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El Paso Law Blog

Unexpected financial issues for divorcing women

Women in Texas who are considering getting a divorce should be aware of how the process can impact them financially. Out of 1,785 divorced women who participated in a recently released survey, 46 percent stated that their divorce had resulted in unexpected and undesired financial issues.

The women who participated in the study included women who were about to file for divorce, in the middle of the divorce process and already completely divorced. Roughly 22 percent of the women were at least 55 years of age, and most of this group was already divorced.

Important ways to prepare when pursuing a divorce

When a Texas couple decides to end their marriage, they could enter a time-consuming legal process. A divorce involves three stages: It begins with filing paperwork, moves on to discovery that primarily requires a disclosure of financial records and then concludes with disposition. Disposition might result from the parties negotiating the terms of their split through mediation or collaborative divorce, but it could require a court trial, where a judge makes final decisions. Organization, goal setting and a realistic evaluation of finances and the needs of children will benefit people entering this process.

The organization process involves gathering financial records about bank accounts, retirement plans and debts. At some point, joint bank accounts and credit cards will need to be closed, and both parties should get copies of their credit reports. People can choose new personal or financial goals for their lives during this time as well. An honest look at what post-divorce income will look like will help an ex-spouse determine how to move forward and hopefully avoid financial difficulties as a single earner.

Why now may be the time to finalize a divorce

Upcoming changes to the tax treatment of spousal support may provide motivation for Texas residents to end their nuptials before the start of 2019. This is because alimony will no longer be considered income to the person receiving it and a tax deduction to the person providing it. While not having to pay taxes on alimony may seem like a positive, it could actually limit the amount of support offered.

Furthermore, since spousal support will no longer be considered income, funds received cannot be used to contribute to an IRA or 401(k). It is also important to remember that the personal exemption has been eliminated until at least 2025. This means that a parent can no longer claim additional exemptions based on how many kids they have. However, claiming the children may be beneficial as it might entitle a person to other tax credits.

Many factors determine the length of a divorce case

Texas residents who choose to get divorced could do so on their own or end their marriage through litigation. In many cases, getting a divorce without going to court is faster than asking a judge to make a ruling. However, this is generally only a good idea for those who don't have children or many assets to divide. For individuals who need to get a judge to make a final ruling in a divorce, it could be months before a court date is set.

It is important to recognize that there are options, such as mediation or arbitration, that a divorcing couple can try before seeing a judge. Mediation involves a neutral third party who will work to ensure that both sides can communicate freely and openly. It may take several sessions before a divorce settlement is agreed upon. Arbitration is similar to litigation as the arbiter will make a ruling after hearing evidence.

Bringing visitation into the new technological age

Most parents wish to be as much a part of their children's lives as possible. This includes witnessing important milestones as well as everyday routine contact. By actively participating in your child's daily life, you are taking the initiative toward ensuring that your child's best interests are always given priority.

In many instances, one's parental role and responsibilities may change because of a divorce or a breakup of the relationship with the other parent. After the end of the parental relationship, the two parties must then work out who will care for the children, how they will be cared for and also determine how much time each parent will spend with the children. Luckily, if you are facing such circumstances, the expansion of technology is now available to increase your opportunity to see your child.

The financial impact of divorce on retirement

Texas residents who are considering divorce or going through the process are concerned with the many changes it might bring. One of these concerns is often how it will financially affect them during retirement. In most cases, the impact is negative. The only exception seems to be single women, whether they had always been unmarried or were divorced.

According to a Center for Retirement Research study, households that have not gone through a divorce are about 30 percent wealthier than those comparable households that have. In fact, a divorce puts people at a 5 percent higher risk of running out of financial assets during retirement.

The link between child support and voluntary impoverishment

A parent awarded custody of their minor children or alimony in El Paso may find it difficult to obtain the support they are owed if voluntary impoverishment is a factor. The Office of Child Support takes the practice seriously and goes through cases to identify the accuracy of earnings to address the voluntary impoverishment practice.

Voluntary impoverishment is when a person underreports their earnings to the appropriate authorities to skew the child support formula in their favor. Working under the table is a common approach to manipulating the system to reduce child support obligations. The child support formula only factors in the earnings reported, so an individual may manipulate the system to avoid having to paying higher monthly amounts to custodial parents.

Tips for making divorce less painful

Divorce is notorious for being difficult. Every decision made during this legal process can have long-term consequences on the lives of both ex-spouses and any children involved. While some points may have full agreement from all parties, contested issues can cause a lot of stress and anger. In order to make the process easier for everyone, divorcees should consider following a few tips.

One of the most important tips for divorce proceedings is to make sure spouses prioritize the things they really want the most. For example, a father who wants a fair amount of custody of his children the most should not focus the majority of his energy on reducing his alimony payments. It's also crucial to understand what the other party wants in order to argue and negotiate from the best possible position.

Checking the facts about child support

Child support payments can be critical for single parents and their families in El Paso struggling to pay the bills. These payments may be a major contribution to the significant expenses that come with raising children, including education, healthcare and other expenses. While many people expect that support payments are large and generous, the reality is often quite different for many single parents. The U.S. Census Bureau tracks facts about child support in the United States, including the amounts owed and paid and the number of people in the country with child support orders.

In a January 2016 report, the Census Bureau provided comprehensive statistics about child support across the country. The report noted that there are 13.4 million custodial single parents in the country. While many people think of child support as a fact of life for people in this category, in over half of all cases, it is not. Only 48.7 percent have a child support agreement in place whether obtained through the courts or arranged privately between the parents. The vast majority of agreements are handled legally, either through family court or a state agency.

Understanding some common intricacies involved in child custody

If you are a parent seeking a divorce, or if you have children outside of a marriage and will not be staying with your partner, you are likely wondering how you and your co-parent will be sharing the responsibility of raising the children. Perhaps you are your partner are thinking about making your own arrangement for child custody. In other cases, you may not have this luxury, and thus will be in need of a greater level of outside help.

If you and your partner can't agree or would prefer an outside opinion, there are resources readily available to you. Ultimately, a court will look at your situation and either bless the arrangements that you and your partner have agreed to or it will attempt to fully determine the arrangements that are in the children's best interests.

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El Paso, TX 79935

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