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Many people overlook the importance of financial matters in family law cases. However, your divorce will largely hinge on finances and related issues. A wise person once said that a divorce is essentially a business transaction. If you strip away the emotions and heartache, you end up dividing assets much like a business liquidates its property before closing down. While this perspective may not be the most palatable, it holds some truth. To navigate this process effectively, you will need to prepare financial statements for family court. These documents provide a clear picture of your financial situation and are essential for dividing assets and determining support obligations.
Spousal Maintenance and Financial Statements in Texas Divorce CasesSpousal maintenance
Court-ordered spousal maintenance is an issue frequently discussed in divorce cases where the parties were married for more than ten years. This is the minimum length of time that a marriage must have lasted before post-divorce spousal maintenance is considered by a court. Texas does not have alimony like you may have heard about in so many other states. We hear from time to time about divorce courts in different states awarding alimony to a spouse- many times the paying spouse is someone rich and famous. However, in Texas, we don’t have alimony like in those other states.
On the contrary, in Texas, we have something called spousal alimony, which is like alimony, but it differs in some regards. Spousal maintenance can only be ordered by a family court judge. Therefore, you must proceed to a divorce trial to have it ordered in your case. You can still negotiate for post-divorce spousal support with your spouse, but it would be called contractual alimony. The two of you are free to negotiate on this subject but there is no requirement that you agree to anything specific when it comes to post-divorce spousal maintenance.
Eligibility and the Importance of Financial Statements
Spousal maintenance can only be ordered by a judge if you have been married to your spouse for at least 10 years or you have been the victim of domestic violence where your spouse was found guilty within the past two years. In those circumstances, a judge can order spousal maintenance with a limit of twenty percent of their gross monthly income going towards maintenance. On top of that, you need to be able to prove that you cannot meet your minimal basic needs with maintenance. This is a tough one for many people to prove and sheds some light on why financial statements are so important when it comes to determining spousal maintenance awards.
To show a judge that you should be considered for spousal maintenance you need to be able to produce evidence. A financial statement showing your monthly bills and your income is a good place to start. For example, if you can show a judge that your current income (if any) does not equal more than your rent, grocery, and insurance payments then you are in a good position to win spousal maintenance assuming that you and your spouse have been married for at least ten years. The clearer you are in the documents that you produce the better off you will be. The less a judge must scratch their head as to the meaning of something the more likely you are to win on this request.
Adjusting Expectations and the Role of Legal Support
One final thing that I will mention to you is that minimal basic needs do not equal living the lifestyle to which you have become accustomed. If you are used to vacationing, eating, and living like a person who has a $250,000 household income you may need to adjust your expectations now that your household income is less than that. Again, I think the movies have some people fooled into thinking that you can ask for spousal maintenance to continue to live a lavish lifestyle. That may be true on the silver screen but in Texas that won’t fly. Judges are hesitant to award spousal maintenance. They would rather, for instance, award a disproportionate share of the community estate to the spouse in question who needs financial support. So, you need to have all your ducks lined up just to win a spousal maintenance award in a trial.
This is more reason to have an experienced family law attorney by your side as you attempt to win spousal maintenance. We just talked about how it is not easy to win spousal maintenance. You need to demonstrate your necessity, prepare adequately, gather strong evidence, and present it convincingly. An attorney with the Law Office of Bryan Fagan has been there and served many clients in these exact circumstances. When every dollar counts in your divorce you need experienced and caring lawyers there who can advocate for you and not back down. Contact us today so we can speak to you for free about your case and your options.
What goes into a financial statement for a divorce?
You will need to disclose your assets first. Assets are any property that you own. Assets are items you can sell to help you manage financially right after your divorce. When we talk about assets we can think of big valuable things as well as smaller investments and personal items that may be of value. The more detailed you can be, the better. If you leave this information out, you may find out that your spouse will ask you to supplement the financial statement with a listing of more detailed information regarding your assets. This is more work for you and likely more you must pay your attorney to fulfill this request.
Your liabilities or debts are also going to be relevant here. If you have assets that are all well and good but if those debts are something that will cancel out those assets and their value that is another subject altogether. The more debt that you have means the more payments you will have to make each month. This severely cuts into your take-home and will impact your ability to pay or receive temporary spousal support during the divorce.
You will submit a summary of income and expenses for you and your spouse to the court. This worksheet will outline your disposable income, budgeting, and overall financial situation. A judge will use this information to assess your finances and your family’s needs during the divorce. Be sure to include additional expenses such as children’s doctor visits, medications, and school tuition. The more detailed your submission, the better you can negotiate with your spouse and inform the judge about your family’s circumstances.
Financial statements and child support
One of the most fought-over issues in all of Texas family law is child support. The idea that one parent must pay the other parent money to take care of their children is a huge hurdle to get over from a mental standpoint. If you are going through a divorce case then the last thing that you probably want to do is pay your ex-spouse what may end up as a lot of money in order so that she can better care for your children. In a perfect world, you would be the one to care for the kids. Now, you must pay money to your ex-spouse, and you have no clear idea of how they are using it.
