In divorce, people expect their life to change significantly. In many ways, this is true. You are going through changes in the divorce that will touch many different areas of your life. This is true, from your finances to your children. Retirement savings, student loan debt, and even your small business will all play a role in divorce. Many people wonder if the changes in their life will begin immediately when their divorce proceedings start, even though they anticipate some degree of change due to the divorce.
Many people have asked me how their lives will change during the divorce process. They wonder if they’ll have the freedom to spend money as they please. Or, if financial constraints, such as spousal support, child support, and legal fees, will limit their spending. These are important questions to consider, as divorce often brings about significant changes in a relatively short period. Have you ever created a budget before? Have you thought about the costs associated with divorce?
Today, I’d like to address several questions that may be on your mind regarding divorce. It’s important to ask these questions now rather than wait until the divorce proceedings begin. You may have even more questions and less time to address them once it begins. One topic I want to cover is the types of spending permissible during a Texas divorce. Additionally, I’ll touch on the importance of setting a budget for yourself and your family. It’s a topic often overlooked in Texas family law discussions.
Spending money during a Texas divorce
We all know that going through a divorce is difficult. There is no real way to sugarcoat or gloss over the fact that a divorce is unpleasant. Before starting a divorce, many overlook the lack of control they’ll have over it. Particularly, your spending freedom diminishes significantly.
Benefits of Responsible Spending Habits for Your Family
Most readers here likely don’t struggle with excessive spending or engaging in questionable financial behavior. While some may grapple with impulse control issues, it typically doesn’t reach a level that jeopardizes their family’s financial stability. This responsible approach benefits both you and your family in the long term.
However, Texas family courts focus on two types of individuals involved in divorce cases concerning their finances. The first person is someone who cannot control their spending. You may have this type of person in your family, or you may be this type of person yourself. If you have money in your pocket, it will be out of there and spent on something by the end of the day. When you go to a store or go online, you cannot control yourself when it comes to spending money. Your impulses rule your habits, and for whatever reason, you cannot get a grip on keeping your spending in line with your income.
Frequently you may find yourself running low on cash before the end of the month kids there. Credit cards in other types of loans will be a part of your divorce, and your ability to develop a plan to attack these problems has not shown itself yet. However, there is time for you to learn how to address these topics in a divorce sort of acts as a trial by fire when it comes to doing that.
Understanding Marital Asset Wasting in Divorce Cases
Courts also focus on individuals who spend money during a divorce to intentionally harm their spouse. This behavior, known as wasting marital assets, involves purposeful and planned actions to reduce the total assets available for division.
You may be asking yourself why a person would ever do this. After all, the money that is being spent is theirs and not solely their spouses. With this in mind, why would a person go to these lengths to harm their spouse and themselves? A divorce can lead individuals to behave in ways that are out of character. While most people wouldn’t normally engage in such spiteful behavior, the stress and emotions of divorce can sometimes lead to actions like wasting marital assets.
What is the most common type of marital asset wasting?
In my view, the most common form of marital property waste involves making purchases on credit, anticipating the debt will be divided equally during the divorce. If you’re unfamiliar with Texas’s Community property law, this strategy might seem unusual. However, a basic understanding of Texas family law can give the wrong idea about the division of property and debts, potentially leading to such actions.
Community Property Law in Texas Divorce
In Texas, community property law is based on the equitable distribution of property and debt that came into being during your marriage. The idea is that if you went into the marriage with property or debt, that property or debt would remain your or your spouse’s separate property throughout the marriage and divorce. In my experience, individuals frequently waste marital property by purchasing items on credit, hoping for an even division of debt during divorce. Often, this behavior stems from a misunderstanding of Texas family law regarding the division of property and debts.
Under this law, any income earned, property acquired, or debts incurred during the marriage fall within the community estate. Unless special circumstances apply, courts typically divide property and debts fairly evenly in a divorce. Many people, I believe, choose to squander Community property assets during the divorce proceedings. Someone may have received poor advice on financial management during their divorce. Indeed, reckless spending might go unnoticed if there is sufficient disposable income or if the attorneys involved are not vigilant. However, you should not gamble on these situations occurring in your divorce.
Wasting Marital Assets: Consequences in Texas Divorce
You should know that Texas divorce courts take the wasting of marital assets very seriously. If a court finds that you have squandered marital assets, you are likely to face a penalty from the judge. For instance, if you’re found guilty of wasting marital assets, your spouse might receive a disproportionate share of the Community property. “Disproportionate share” means your spouse could receive over 50% of your community estate regarding the property.
