Is a Divorce in Your Future? The Time to Prepare your Financials is NOW!
Are you to the point of no return in your marriage? Nothing left of feelings, just apathy or indifference. Do you feel you must leave this place now or die trying? What about your financial security after the divorce? Divorce is an emotional roller-coaster. How will you take care of your debt, bills, and your children’s needs?
Time to grab your laptop or pad of paper and start thinking smart about “the first day of the rest of your life. If your “I need a divorce” decision is now made, start work on learning your current family financial situation and what needs to be done to secure your financial security for Post-Divorce life!
Here is a list of some of your most important Financial Information that you need to address before the Start of the Divorce
- What are the Community and Separate Property Laws in Texas?
Under the Texas Family Code, a spouses separate property consists of 1) the property owned or claimed by the spouse before marriage; 2) the property acquired by the spouse during marriage by gift, devise, or descent, and 3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
The terms “owned and claimed” as used in the Texas Family Code mean that where the right to the property accrued before marriage, the property would be separate. Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested. The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate. Inception of title occurs when a party first has a right of claim to the property.
Everything you and your spouse have earned in your marriage except for personal gifts or property from devise or descent will now, absent fault, be divided equally in the divorce. This could make a big difference in your post-divorce financial life! Gather all financial statements: income tax returns, insurance policies, bank statements, Investment Accounts summaries, Retirement Account balances, Bills, anything in your marriage that can show who owns separate assets or what constitutes the community property in this marriage.
2. DEBT: Deal With it NOW!
Are you and your spouse in a bad financial situation? Do you both have to work to pay the bills or just barely make ends meet? Now you want to get a divorce and HOW IS THAT GOING TO WORK? How can you be Post Divorce Happily EVER AFTER when you may not even be able to afford a down payment on an apartment?
ORDER A COPY OF YOUR CREDIT REPORT now to see where the damage may exist. You will be able to see what credit cards, loans, and other debt you all have created. If you and your spouse have be leading “separate lives” for a while, you may be surprised when there is more debt incurred for entertainment you never knew about.
Review this CREDIT REPORT carefully. Find out whether you are a joint owner or just an authorized user. Except for your home, usually the DEBT will be in existing credit card accounts, personal loans, and car loans. If possible, try to get as much debt as possible paid off before finalizing the divorce. Remember that joint debts remain both spouses’ legal obligation to the lenders, even when the divorce settlement states that only one spouse is responsible for the debt. If the responsible ex-spouse defaults on the payments, it will show up on both ex-spouse’s credit history.
Some good advice? Get your own credit card in your name only. If you keep other credit cards take your spouse’s name off the credit card Now! Get your name off any credit card that your spouse uses NOW! Divorce causes financial upheaval to a family’s budget so protect yourself, so you don’t have to pay or be legally responsible for your soon to be EX’s Bills!
3. Bank Accounts
Most married couples have at least one joint bank account. Many will have joint checking and savings accounts. You need to get a record of every family bank account in existence. Make sure you have copies of all monthly bank statement for 3 years.
Review these carefully and see if there has been a constant drainage of money from the accounts.
Now open a new account in your name. It is critical to establish your own financial identity when you divorce.
If your spouse does business with the bank in a business capacity or you have car/personal loans with the bank, you need to open a personal account with another bank of your choosing.
4. What About Our Home?
One of the hardest assets to deal with in a divorce. This is where the couple lived as a family, with or without children. If there are children involved, their little lives have centered around their schools, churches, sports teams and friends. It is heartbreaking to the entire family, but this decision is usually the final family break.
If the decision is for one spouse to take over the homestead and debt, the ideal situation is for such spouse to refinance the home in only their name. The single spouse will be responsible for the debt on the house and full title on the house. Otherwise if the spouse can’t afford to refinance the house, both spouses will have to work out a co-owner agreement and continue to have both names on the title and share the large financial burden. In such event, frequently, sale of the home is the best option.
