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Financial steps to take before a divorce in Texas

Preparing for a divorce from a financial perspective means having a plan. The more diligent you are about preparing a plan for your case the better off you will be. Once your case begins the momentum in speed picks up. Many people lose track of time and find themselves knee-deep in the case without a plan or a philosophy for their case. This is a major mistake. Rather than find yourself in this position it is better to think through the major issues and prepare as diligently as possible.

This is where the attorneys with the Law Office of Bryan Fagan come into play. We offer free-of-charge consultations six days a week. Importantly, our attorneys can spend time with you to discuss how the law interacts with your circumstances. Learning as much as you can about divorce is important. However, the goal should be learning how the law interacts with your specific circumstances. This is where we can help you. Contact our office today for a free of charge consultation.

Determining the financial implications of divorce for your life

To say that the financial outcomes of a divorce are the same for every couple would be a major mistake. Quite obviously, you and your family are in a different financial position than your neighbors. Sometimes the financial impacts of a divorce are quite small for some families. However, for other families, the impact of a divorce may be much more significant. The better prepared you can be for a case the more favorable the outcome in the divorce.

This means considering your personal, financial position to be able to best prepare for your case. Your age, income, debt-to-income ratio, and other factors are all relevant here. For example, a younger person with little debt or assets may not have as much at stake in a divorce. On the other hand, an older person who has a significant amount of debt and assets may find themselves facing a more challenging and important divorce financially. 

However, your circumstances look you need to consider the need for an experienced family law attorney. The more you have at stake in your case the more important it is for you to prepare and have experienced counsel. Working with an attorney can help you better achieve your goals and set yourself up for success after a divorce. 

What subjects are relevant from a financial perspective in a Texas divorce?

It would help, when beginning to prepare for a divorce, to know what subjects are relevant in the divorce. Worrying about the financial implications of your divorce is not abnormal. However, not doing anything about those worries is pointless. It is much better to investigate the process of getting divorced in Texas. From there, you can determine a course of action to take in your case.

Divorce cases are unique in that they relate to almost every issue in your life. From your work to your home to your investments everything is in play for the divorce. You need to have a firm grasp of your financial life to move forward in a divorce scenario. Failing to understand the essentials of your financial life is a recipe for disaster in your case. Those of you who do not think through all the major issues of your financial life will tend to suffer the consequences later.

At a minimum, start to think about the major financial pieces of your life. Your home is a good place to start. Beyond your equity-to-debt ratio, you need to consider whether you are happy with your home. Would you purchase the house again if given the opportunity? The answer to this question will determine in large part how to approach many different areas of your case. Since your home is likely your largest financial asset you should be aware of how the home impacts your life from a financial perspective.

Is your property subject to division in a divorce?

One of the interesting aspects of a Texas divorce is that property in the case is divisible. However, this does not mean that all property you own is subject to division. Rather, you need to learn about how property is divided and what property specifically is eligible for division. From there, you can gain a better understanding of what property in your life may be divided and for what reason. This will eliminate a lot of doubt you may be having about the case and position you better to learn about the critical elements of your financial case.

Texas is a community property state. This means that the property in your case may be divided if it is determined as community property. The general rule of thumb is that community property is divisible. Additionally, community property is generally property acquired during your marriage. Depending upon your circumstances in the length of your marriage most if not all your property may be community property. This tells you that a great deal of the property in your case is subject to division.

However, some of the property you own may not be subject to division. This is when that property is separately owned by you or your spouse. Separate property is any property acquired by either of you before your marriage. Additionally, property acquired during your marriage either by gift or inheritance may also be classified as separate property. Beginning to understand the property you own and the debts you owe will inform you of what is at stake in your divorce, financially speaking.

An inventory and appraisement

Begin by taking a basic inventory of the property you own and the debts that you owe. This does not have to be anything more sophisticated than walking around your house to locate your personal property. Remember to open desk drawers and closets. Document what you were doing by taking photographs. From there, think about vehicles and other property that you own. Then go through your financial accounts in loan paperwork. The more detailed of an analysis that you can perform, the better.

An inventory does not have to be any special that you create. Using technology can help some people who are already familiar with spreadsheets, Google Docs, and the like. However, for others reading this blog post these tools may hinder you. A yellow legal pad and a pen are all you need to create a workable and functional inventory of your property. The point is- to use the tools that are most helpful to you. 

An appraisal should be completed only after you have already completed your inventory. No point in assigning values to items that you have not organized yet. Once you have a list of your property and debts, start to assign a value to each item/. Some property of yours can be “eyeballed” and have a value assigned thusly. For other items, an appraiser may be necessary. Usually, valuable properties like homes and real estate require some external source to determine their value. 

Start to collect documents

Now comes everyone’s favorite activity- organizing! It’s even more fun when you start to organize in connection with a divorce. Ok, it’s not more fun but I thought I would perk you up a bit by saying that. In any event, it is still important to organize your financial documents even if it isn’t much fun. Think of it this way. The more you organize now and the better job you do, the less must be done later. You are saving money and time by organizing your financial documents yourself. 

For your investments this means collecting statements- be they paper or digital. Save them on the cloud or email them to yourself. Yes, you should have online access to everything in the future, but it is just easier to have a snapshot of them at this moment. This way you do not have to go back and constantly search for what the value of a particular account was back on the day you filed for divorce. Save these snapshots in a file and be done with it. Check that box.

