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Houston Divorce Law Blog

Divorce, property division and taxes: items to consider

The financial aspects of a Texas divorce can be a source of conflict or a road map for the future, depending on how couples approach money matters. One issue that some couples may not immediately consider is the tax consequences of a divorce. According to the CEO of Wevorce, a website aimed at helping couples divorce amicably, property division has a tendency to grow in levels of complication extremely quickly.

A CPA at Wevorce notes that some of divorce's most taxable events happen after a divorce, rather than before. The first question of divorce-related taxes, of course, is what is one's filing status? One's tax filing status is what their legal status is on the final day of the previous year, December 31. So, if a couple's divorce is finalized on that day, each party's filing status will be single. Former spouses may be able to file as a couple, even if living separately, but that may or may not be financially beneficial depending on the circumstances.

What type of divorce is in the best interests of the child?

Divorce has changed in many ways over the years, with more and more attention being paid to divorce's effect on the entire family. When couples have children, they are bonded for the long-term even if the marriage must come to an end. As a result, many Texas families have opted for divorce mediation as a way to keep family bonds secure while redrawing the boundaries of romantic relationships.

One father from Austin, Texas has made public his determination to proceed with a different type of divorce for the sake of his children. The father, an attorney, was affected negatively by his own parents' divorce, which involved him being thrown into the conflict of the adults around him. Conflict in divorce, of course, is occasionally inevitable, but the Texas man asserts that it does not have to impact the children. There are steps parents can take, he mentions, to ease children through this major transition.

In high asset divorce, assets can be hidden within the family

It's very rare for a divorce in the Houston area to not involve property division in some way. In rare instances, couples who haven't been married long may have very few marital assets to divide. However, most couples are married for years, often decades, and thus have acquired plenty of shared property that must be considered if they formally end the marriage.

As many divorced Texans know, it's not always easy or simple to divide these assets. The level of complication can grow proportionately to the levels of income and assets. In a high asset divorce, in addition to figuring out how to divide assets, it's also important to know what, exactly, the assets are. Some spouses, particularly those who have a lot at stake in a divorce, may not be completely forthcoming and may even hide or misrepresent assets.

Collaborative law focuses on entire family, not just spouses

Nowadays, there are countless different types of families in Texas. At the same time, there are a growing number of options when it comes to divorce. Some of these, such as collaborative law or mediation, are attractive to divorcing couples because they keep the focus on the entire family unit rather than just the two individuals parting ways.

There are many reasons why a Houston couple might opt for a collaborative law approach to their divorce. First, collaborative law can mitigate the discord that can proliferate throughout a divorce. Some couples mistakenly believe that their divorce-related actions must be aggressive and self-interested at all times, or else they will "lose" to their former spouse. This doesn't need to be the case, though. In collaborative law, trained professionals focus on the whole family's gains and not just the interests of one spouse.

Mediation can help solve prickly divorce problems

When a Texas couple realizes that their marriage cannot continue, countless issues relating to family relationships are bound to arise. One important problem, of course, is how to break the news to the parents of each former spouse. Even more significant is properly handling the ways in which one's parents may react to one's divorce.

It's often assumed that a spouse's own parents will automatically take their side during a split. Sometimes the opposite is true, sparking a host of relationship quandaries. For example, if parents believe their child initiated the divorce or caused the split to happen, they may take the other spouse's side. Additionally, if divorcing spouses have children together, the grandparents may prioritize the grandchildren first. This often means maintaining a strong relationship with the other spouse.

Prenups: Protecting the past, present and future

Most Texas family lawyers and financial advisors would likely recommend a prenuptial agreement to anyone planning to marry. For individuals entering a union with a high net worth, a prenuptial agreement's importance grows. Some attorneys even officially recommend a prenup to their clients, keeping a copy of the suggestion in their files so that they are protected later on.

Being protected down the road is what a prenuptial agreement is all about, whether a Houston resident is getting hitched for the first time or marrying after a previous divorce. One of the first obstacles, though, is raising the topic with one's partner without offending the other person. For this reason, some engaged men and women use their financial planners' advice as a starting point. After all, it's usually easier to bring up a touchy subject at someone else's recommendation rather than at one's own insistence.

Property division debt discussions should not be delayed

There are two big "Ds" that few Houston residents ever want to navigate: divorce and debt. Frequently, these two issues must be confronted simultaneously amidst the confusion of property division. Often, it is helpful to at least attempt discussing debt with one's spouse before filing for divorce, but, sometimes, conflict makes this nearly impossible. In such cases, family lawyers and financial professionals can prove an invaluable source of information.

One of the most important aspects of divorce and debt is the original credit agreement regarding the debt. Like marital property and community property, debt can either be the responsibility of one spouse or both. If a spouse's name is on a credit card account or a mortgage, their repayment obligations can still stand, despite property division outcomes to the contrary. In other words, a divorce does not automatically alter the initial agreement between debtor and creditor. Thus, it is vitally important to take several sanity-saving steps.

A prenuptial agreement: Insurance for a partnership

For Houston couples who are about to walk down the aisle, the last thing they want to consider is walking, someday, into a divorce attorney's office. However, even the most compatible of matches can come to an end if the situation just doesn't work out. Still, when a marriage draws to a close other issues may just be beginning, which is why a prenuptial agreement makes sense even if divorce seems highly unlikely.

One of the reasons why a prenup is so valuable is because it can function like an insurance policy. Most Texans wouldn't think twice about getting insurance for their house, car, boat or even their life. Still, with marriage there is sometimes the assumption that even considering a prenup means beckoning a divorce. A prenuptial agreement is only utilized, though, when things go awry, just like an insurance policy. As a result, a prenup needn't be thought of as an invitation to part ways, but rather as a reasonable protection "just in case."

Health effects of divorce similar to those of heart attack

No Texan wants to experience a heart attack, but, unfortunately, many may actually know what it feels like. According to recently-released information from the Mayo Clinic, a divorce or serious breakup can mimic the effects and sensations of an actual heart attack.

These symptoms can include dizziness, shortness of breath and pain in the chest area. Medical professionals at the Mayo Clinic have labeled this condition "Broken Heart Syndrome," which also can occur after the loss of a loved one. Indeed, for many individuals, a divorce is the death of a marriage, made even tougher since few begin a marriage with the expectation that it will end before its time. A quick surge of stress hormones can bring about Broken Heart Syndrome, which can sometimes result in a temporary enlargement of a portion of the heart. This condition also can reduce the heart's ability to pump well.

Collaborative law helps parties deal constructively with emotion

Houston parents are used to dealing with strong emotions. After all, childrearing is one of the most emotionally intense experiences there is for any man or woman. Nonetheless, divorce often comes in at a close second, in terms of sheer emotional magnitude. While some believe traditional litigation requires parties to suppress or overlook their emotions, collaborative law urges parties to acknowledge their emotions, and move forward in a productive manner.

Anger, for instance, can thwart a divorce between parents by instilling the desire for revenge in either party. This can spill over into negotiations regarding property division, child custody or child support, among others. Sadness can also slow proceedings, if either party is dwelling on the past and not yet ready to transition into a new state. Collaborative law, an option that can allow parties to avoid court, can openly address these and other common divorce-related emotions in a respectful atmosphere.

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

She will take the time to understand your individual needs and develop a comprehensive solution to protect your rights and interests.

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