This is one of the most serious real estate problems we encounter in a post-divorce situation. Times get tough and the ex- spouse, who took over the house debt, cannot afford to pay the mortgage and the property falls into foreclosure, affecting both ex- spouses’ credit. Sometimes it is better, if one spouse cannot refinance the house loan, to sell the house and divide the proceeds.
Other “To Do” Items to Address Before the Start of the Divorce
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- Make sure your assets are protected. Check that your car, health, and homeowner’s insurance is up to date and enough for your and your children’s needs. Also start the process of changing beneficiaries on all life insurance policies/annuities and retirement accounts (IRA / 401k at work) you own from your ex-spouse to your heirs or other designees.
- Change all passwords on your online accounts and all banking and credit card accounts. Time for some personal privacy!
- Time to start thinking about your digital assets that you as a couple developed and shared? This is a community state and how will this affect this type of asset?
- Think about reviewing your will and other estate planning documents. We suggest that when the divorce is final, you need to have a new will in place that will be only your heirs minus your Ex.
- Very important! Establish your own credit in your single name
This list will give you a start on the financial items that you must be addressed immediately in an upcoming divorce. Be prepared before the divorce and know where you stand financially. This will hopefully give you time to talk with financial and legal experts so you can make wise decisions on addressing the financial aspects of the divorce for you and your other family members.
The Nacol Law Firm P.C.
Thinking of a Texas Divorce? Prepare A Divorce Financial Checklist For Your Next Move
Preparing for a Texas Divorce: Assets
Going through a Divorce is painful no matter what the circumstances are. Before you get into the Texas Divorce Process, reduce expense, stress and conflict by making sure you are financially prepared. Planning ahead helps you in making sound decisions, start preparing for post-divorce life, and avoid many post-divorce pitfalls. Below is a list of items you need to gather before counseling with an attorney. Financial Documents are a must to show what your true assets and liabilities are in your marriage.
We have included many assets that you may or may not have. This is only a financial checklist of multiple assets for your review so you will not miss an important asset that needs to be reported.
Documents:
1. Tax Returns (at least three years) or Tax Liens and all IRS related documents
2. Wills and Trusts with all attachments reflecting corpus and trust holdings
3. Listing of all liabilities (including mortgages, credit card debt, personal loans, automobile loans, etc.):
—Name of entity, address and telephone number
—Account number
—Amount owed
—Monthly payment
—Property securing payment (if any)
—Most current statements and account status of lenders
4. A Listing of all Real Property, address and location, including (includes time-shares and vacation properties):
–Deeds of Trust
—Notes including equity loans and second liens
—Legal Descriptions
—Mortgage Companies and Loan Servicers (Name, Address, Telephone Number, Account —Number, Balance of Note, Monthly Payments)
—Current fair market value
—Appraisals
5. Motor Vehicles (including mobile homes, boats, trailers, motorcycles, recreational vehicles; exclude company owned):
—Year
—Make
—Model
—Value
—Name on title
—VIN Number
—Fair Market Value
—Name of creditor (if any), address and telephone
—Persons listed on debt
—Account number
—Balance of any loan and monthly payment
—Net Equity in vehicle
6. Cash and accounts with financial institutions (checking, savings, commercial bank accounts, credit union funds, IRA’s, CD’s, 401K’s, pension plans and any other form of retirement accounts):
—Name of institution, address and telephone number
—Amount in institution on date of marriage
—Amount in institution currently
Account Number
—Names on Account
—Company loans and documents related to benefits
7. A listing of separate property (property owned prior to marriage, family heirlooms, property gifted, inherited property):
—Records that trace your separate property. These assets will remain yours if properly documented
8. Retirement & Pension Benefits:
—Exact name of plan
—Address of plan administrator
—Employer
–Employee
—Starting date of contributions
—Amount currently in account
—Balance of any loan against plan
—Documents
9. Publicly traded stock, bonds and other securities (including securities not in a brokerage, mutual fund, or retirement account):
—Number of shares
—Type of securities
—Certificate numbers
—In possession of
—Name of exchange which listed
—Pledged as collateral?
