You are getting divorced! After the emotional decision is made you must address financial situations impacting the family breakup.
What are the major financial pitfalls of a divorce? Are you prepared to stay on top of all financial problems and decisions in this divorce to strive for a financial win-win situation?
Where’s the liquid cash? Divorce generally never goes as fast as you would like nor do you receive as much as you think you should! If divorce is imminent start saving up money now! You will need to pay divorce expenses and have support for your new household. There will be many unanticipated costs that may drain you financially.
- If you don’t have a credit card in your name get one now. If you share credit with your spouse, close out as many credit cards as possible if he/she can charge on your credit. Even if you don’t use the cards, the account balance will still be owed and both spouses may be legally responsible for the debt.
Not Prepared for this Divorce? Divorce is a serious change of life event. Get Prepared Now! Timing is all important! When is the best time for you to get divorce? Make sure your financial situation is good before you take the divorce leap. Need new tires, buy them. Kids need dental work, see the dentist. Just remember: after the separation, your expenses will be paid by court order and not always be to your liking.
Where are the important divorce financial records? Don’t leave without all your documents that identify what you and your spouse accumulated during your marriage and which can establish the fair market value! Even if you were not in charge of finances while you were married, you must secure copies of all records. You are entitled to your share of financial property and any additional income you find may increase the earnings that calculate child support or spousal maintenance support. What are you looking for? At least three years of tax returns, mortgage paper on your home, wills, trusts, bank, credit card, and financial statements, car registrations and titles, insurance policies, and deeds to real estate. If you have separate property from inheritance or gifts from your family, make sure you have all records of these transactions. Our blog, Texas Financial Checklist http://dld.bz/dqcej is a detailed list of items and records needed to have before filing for divorce. A very good item to use for your preparation!
Have you overlooked any Divorce Assets? If a business is involved a forensic accountant may be hired to look of any signs of additional income or overstated expenses.
- Hobbies and side businesses that use expensive equipment or generate income needs to carefully be looked out. Are you entitled to compensation for expenses you paid to get your spouse through school?
- All assets, big or small can add up. These assets can always be used for trade on something you can use.
- Your spouse may try to hide assets. By keeping all documents and paystubs to make sure there are not any irregularities, things usually work out fine. Stay honest and reveal your assets.
Do Not Ignore Tax Consequences! Divorce may or may not create taxable events but you must report it on your tax return. Should you sell the house now to claim the capital gain exclusion? Who should be paying the mortgage until it sells? Should you take your spousal maintenance monthly or in a lump sum? What about retirement funds? An accountant can help to determine the best path for you on these questions.
Passive Observer of your Divorce? NO! Get control of this process, focus on practical things and work with your future Ex to get this divorce over! You can do this! There is a reason for this divorce and you are the master/mistress of your destiny. Your children need you now to be a responsible parent and wise decision making will save you time and legal fees. Listen to your attorney but you make the decisions!
Is Divorce your survival plan? Now that you have decided to divorce you must break it to your children. People engaged in a Divorce should be in survival mode. The person who will be your future “EX” is looking out for themselves and you need to look out for yourself and your children. YOU must insist within reason on getting what you need and deserve! Emotions and money do not mix! You must be able to take care of yourself and your family financially so look at all property division decisions very carefully and make good decisions to bring the divorce to a successful conclusion.
Prepare for the worst! When entering into a divorce, prepare yourself for the worst! If you are prepared for anything, than your fears will not cause you to panic and you will keep control of your situation. Outside of death, divorce is considered one of the worst emotional situations that a human being will ever experience!
How will you support yourself and the kids after divorce? Hopefully this is not a problem, but now would be a good time to get some career counseling at a community college, university or local job center. Having a fulfilling career is lucrative and helps your self-esteem!
Get Good Advice! Decisions you make now will affect the rest of your life. Find a good, knowledgeable attorney to help you though the rough spots. If you are emotionally a wreck, find a good therapist. If you feel there are hidden assets, hire a forensic accountant. Now is the time to get the best advice you can afford! You will have to live with your financial decisions for a long time.
Courts, legislatures and juries are becoming more aware of the necessity of father’s being involved in the lives of their children. Children with positive father involvement have fewer behavior problems, higher levels of sociability, and perform better in school.
Recent research suggests that father involvement during pregnancy affects multiple areas of child and family well- being, from prenatal care initiation and mother and child health outcomes, to the likelihood that the father will provide ongoing financial and emotional support. This body of research is gaining momentum. Local and regional governmental agencies are focusing more and more on parental father involvement in the lives of children.
