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Dallas Family Law Blog

When dividing marital property, retirement funds are critical

When couples in Texas decide to divorce, the financial issues at hand often outweigh the practical and emotional concerns. This is especially true when it comes to retirement funds. For couples of at all income levels, these accounts can be some of the largest assets that are part of marital property. In fact, 62 percent of divorce lawyers who responded to a 2016 survey said that retirement funds were the most contentious issue faced by their clients.

It's important for couples to understand that retirement accounts are governed by many regulations. Errors and imprecision during the distribution process can lead to high taxes and penalties that impact both sides of the divorce. Furthermore, the funds may be inadvertently distributed in an inequitable way.

How shared parenting may benefit children

Texas parents who are in the process of getting a divorce might be wondering about the best child custody arrangement for their children. Many people might not realize that studies have shown that in most cases, children do best when their parents share custody.

One common belief is that the disruption of going from one parent's house to the other is upsetting for children. However, in interviews, children report that they prefer this disruption to spending less time with either parent. Some individuals might also be concerned about the effect of shared parenting on very young children. In particular, many people believe that infants bond with the mother and that it is harmful for babies to spend nights away from her. However, studies show that while infants do not bond with both parents in the same way, the attachments are strong with each parent, and being away from the mother overnight does not harm babies.

Methods for altering the amount of child support payments

Situations in Texas that might justify a reduction in child support include job loss, disability, emancipation of a minor or a substantial rise in income for the custodial parent. If a government agency is managing the support order, then a parent can request a change. If both parents agree to a new amount and prepare the financial paperwork, the agency could make the alteration official.

When one parent does not agree, the agency will send the matter before a judge. Legal guidelines based on parental income and the financial needs of children will guide a judge's decision on the matter. Job loss or injury might convince a judge to temporarily or perhaps permanently reduce payment obligations.

Potential system could standardize child support enforcement

When single parents raising their children in Texas don't receive their court-mandated child support payments, it can be a major source of stress and anxiety. Child support payments can be critical to covering the everyday expenses of raising children, including daycare or after-school care and extracurricular activities. Raising children can be very expensive, and when a former partner fails to pay child support, many parents struggle to deal with state bureaucracies to push for enforcement of the child support order. The federal government is currently proposing the development of a national network for child support enforcement throughout the country.

The federal Department of Health and Human Services is proposing a $63 million Child Support Enforcement Fund, taking a different tack from most reforms proposed by the Trump administration, which have generally focused on expanding state autonomy and limiting federal centralization. On the contrary, this system would develop a new network and database that would provide a centralized resource to monitor and enforce child support payments across states. This would come as a change in funding priorities, which previously had focused on supporting states to modernize their local systems.

How to choose living arrangements when a marriage ends

One pressing question that a divorcing individual in Texas needs to consider is where he or she will live once the divorce becomes final. One option may be to remain in the family home. It might also be possible to buy a new home or choose to rent a home or apartment. For many, renting is ideal as it provides a fresh start without the need to commit to an address for more than a few months.

Renting may also be ideal because an individual going through a divorce might not be in a position to make major life decisions. Furthermore, buying a home may not be feasible for those who owe child support or alimony payments. This can be especially true for those who need to buy furniture or put money into improving a home after buying it.

How divorce will affect taxes

Taxes are one of the many things that are affected when Texas couples get a divorce. If the divorce was in effect by the end of 2017, then the people involved should file their taxes separately. If they were separated but not yet legally divorced by that date, they can file jointly or separately.

Parents should agree on how they are going to handle certain issues. Usually, the custodial parent is the one who claims the dependent exemption. However, the custodial parent can waive this right and allow the noncustodial parent to claim it. This parent is also allowed to claim the American opportunity higher education credit and the child credit. The parent who pays the child's medical expenses is allowed to claim them as a deduction.

Health insurance coverage and divorce

When it comes to divorce in Texas, there can be many complications. The issue of health insurance can be particularly thorny if one spouse is covered under another's policy. While some people may assume that their health insurance will carry on to the end of the year regardless of their marital status, this is generally not the case.

People should make sure they understand both state law and the policies of the company providing the insurance. There are a few circumstances in which couples might want to delay divorce or get a legal separation instead. For example, if the spouse who will lose coverage after the divorce has major surgery coming up or an ongoing medical condition, this might be the right choice.

Contempt, stonewalling and other behaviors that lead to divorce

According to the author, researcher and marriage counselor John Gottman, there are four elements in a marriage that increase the chances of a divorce. Texas couples who engage in stonewalling, contempt, criticism and defensiveness are displaying behaviors that could lead to the end of their marriage, but they can still repair their relationship even if they have fallen into these patterns.

Of the four, contempt is the most dangerous for a marriage. One example of a person showing contempt to the other is speaking in a disparaging way. When that person protests and the other does not care, this is a sign that contempt has entered the marriage. Other examples of contempt are eye-rolling, name-calling and mocking.

How to prepare for divorce negotiations

When couples in Texas get a divorce, they might be able to avoid litigation and negotiate an agreement on property division and child custody. People may be more satisfied with the outcome of these negotiations if they prepare in advance.

The first thing a person may need to do is get a clear picture of the financial situation. With this information, a person may want to visit an attorney to talk about what might happen in regards to property division as well as child and spousal support under Texas law. The attorney might also be able to give the person a sense of the best and worst case outcomes as well. At this point, if the person feels it will not be possible to negotiate with a spouse, the case may go to litigation.

Ending a marriage may result in poor credit

The credit consequences for getting a divorce can vary for Texas residents and others. When a person only has his or her sole income as opposed to a combined marital income, it may result in reduced credit limits. This may result in higher credit card utilization ratios as well as less access to credit that may make it easier to pay for daily or other expenses.

In some cases, one person is responsible for paying a larger share of the marital debt than the other partner. This may make it harder to keep up with their own bills, which may result in late or missed payments. Those who are required to pay joint debts after a divorce are urged to create a budget as quickly as possible. Furthermore, it may be a good idea to close joint accounts after a divorce so that neither party can accrue new debt.

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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Turner, Bruce E.
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Bruce Turner with Bennett, Weston LaJone & Turner, P.C.

Attorney Bruce Turner is located in Dallas and represents people and businesses throughout DFW and the Metroplex, including Denton, Carrollton, Lewisville, Flower Mound, Farmers Branch, Irving, Las Colinas, Corinth, Highland Village, The Colony, Plano, Frisco, Allen, McKinney, Mesquite, Grand Prairie, Garland and Grapevine as well as Collin County, Denton County and Dallas County in Texas.

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