If you accumulate excessive debt during the divorce, or if it’s considered a waste of marital assets, you could be held accountable for it. You may also end up responsible for a larger share of the debt and have to cover your spouse’s attorney fees and other costs. While good faith efforts that result in losses such as an investment gone bad do not count as wasting a marital asset, simply overspending or purposely causing harm to joint assets almost certainly would count as the wasting of marital property.
What are some examples of wasting marital assets?
Remember that your divorce in your circumstances is unique to you and your spouse. As a result, your case may involve different types of marital property wasting that are not covered here. However, I would like to take some time and discuss with you some fairly common types of marital property wasting that can occur in a divorce case.
Spending Marital Assets on Affairs
One type of marital asset wasting that can occur in a divorce is spending money odd a girlfriend or boyfriend. This is an uncomfortable and unpleasant subject to discuss. Still, it does happen in divorce cases where infidelity not only acts as an issue within the marriage and divorce, but the spending of money and assets on that boyfriend or girlfriend acts as a second. If you suspect that your spouse is having an affair, you need to be very careful to pay attention to a bank account and investment activity to determine if any money is being spent on the relationship.
Not only could this type of paper trail make a difference when it comes to proving infidelity, but it is also essential for you to establish any degree of marital property wasting that occurs. For example, has your spouse purchased jewelry, electronics, or other expensive items for their boyfriend or girlfriend? If so, you need to keep track of any amounts that have been spent that you can determine based on your access to bank records and online statements through your bank or credit union.
Pitfalls of Impulse Spending: Buying a Vehicle During Divorce
Another way that I have seen people waste assets in a marriage is by purchasing a new vehicle during the divorce. Why a person would want to purchase a vehicle during a divorce is beyond me. Typically, I will chalk it up to not having all of your mental faculties working at full speed due to the stress and heartache associated with the divorce. Spending money can be seen as a way to call me yourself and put your mind at ease during a divorce. However, this type of spending will not only harm you in the long run but can also result in penalties during the divorce.
Although paying down debt is rarely a bad idea, it is typically frowned upon during a divorce. Many standing orders and eventually temporary orders in a divorce will bar you from using community income to pay down debt, whether it is your separate debt or community debt period; the reason is that courts want you to keep your money at your fingertips if a need to spend it on your case or the essentials of your life comes up.
Practical Advice on Debt Reduction During Divorce
Most people do not have much margin in the way above using money during a divorce to spend on debt Reduction. My advice would be to hold onto any money you can save, regardless of whether you plan to reduce debt in your life. Wait to see the outcome of the divorce proceedings and how income will be divided before making any decisions. Then you can make a lump sum payment towards your debt as soon as your divorce is over.
The bottom line is that you need to be able to prove that your spouse intentionally acted in a dishonest or underhanded manner to harm your community estate specifically. Although you may know your spouse’s heart and motivation better than anyone coming up with evidence to prove these things can be difficult. For that reason, it is very much recommended that you work with an experienced family law attorney to help you plan and build a case to prove marital asset wasting.
Working on a budget during a divorce
Initially, the idea of living on a budget and meticulously planning finances during a divorce may seem unappealing. It may feel like unnecessary homework and restrictive. However, I argue that creating a budget offers freedom rather than restrictions. It allows you to manage spending effectively during and after the divorce.
Throughout the divorce proceedings, you’re permitted to spend on essentials such as mortgage, rent, groceries, attorney fees, and items crucial for your children. Texas regulations discourage excessive spending on nonessentials or frivolous items, as we’ve already discussed. A budget aids in monitoring spending and averting potential issues. The second step is initiating a budget in the first instance.
Contrary to what many people think, creating and maintaining a budget does not have to be complicated. Simply sitting down at your kitchen table with a legal pad and a pen is a great start. Analyzing your monthly income, bills, expenses, and obligations enables you to gauge your remaining funds each month. This assessment may unveil areas where you can trim expenses, providing more flexibility to cover bills and other divorce-related costs. You may even feel like you got a raise after your first month or two of diligent budgeting.
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 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 consultation six days a week in person, over the phone, and via video. These consultations are a great way for you to learn about the world of Texas family law and also about how the law could impact you and your family given your specific circumstances. I appreciate your interest in our law office. We hope you will join us tomorrow as we continue to share unique and interesting information about the world of Texas family law.
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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 Houston, TX Divorce Lawyers right away to protect your rights.
A divorce lawyer in Spring TX is 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. The Law Office of Bryan Fagan, PLLC handles Divorce cases in Spring, Texas, Cypress, Spring, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County, and Waller County.
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Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