As a result of the changes taking place in society today, the Courts are now recognizing a father’s ability to care for his children as becoming equal to that of the mother. Starting out on an equal plane, the Court may look to which parent is more stable, has a superior income, has a parenting plan in place for the child and is capable of providing proper child care and spending more quality time with the child.
If a father ignorantly gives up rights to his children based on prejudices of the past in the Court system he can feed a mother’s confidence and sponsor unnecessary ongoing litigation. The number one mistake made by father’s in the court system today is a failure to take the time to learn how the system works. Failing to learn how the family law system works may doom your case. Once you have learned the ins and outs of the family law system you will need to form a plan, set goals and never relent in enforcing your rights as a father.
Five of the biggest mistakes men make in a legal action are: 1) failing to respond to the legal action itself; 2) obtaining incorrect legal advice (from friends and family rather than a legal expert); 3) signing a settlement agreement they are not in agreement with and later deeply regretting it; 4) failing to perform under the actual settlement agreement signed; and 5) getting frustrated and/or acquiescing to unreasonable orders.
Some of the things you may want to consider as you prepare for the custody battle are as follows:
- Who has the financial ability to best care for the child(ren)? Be sure to have income tax verification, W-2 Forms and other financial information available.
- Form a parenting plan (child care, after school care, transportation, pediatrician, etc.).
- Who is more stable and/or can provide the best home for the child(ren)?
- Where has the child(ren) been attending school? Is it possible to keep the child in the same school district?
- Prepare a chronology of events leading up to the divorce including treatment of the child(ren), time spent with the child(ren), activities with the child(ren), the child(ren)’s schedule.
- Consider if a home study should be prepared regarding each home of the child.
- Consider whether a psychological evaluation should be done on the mother?
- Is drug testing necessary? (Be sure to request hair follicle drug testing.)
- Is there an alcohol or other addiction problem in the home?
- Who can provide the best moral upbringing for the children?
- Is there evidence such as pictures, video tapes, etc. that may help your case?
- Avoid unnecessary compromising photos or data on Facebook or other social networking sites.
List any other relevant issues you feel may be important to your case before you meet with an attorney.
The most important thing to remember is that your failure, if based on dated concepts and inapplicable worn out prejudices, will be her victory and your parental failure.
Texas family law states that a court may modify a child custody order if the change is in the best interest of the child and one of the following applies:
1. The circumstances of the child or parent have materially or substantially changed since the date of the original child custody order or order to be modified.
2. The child is at least 12 years of age and will tell the court in private chambers with the judge that he/she would like a change.
3. The custodial parent has voluntarily given the child’s care and custody to another person for at least 6 months.
Material or Substantial Change
What could be acceptable as a change for the Texas family courts? Some examples could be a parent’s remarriage, a medical condition the affects a parent’s ability take care of the child, a parent’s criminal acts or convictions, a parent’s change in residence that makes visitation a hardship for the other parent, family violence, drug or alcohol related issues, absence of supervision, and other material changes concerning adequate care and supervision of the child.
Child Wants Change
The child must be at least 12years of age and maybe interviewed in the judge’s chambers. The court will consider the child’s desire but only make a change if it is in the child’s best interest.
This happens when the custodial parent has voluntarily given up custody of the child to another person for at least six months. This does not apply to a period of military deployment or duty.
After finding one of the three prerequisites, the court must still consider whether the change will be in the child’s best interest. The court will consider factors affecting the child’s physical, emotional, mental, education, social, moral or disciplinary welfare and development. The factors considered for this evaluation are:
1. Child’s emotional and physical needs.
2. Parenting ability of the conservators or potential conservators
3. Plans and outside resources available to persons seeking the modification
4. Value to the child of having a relationship with both parents
5. Visitation schedule that requires excessive traveling or prevents the child from engaging in school or social activities
6. Stability of the person’s home seeking the modification
7. The child’s desires
8. Child’s need for stability and need to limit additional litigation in child custody cases.
Modification within one year of prior court order
A parent who files a motion to modify a child custody order within one year after a prior order was entered must also submit an affidavit to the court. The affidavit must contain, along with supporting facts, at least one of the following allegations:
1. The child’s present environment may be endanger the child’s physical health or significantly impair the child’s emotional development.
2. The person who has the exclusive right to designate the child’s primacy residence is the person seeking or consenting to the modification and the modification is in the child’s best interest.
