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McKinney Divorce Law Blog

Many worry over division of marital assets, money after divorce

Women often find themselves choosing to remain in an unhappy marriage rather than face financial hardship. Those who sacrifice their careers to raise a family, often find it difficult to re-enter the workforce. As a result, these Texas  residents are understandably concerned about how the division of marital assets would impact their financial future if they choose to file for a divorce.

In spite of the fact that many people have to adjust their lifestyles after their marriage, most have no regrets. One suggestion to improve post-divorce finances is to become informed about all marital assets before a divorce. When only one partner handles the household's monetary affairs, it leaves the other spouse at a disadvantage when it comes time to split assets. Those who have not taken an active role in the financial aspect of the marriage may need to take time to become educated about the assets available and gather information regarding how to budget for separate households.

For parents facing divorce, child custody decision is priority

Parents who have decided that a divorce or separation is the best solution for a troubled relationship have many concerns. The issue that takes precedence for the majority of parents is deciding on child custody plans. While legal custody is not usually a sticking point for most families, Texas residents may struggle to settle on the most suitable physical custody arrangement.

Legal and physical child custody are both matters that parents will need to address, whether they can arrive at an agreement between themselves or with the guidance of family law attorneys.  Legal custody pertains to which parent will make the major decisions regarding important concerns like education, health care and religious instruction. Unless there is a concern over the fitness of a parent, most parents will share legal custody with both parties having a say in these important decisions. Physical custody deals with how the child will spend time with each parent.

Divorce can be costly; prenuptial agreements may be beneficial

According to the latest statistics, the divorce rate for 2017 was approximately 35%. While that is a slight reduction from previous years, the prospect of filing for a divorce is still a concern for many Texas residents. Those who have drafted a prenuptial agreement may have an advantage when it comes to divorce proceedings.

The average cost of a divorce is projected to be around $15,000; however, the cost could increase significantly based on individual circumstances. If there are children involved or if the spouses are unwilling to negotiate, the costs will likely escalate quickly. There are several elements that factor into the cost of a divorce, and some of them are fairly standard, such as filing fees and associated court costs. Others will vary, depending on the type of professional services needed and the hourly rates of the individuals involved.

A prenuptial agreement can reduce stress on business owners

In the past, the majority of couples did not consider a marital contract an essential part of wedding planning. However, those who own a business may find that a prenuptial agreement deserves careful consideration. Texas residents may find that these contracts can help provide peace of mind if a marriage subsequently ends.

A prenuptial agreement can serve several purposes in relation to a small business. The first is to establish the value of a business at the time that a marriage commences. If the spouse who holds the title of a business can establish the value at the time of marriage, then the premarital worth can be considered separate property and will not be a part of negotiations in the event of a divorce. Likewise, a prenup can dictate how both appreciation and depreciation will be factored into a divorce. It will be helpful if the contract addresses how a spouse's direct or indirect contributions to the business will be compensated in a divorce.

Former NBA legend ordered to pay exorbitant child support

No matter where one lives, one thing that can unite Texas residents with residents of other states is the love of professional sports. While many of the athletes are held up as examples of what anyone with talent and drive can achieve, the world of professional sports can take a heavy toll on family life. Many of these professionals may find themselves facing exorbitant child support orders when relationships, just like careers, come to an end.

On the court, Kevin Garnett was a basketball superstar who took his former team, the Boston Celtics, to the championship in 2008. At the top of his NBA career, he was one of the highest paid athletes in the game. Now, his career earnings are likely to dwindle quickly after a judge has ordered him to pay his former wife an estimated $100,000 a month in child and spousal support.

There are ways to reduce tax burdens in high net worth divorce

For approximately 70 years, the alimony tax deduction helped families reduce taxes after a divorce. With the tax reform act that went into effect at the beginning of 2019, the option for deducting alimony payments from taxable income for the paying spouse was eliminated. In light of this change, there are other ways Texas residents can help reduce their tax burdens after a high net worth divorce.

With the elimination of the alimony deduction, many believe that the issue of spousal support has become tax neutral, the same way that child support has always been treated. In reality, the changes actually increase the tax burdens, since the paying spouse has less disposable income to work with and will resist higher alimony payments. In the past, a spouse earning $500,000 could realize a tax savings of more than $22,000 based on an alimony payment of $150,000. Finding ways to reduce the tax burdens while ensuring that the lower-income spouse still receives support may lie in creative settlements.

Supreme Court custody case could impact parental rights

Over the past several years, there have been changes to laws that affect families and children. With the passage of marriage equality in 2015 by the Supreme Court, other changes regarding child custody have been undertaken in several states. However, there is concern that one case submitted to the Supreme Court has the potential to adversely impact parental rights in Texas and elsewhere. 

The matter is over the biological rights of a father who has lost custody of his twin children. The children were carried to term through a surrogacy contract with the man's sister who surrendered any parental rights. Though the man was in a relationship with a partner, that partner did not pursue any legal claim to the children through adoption or otherwise. When the relationship ended, the father moved with his children to another state.

High net worth divorce parties benefit from 3 practical points

The process of blending two lives in marriage requires patience and a period of adjustment. However, the process of obtaining a divorce is often much more complex, especially when it's a high net worth divorce. Texas residents who are contemplating this step may keep three practical points in mind.

The first is to retain the services of those professionals who can provide expert guidance throughout the proceedings. A team headed by an attorney skilled in the complexities of a high asset divorce is in a better position for achieving a settlement agreement that provides a secure financial future. An experienced attorney can help determine the worth of all marital property to ensure that negotiations are based on accurate values.

Man ordered to share lottery winnings in property division

Couples who realize that a marriage is no longer sustainable often seek separation before they begin divorce proceedings. Those who have initiated those proceedings may believe that property division agreements only apply to those assets that were jointly owned during the time of their co-habitation in marriage. However, depending on the circumstances and Texas laws, assets that were acquired during a separation will likely be included.

One man discovered that his luck in winning a lottery jackpot was not so lucky after all. He and his wife purportedly separated in 2011. Two years later, he decided to take a chance on playing the Mega Millions lottery game. To his delight, he was the winner of an estimated $80 million prize. After taxes and associated fees, he was left with approximately $39 million.

Study reveals wide disparity in child support across the country

The costs of raising a family varies across the country. It may seem logical that child support orders would reflect the cost of living in a particular location. However, one recent study suggests that even though Texas calculates support differently than most, it is about average when it comes to support obligations.

A company that runs an application that assists parents with child custody and support issues recently conducted a study of the varying costs of child support based on geographical location. It determined that the cost of living does not seem to play a significant role when a court is deciding what to award to a custodial parent. The study used a typical example of a mother who has custody of two children, ages 7 and 10, approximately 65% of the time, which reflects the typical shared custody arrangements. According to this study, the amount of support can be significantly higher depending on the state where one resides.

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