at least ten years in most cases for spousal maintenance to be awarded. Even then, judges can only hand out spousal maintenance awards that last for up to ten years under the laws contained in the Texas Family Code. As you can tell, these are not the kind of awards that can lead a person to be able to live in the lap of luxury for the rest of their lives. Rather, the relatively short duration of spousal maintenance is supposed to act as a catalyst to help you find work.
When you consider all the different sorts of financial documents and information that must be turned over to your spouse in a divorce it is no wonder why people in your shoes make mistakes. The best way for you to avoid potential mistakes in a divorce is to consult with an experienced attorney with the Law Office of Bryan Fagan. We can sit down and talk through whatever issues you are facing in your divorce while answering questions and providing information in a friendly environment.
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 in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family's circumstances may be impacted by the filing of a divorce or child custody case.