—Date acquired
—Tax basis
—Current market value
—If stock (date option granted, number of shares and value per share)
—Stock options plans and related documents
10. Insurance and Annuities Policies and Inventory:
—Name of insurance company
—Policy Number
—Insured
—Type of insurance (whole/term/universal)
—Amount of monthly premiums
—Date of Issue
—Face amount
—Cash surrender value
—Current surrender value
—Designated beneficiary
—Other policies and amendments
11. Closely held business interests:
—Name of business
—Address
—Type of business
—% of ownership
—Number of shares owned if applicable
–Value of shares
—Balance of accounts receivables
—Cash flow reports
—Balance of liabilities
—List of company assets
—Possible hobbies or side businesses that generate income
12. Mineral Interests (include any property in which you own the mineral estate, separate and apart from the surface estate, such as oil and gas leases; also include royalty interests, working interests, and producing and non-producing oil and gas wells:
—Name of mineral interest
—Type of interest
—County of location
—Legal description
—Name of producer/operator
—Current market value
—needs leases or production documents related to the asset
13. Money owed by spouse (including any expected federal or state income tax refund but not including receivables connected with any business)
14. Household furniture, furnishings and Fixtures
—photos
—purchase receipts and documents
15. Electronics and computers including software and hard drive
16. Antiques, artwork and collectibles (including works of art, paintings, tapestry, rugs, crystal, coin or stamp collections) Other large collections need to be appraised! (Guns, quilts, action figures, books)
17. Miscellaneous sporting goods and firearms
18. Jewelry including appraisals
19. Animals and livestock
20. Farming equipment
21. Club Memberships
22. Safe deposit box items
23. Burial plots including documents of ownership
24. Items in any storage facility
25. Travel Awards Benefits (including frequent flyer miles)
Have You Been Hacked by Your Ex? Know Your Rights in Texas!
As technology continues to change our lives at a rapid pace, it’s easy to forget that so much of our most valuable and private information now hides in our computers, in our email accounts, phones, text messages iPads, and other devices. When you love someone, it may seem only natural and convenient to share your various passwords and account information or to leave your devices unprotected. However, when relationships become conflicted breakups, these security lapses can result in humiliating disasters with far-reaching consequences. As lawmakers try to keep up to help protect our information, it is more important than ever before to be aware of what is legal, what isn’t legal, and what steps you need to take in order to protect yourself from someone accessing your information for malicious purposes.
What are my online privacy rights?
Putting it bluntly, when you’re in a marriage or live-in relationship, you don’t have many. Texas did recently pass a bill (CSHB 896) to help define what a cyber-crime actually is, but it mostly doesn’t apply in this arena. Specifically, the law says a person commits an offense if they knowingly access a computer, network or system “with the intent to defraud or harm another or alter, damage, or delete property.” Although this language sounds reassuring, it is important to note that spouses are often given extraordinary leeway by courts with regards to what many would consider a reasonable invasion of privacy. In many instance, your spouse may still access anything in your computer, emails, or phone, and potentially even use that as evidence in any court proceedings. There are many examples of spouses aggressively attempting to do exactly that and successfully leveraging whatever they find to obtain custody, favorable settlements, or other advantages.
So what can I do?
If you are going through a divorce or break up,
- Immediately tell your spouse/ex that they DO NOT have permission to access any of your accounts, and document the message. You do have a right to privacy. If your spouse (Ex) continues to try to access your information, then they are potentially committing a criminal offense, and at the very least, any information they discover after written notice may not be admissible in court.
- CHANGE ALL OF YOUR PASSWORDS, and do it right away. Most of the popular online email services (Yahoo, Gmail, etc.) actually track your internet usage and display that information to anyone with your password who knows where to look. What about iCloud / Apple? If your spouse has your password, they can actually log in to iMessage from anywhere, see all of your past texts and read any texts that you receive in real time. Depending on your device settings, they may even be able to track your actual location. Change your passwords, and…
- If you can, enable two-step verification on all accounts which offer it. This extra step will guarantee that nobody can access your account without your knowledge and permission.