Perspectives from Both Parents
Many parents face challenges regarding child support during a divorce. Even if you receive child support, relying on your ex-spouse for financial help can be difficult. You might prefer to sever ties completely, but your co-parenting relationship will continue despite the divorce. It’s essential to manage these financial matters now to prevent them from affecting your relationship with your children or your ex-spouse.
The best I can do to frame this discussion is to approach the subject matter from the perspective of both parents. If you are the parent who is receiving child support, then you probably feel like you are spending much more money on the kids and that the child support you receive is not enough to even the playing field between you and your ex-spouse. On top of that, you may make less money than your ex-spouse which only adds insult to injury.
If you are the parent paying child support, you might feel frustrated knowing that you’re sending money to your ex-spouse each month without knowing how they spend it. Your ex-spouse may even ask you for money on top of what you already paid her. The entire scene is a setup for both of you to potentially have negative emotions regarding the entire situation. It is difficult to overcome those emotions to be able to look at the situation objectively.
Understanding Child Support Guidelines in Texas Family Court
In Texas, the family court judge would likely look to a guideline for child support as outlined in the Texas Family Code. The guidelines use a formula to determine child support based on the parent’s net monthly income and a percentage based on the number of children under 18 that are currently before the court. The number of children before the court is not a difficult number to calculate or quantify. What can get tricky is the other part of the equation, namely, being able to determine the paying parent’s net monthly income.
To do this you may need to collect pay stubs, IRS tax returns, and other financial documents to verify your or your spouse’s income sources. Many people have contract jobs, self-employment, and other non-salaried opportunities for work that augment their primary source of income. When it comes to these types of income sources it is important to be thorough.
If you pay child support, remember that this money goes to your children. Holding back on reporting your income can financially jeopardize them. If you receive child support, ensure you accurately assess your needs, as this money is essential for your living expenses. You don’t need to provide receipts for how you spend the support. Instead, focus on ensuring your children receive what they need. Work closely with your attorney to secure the correct amount of child support for your family.
Importance of Accurate Financial Affidavits in Child Support Cases
You typically produce the information about child support in a financial affidavit, which you must submit to the judge before any major hearing in your case. All of the information in the affidavit needs to be accurate. Keep in mind that an affidavit is a sworn statement under oath. Treat the statements you make in your affidavit as if you are giving those statements to a judge in the courtroom. There is no room here for speculation. Make statements that you know to be true and can prove with evidence if needed.
As we mentioned earlier, the more backup evidence you have in this regard the better it will be for your team. This is information that you will need to exchange before a hearing even if you and your spouse do not exchange discovery. Paystubs are a basic document that will need to be turned over to the court and your spouse. Detailing your rate of pay, hours worked, salary and other compensation will help everyone get on the same page as far as your finances are concerned.
Unless you both understand each other’s earnings, you cannot negotiate spousal maintenance or child support effectively. To think that you could do so would be a mistake. Many spouses do not discuss financial matters which is why it is so crucial for the two of you to exchange this information in your divorce case.
Understanding Additional Income Sources During Divorce
There are a host of other types of benefits beyond your income that you or your spouse may earn. These may not be income in the traditional sense but they may be sources of money that greatly help you and your family make ends meet on a month-to-month basis. Examples of these types of benefits include unemployment, disability, worker’s compensation, or any other financial assistance payments from the government.
Your income tax returns are the ultimate source of discovering income sources that you may not have even known about when it comes to your spouse. While he or she could very well not be paying taxes on side income, most people will pay taxes on their income. Many times, you will need to request these documents from your spouse in discovery.
If your spouse has not been involved in paying the mortgage, it’s important to provide them with the home mortgage statements. Again, spouses who go through a divorce typically are not good at communicating with one another. This is not me being judgmental. Rather, I’m just telling you how things go based on my experiences as an attorney. I have seen mortgage payments each month equal 50% or more of a couple’s take-home pay. If the family had wondered, why there were so many problems in paying bills then this would be an easy explanation as to why that is.
Conclusion
In summary, financial statements for family court play a crucial role in the divorce process, as they provide a clear and comprehensive overview of each spouse’s financial situation. Understanding the significance of these documents can help you navigate the often challenging landscape of family law. Treating divorce as a business transaction allows you to focus on the financial aspects, helping you work toward a fair division of assets and protect your rights. Ultimately, approaching this process with a pragmatic mindset can help alleviate some emotional strain, allowing you to move forward more confidently into the next chapter of your life.
These are just a handful of the financial issues that you need to be able to plan around in your divorce. Of course, your specific situation may vary somewhat from the ones that we have described in today’s blog post. If you have any specific questions about what you have read here today, please do not hesitate to contact the Law Office of Bryan Fagan
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