Debt matters in a divorce. We don’t like to think about debt, but it is a relevant issue in your case. The debts you owe need to be sorted out in the divorce. The last thing you want is to find yourself in a situation where you have to figure out how to have your debts handled after a divorce. By then, it is likely too late to do anything about them. If you wait until after a divorce to get a firm grasp on your debt, then you are responsible for it. That is, assuming that your name is on the debt. 

Do yourself a favor- run a credit check on yourself

This is good advice even if you are not going through a divorce. When you have an opportunity, go online and run a credit check on yourself. One of the three credit reporting agencies allows you to set up a free account and search all lines of credit/debt in your name. Do not take this for granted. By looking up what you owe you are protecting yourself. It’s not safe to assume that you have only the debt that you are know of. Rather, sometimes a spouse will catch you by surprise. 

Imagine your level of frustration were you to find out that instead of having one credit card on your file you have three. Or that there is a home equity line of credit that your husband used to pay for that backyard renovation last year? He had told you that he could pay for it in cash. Well, not so fast. These are just a few examples of how checking your credit can stand to improve your chances of fully protecting yourself in a divorce scenario. 

If you find that there are debts that you do not recognize on your report, make sure to discuss that with your attorney. Depending upon your relationship with your spouse this is something that you may be able to discuss with him or her directly. Sometimes there are honest misunderstandings about legitimate debt. Other times, your spouse has been taking advantage of you and your trust in them. Trust is one thing. Deception is another. Don’t continue to be fooled by your spouse. 

Child support- it’s a financial issue, too

We like to think of child support as being something only relevant to the custody/children’s issues side of the divorce. However, child support is very much an issue related to your finances. Child support is a budget item each month just like any other bill that you have. True, this “bill” is important as a way that you support your child. Or it is a way for you to receive money that goes to support your child. In any event, child support matters to the financial side of your divorce. 

If you plan on receiving child support, then you should figure out how much benefit the child support will likely be to your monthly budget. Depending upon the amount of child support you expect to receive you may be able to rent a better home for your child. Or, it could be that you don’t have to work a full-time schedule each week. Having more time for your child is a great benefit to receiving consistent child support. 

On the other hand, if you expect to pay child support then you need to know how child support is calculated. The Texas child support guidelines are found in the Texas Family Code. These guidelines are the basis for many child support orders in Texas. Taking your net monthly resources and then multiplying that against a percentage determines a guideline level of support. The more children you have before the court, the higher that percentage gets. 

Spousal maintenance

Many of us are familiar with the concept of alimony from movies and television shows. However, you may be surprised to learn that alimony is not a common feature of Texas divorces. On the contrary, what we commonly think of as alimony is something called spousal maintenance. Spousal maintenance can only be ordered by a judge in limited situations. These limited situations are instances where you and your spouse have been married for at least ten years. Additionally, spousal maintenance may be ordered when domestic violence has been adjugated within the past two years.

Spousal maintenance can only be ordered if you or your spouse show an inability to meet your basic needs after the divorce. Suffering from a disability or caring for a child with a disability makes it easier for the court to order spousal maintenance. A court would much prefer, for example, to award a disproportionate share of your community estate to you than to award spousal maintenance. 

Asking for spousal maintenance is possible in a trial. Negotiating for post-divorce spousal support is possible, as well. This type of spousal support is known as contractual alimony. Contractual alimony allows you and your spouse to disregard the rules on maintenance and create your path. The only trouble with this is that you can enforce spousal maintenance using the Texas Family Code. For contractual alimony, you should consider your needs and the ability of your spouse to pay. 

Selling or keeping the home

The last issue that we would like to discuss today relates to your family home. The decision of whether to sell or stay in the family home is a major one. Not only is this a crucial topic financially but it is also one that has emotional components to it. No matter how you feel right now about your family, you all still made several memories in that home. As such, it may be difficult for you to make up your mind on this subject. 

Although there may be emotional components to this decision, the ability to plan your mortgage determines in large part whether you should stay in the home. All the great amenities, its location, and other factors don’t matter much when you cannot afford to pay the mortgage. Again, it was your spouse who applied with you for a mortgage (most likely). As such, the payment is geared towards a level of income you probably do not have at the moment. 

Selling a house during a divorce is not advisable. Selling a house after a divorce is not easy, either. Working with an experienced family law attorney with the Law Office of Bryan Fagan helps you make wise financial decisions. This is true of matters both big (your house) and small (your silverware). Thank you for spending time with us today on our blog. 

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

The attorneys with the Law Office of Bryan Fagan 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. Before signing a document or negotiating on a subject you do not know well, contact our office. We look forward to the opportunity of serving you during an important part of your life. The Law Office of Bryan Fagan is on your side. 

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At the Law Office of Bryan Fagan, PLLC, the firm wants to get to know your case before they commit to work with you. They offer all potential clients a no-obligation, free consultation where you can discuss your case under the client-attorney privilege. This means that everything you say will be kept private and the firm will respectfully advise you at no charge. You can learn more about Texas divorce law and get a good idea of how you want to proceed with your case.

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