In short, there is still a lot of gray area as our legal system struggles to keep up with technology. The smartest thing you can do is make sure you protect your accounts, stay away from your spouse’s, and exercise caution in anything you do online or on your phone.
What Are Your Father’s Rights In Texas?
Are you the father of a child in Texas and Mom is refusing to let you see or communicate with your child? Are you paying child support in Texas for your child, yet Mom tries to dominate all interaction between you and the child to suit her needs. Is this Parental Alienation in the present or a step commencing down that path?
Fathers have rights in Texas and because this is one of the more frequent calls we receive from Dads, I thought it was time to discuss some specific law from the Texas Family Code regarding the rights and duties afforded to a Parent, whether Mom or Dad!
Under the Texas Family Code a “Parent” is defined as the mother, a man presumed to be the father, a man legally determined to be the father, a man who has been adjudicated to be the father by a court of competent jurisdiction, a man who acknowledged his paternity under applicable law or an adoptive mother or father.
Tex. Fam. Code Sec. 160, otherwise known as the Uniform Parentage Act, states that a man is presumed to be the father of a child if:
1. he is married to the mother of the child and the child is born during the marriage;
2. he is married to the mother of the child and the child is born before the 301st day after the date the marriage is terminated by death, annulment, declaration of invalidity, or divorce;
3. he married the mother of the child before the birth of the child in apparent compliance with law, even if the attempted marriage is or could be declared invalid, and the child is born during the invalid marriage or before the 301st day after the date the marriage is terminated by death, annulment, declaration of invalidity, or divorce;
4. he married the mother of the child after the birth of the child in apparent compliance with law, regardless of whether the marriage is or could be declared invalid, he voluntarily asserted his paternity of the child, and:
a)the assertion is in a record filed with the bureau of vital statistics;
b) he is voluntarily named as the child’s father; or
c) he promised in a record to support the child as his own; or
5. during the first two years of the child’s life, he continuously resided in the household in which the child resided and he represented to others that the child was his own.
If the above applies to you and you have established legal standing to support that you are “the father,” what are your rights and duties as the Texas Family Code Sec. 151.001 states:
§ 151.001. Rights and Duties of Parent
(a) A parent of a child has the following rights and duties:
(1) the right to have physical possession, to direct the moral and religious training, and to designate the residence of the child;
(2) the duty of care, control, protection, and reasonable discipline of the child;
(3) the duty to support the child, including providing the child with clothing, food, shelter, medical and dental care, and education;
(4) the duty, except when a guardian of the child’s estate has been appointed, to manage the estate of the child, including the right as an agent of the child to act in relation to the child’s estate if the child’s action is required by a state, the United States, or a foreign government;
(5) except as provided by Section 264.0111, the right to the services and earnings of the child;
(6) the right to consent to the child’s marriage, enlistment in the armed forces of the United States, medical and dental care, and psychiatric, psychological, and surgical treatment;
(7) the right to represent the child in legal action and to make other decisions of substantial legal significance concerning the child;
(8) the right to receive and give receipt for payments for the support of the child and to hold or disburse funds for the benefit of the child;
(9) the right to inherit from and through the child;
(10) the right to make decisions concerning the child’s education; and
(11) any other right or duty existing between a parent and child by virtue of law.
Both parents have these rights unless a court order has created, modified, ordered, or delegated the statuary rights of a parent. The rights you have will support and empower you in a hands on relationship with your child.
All parents have the right to have a relationship with their children! One misguided parent may attempt to employ parental alienation to hurt the other parent and cause the child to be denied a loving relationship with the other parent. Know your rights and contact an attorney who can help you and your child fulfill a meaningful relationship!
TIS THE SEASON FOR FILING A TEXAS DIVORCE ?
Welcome to January, the Divorce Month of the New Year! After a bad holiday season, many people have made the decision to file for divorce. The most popular months for filing divorce in the United States occur in January through March.