3. The person who has the exclusive right to designate the child’s primary residence has voluntarily relinquished the primacy care and possession of the child for at least six months and the modification is in the child’
Many professions create impositions on conservators making a standard possession order inapplicable and unworkable. The Court may deviate from a standard possession order if the order is inappropriate or unworkable in reference to the schedules of both the conservators and the child. Unique professions and irregular school schedules for children allow the Court to have flexibility to deviate from a standard possession order that is in the Best Interest of the Child. There are multiple ways in which the Court may depart from a standard possession order to fulfill the needs of all parties involved with the custody of the child.
First, the Family Code § 153.254 states that the Court will be allowed deference to modify the standard possession order if work schedules of either conservators or the school schedule of the child is irregular. The Court must attempt to narrowly tailor the modifications to keep the new possession order as similar to the standard possession order as possible. This instance most commonly occurs when the Managing Conservator and the Possessory Conservator cannot reach an agreement and one of the two Conservators has a unique profession such as a firefighter, police officer, or airline pilot. The working hours of these jobs allow the Court to modify the standard possession order even if both of the parties do not comply with the changes. The modifications must be made only if it is in the Best Interest of the Child.
Secondly, the standard possession order may always be modified if it is by the mutual agreement of both the Managing Conservator and Possessory Conservator. Family Code § 153.007 is the Agreed Parenting Plan Statute and allows for both parties to agree on a standard possession order for the child. This statute was passed to promote amicability in settlement for child custody issues and to give flexibility to the parents if they are willing to agree on custody terms. The Agreed Parenting Plan must be in the Best Interest of the Child for the Court to approve. If the Court grants the Agreed Parenting Plan then the Managing or Possessory Conservator will have a remedy as a matter of law for any violation of the agreement committed by either party.
Finally, both Conservators may enter into a Mediated Settlement Agreement under Family Code § 153.0071. A Mediated Settlement Agreement is the only time in which the Court will NOT look at the Best Interest of the Child when granting the custody agreement.
The Mediated Settlement Agreement § 153.0071 must be:
- In bold, underlined, and capital letters that the agreement is NOT REVOCABLE
- Signed by Both Parties to the agreement
- Signed by the lawyers (if represented) of each party
The Mediated Settlement Agreement is binding and not revocable so if the Conservators wish to go this route they must understand that what is in the agreement will be held as binding. This method can be used to modify or change a standard possession order and the Court will not look at the Best Interest of the Child regarding the agreement, unless there exists a credible threat of domestic violence.
These are the methods in which a unique possession order may be obtained to accommodate irregular schedules or working hours of both the conservators. Any possession order must be correctly drafted and all future contingencies must be accounted for. An experienced lawyer must be contacted to safeguard an individual’s custody rights of their children and to make sure that a fair custody arrangement is obtained.
In today’s unpredictable economy there has been a continuing growth of small businesses and a substantial decrease of existing established businesses in Texas. In the regrettable instance of “Divorce” how may the “Family Business” be divided between a dissolving couple to reach a fair and reasonable result for both parties?
In such a situation, an experienced Family Law Attorney with the aid of economic experts becomes critical in establishing a fair and equitable price on the business, consulting the client on their rights relative to the business, helping with negotiations for a business entity to be sold, transferred, or appraised, and making sure the client’s rights are protected in the transaction.
The most important fact to establish is a credible determination of the true fair market value of a business and how the business or the business assets are to be divided between the spouses in the divorce.
The dividable interest is determined by the fair market value of the business. This value is the price a willing buyer would pay and a willing seller would give in a purchase with both buyer and seller having reasonable knowledge of the relevant facts of the business and neither being under pressure to buy or sell the business.
During a Divorce, the concept of a credible hypothetical buyer and seller may be determative and very complicated. Going through a divorce is difficult enough, but fairly determining the true value of the business in the process can be complicated and sometimes expensive. There are always two different ideas in every divorce and the family business will bring out the some very serious opinions of just what is the “fair market value”! Ideas may range from too high in today’s economy to too low base on emotional attachments, complicated further by feelings as to possible other family members who own or claim parts of the business. The value placed on proposed purchases that are not part of an arm’s length transaction may not be relevant to the correct fair market value.
To help determine the fair market value and complete the transaction fairly for both parties the family law attorney must be able to obtain and review all business and financial records, financial statements and tax returns, and any other pertinent information for the preceding 5-7 years. Often an independent business appraiser or CPA will be retained to help in determining a credible and correct valuation of the business that a Judge or Jury will respect.