Going through a Divorce is painful no matter what the circumstances. When you decide to start the Texas Divorce Process, make sure you are financially prepared. Financial planning helps you in making sound decisions and start to prepare for your post-divorce life.
Below is a list of items you need to gather before counseling with an attorney. Financial Documents are a must to show what your true assets and liabilities are in the marriage.
Financial Documents needed when preparing for a Texas divorce:
- Tax Returns (at least three years) or Tax Liens and all IRS related documents
- Wills and Trusts with all attachments reflecting corpus and trust holdings
- Listing of all liabilities (including mortgages, credit card debt, personal loans, automobile loans, etc.):
-Name of entity, address and telephone number
-Account number
-Amount owed
-Monthly payment
-Property securing payment (if any)
-Most current statements and account status of lenders - A Listing of all Real Property, address and location, including (includes time-shares and vacation properties):
-Deeds of Trust
-Notes including equity loans and second liens
-Legal Descriptions
-Mortgage Companies and Loan Servicers (Name, Address, Telephone Number, Account Number, Balance of Note, Monthly Payments)
-Current fair market value
-Appraisals - Motor Vehicles (including mobile homes, boats, trailers, motorcycles, recreational vehicles; exclude company owned):
-Year
-Make
-Model
-Value
-Name on title
-VIN Number
-Fair Market Value
-Name of creditor (if any), address and telephone
-Persons listed on debt
-Account number
-Balance of any loan and monthly payment
-Net Equity in vehicle - Cash and accounts with financial institutions (checking, savings, commercial bank accounts, credit union funds, IRA’s, CD’s, 401K’s, pension plans and any other form of retirement accounts):
-Name of institution, address and telephone number
-Amount in institution on date of marriage
-Amount in institution currently
-Account Number
-Names on Account
-Company loans and documents related to benefits - A listing of separate property (property owned prior to marriage, family heirlooms, property gifted, inherited property):
-Records that trace your separate property. These assets will remain yours if properly documented - Retirement Benefits:
-Exact name of plan
-Address of plan administrator
-Employer
-Employee
-Starting date of contributions
-Amount currently in account
-Balance of any loan against plan
-Documents - Publicly traded stock, bonds and other securities (include securities not in a brokerage, mutual fund, or retirement account):
-Number of shares
-Type of securities
-Certificate numbers
-In possession of
-Name of exchange which listed
-Pledged as collateral?
-Date acquired
-Tax basis
-Current market value
-If stock (date option granted, number of shares and value per share)
-Stock options plans and related documents - Insurance and Annuities Policies and Inventory:
-Name of insurance company
-Policy Number
-Insured
-Type of insurance (whole/term/universal)
-Amount of monthly premiums
-Date of Issue
-Face amount
-Cash surrender value
-Current surrender value
-Designated beneficiary
-Other policies and amendments - Closely held business interests:
-Name of business
-Address
-Type of business
-% of ownership
-Number of shares owned if applicable
-Value of shares
-Balance of accounts receivables
-Cash flow reports
-Balance of liabilities
-List of company assets
-Possible hobbies or side businesses that generate income - Mineral Interests (include any property in which you own the mineral estate, separate and apart from the surface estate, such as oil and gas leases; also include royalty interests, work interests, and producing and non-producing oil and gas wells:
-Name of mineral interest
-Type of interest
-County of location
-Legal description
-Name of producer/operator
-Current market value
-needs leases or production documents related to the asset - Money owed by spouse (including any expected federal or state income tax refund but not including receivables connected with any business)
- Household furniture, furnishings and Fixtures
-photos
-purchase documents - Electronics and computers including software and hard drive
- Antiques, artwork and collectibles (including works of art, paintings, tapestry, rugs, crystal, coin or stamp collections) Other large collections need to be appraised! (Guns, quilts, action figures, books)
- Miscellaneous sporting goods and firearms
- Jewelry including appraisals
- Animals and livestock
- Farming equipment
- Club Memberships
- Safe deposit box items
- Burial plots including documents of ownership
- Items in any storage facility
- Travel Awards Benefits (including frequent flyer miles)
