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Approaching your Texas divorce from a financial perspective

Originally published by The Law Office of Bryan Fagan, PLLC Blog.

Married persons tend to earn more money than single people. There are a number of studies that will tell you this. Go search the internet for a couple and you will see what I am talking about. Whether it is building wealth, saving for your children’s college education or simply avoiding being in a situation where you become impoverished, marriage is a key factor in the financial success of many people.

Then you also have to take into consideration the fact that you are losing a big chunk of your household income when you divorce your spouse. You may have become accustomed to a certain way of living that after your divorce is no longer achievable for you. This could be especially true if you are a stay at home mother or wife who has been out of the workforce for some time and is now being forced to return to the job market.

It is common to run into financial problems as a result of divorce. In fact, I would argue that it is an exceptional case that sees a person going through a divorce not suffer some degree of financial hardship. Supporting two households when there are not two, full-time incomes can be a near impossible expectation to lay out for a struggling family. Community property (that property which is acquired during the course of your marriage other than inherited property or gifts) will be divided in your divorce. The manner in which it is divided will go a long way towards determining how positive your post-divorce financial outlook will be.

When you consider that the vast majority of children in divorce cases, from my experience, live with their mother primarily after a divorce, the financial implications of the process can have a significant impact on their lives. Although more women are in the workplace now than in any prior generation, it is usually women who earn less money compared to their spouses and have a greater need for financial assistance after the divorce.

The first year after a divorce is usually the most difficult for families

When it comes to shouldering a significant financial burden, it is my belief that the first year after the divorce is the most difficult for families. This can be especially true for women. As a wife/mother it is possible that you were not in a position to contribute financially to the marriage due to your taking on a role as homemaker and mother. While you contributed a definite economic benefit through those services, you were not in earning an income.

Therefore, you will likely have to return to the workforce after a many-year absence. Relying upon public assistance programs is probably not what you want to do but that is a reality that many newly-single moms face after going through a divorce. My point in mentioning all of this is to say that if you are a woman and are considering whether or not to file for divorce this is a worthwhile issue to plan for. Do not put yourself into a position where you have gotten a divorce but are not prepared financially to move forward once the divorce has completed.

Staying home with the children after a divorce may not be possible

If you are a stay at home mom who has fulfilled that role for your family since the birth of your child, you may find that you are not in a financial position to be able to do so after your divorce. This is difficult not only for your kids but for you as well. The way that you value yourself and the impact on your children may be derived in large part from your ability to parent that child on a regular basis. Having to return to work and leave that child with a relative or child care provider could be something that is extremely difficult for you.

The financial problems associated with childcare are many. For one, if you are have recently re-integrated back into the workforce, your income likely is not that high. As such, child care costs would eat into the majority of what you earn on a monthly basis. You need to be sure in your divorce that you either negotiate for a significant enough portion of your communicate estate or negotiate a child support total that will allow for you and your children to pay for your essentials.

What are the main financial issues for men that are associated with a divorce?

Men feel the effects of divorce as well from a financial perspective, perhaps just not as acutely as do women. The most obvious financial impact of a divorce on a husband/father is the need to pay child support/spousal maintenance. If you are not named as the parent with the right to determine the primary residence of your child then you will likely be paying child support. The amount you pay is a function of how much your income you earn and how many children you have.

Spousal support is a little trickier to discuss as far as a blanket rule to give you. Typically, if you and your spouse have not been married for at least ten years then you cannot be ordered to pay spousal maintenance upon the conclusion of your divorce. Marriages that have lasted at least for a ten year period have various percentages that apply to an income as well as a limitation on how long the spousal maintenance can be ordered to be paid.

All of these costs that you may incur as a husband/father come into play at the same time as you are needing to buy new furniture, rent an apartment or home and pay any legal expenses associated with the divorce itself. Budgeting your money is critical for men and women going through a divorce, especially if you have never created a budget and lived within your means previously.

What legal options are available to you in regard to getting a divorce in Texas?

Unless your personal safety is at risk, you do not need to file for divorce on a whim or without thinking about your options first. Like we just went over, having a plan is a good thing as you head into a divorce case. You should work with your support system and family to make a decision as to what is best for you and your children moving forward. A divorce is like anything else that you go through in life- the effort that you put into your case will be equal to the results of your case.

If you go into your divorce with an aggressive mindset, you are likely to have aggression be the response of your spouse. In some cases, this is inevitable especially if your safety is at risk or your spouse has committed some other act of violence against you or your children. In that type of situation, you can and should file for temporary orders, protective orders and anything else that is available to keep you and your family safe. If your spouse comes back at you with anger and aggression then that just comes with the territory.

How long will your divorce take?

Divorces in Texas can take anywhere from two months to two years to complete. Very few divorces wrap up in two months and even fewer divorces will take two years. Divorce can be expensive but in most cases, it does not have to be. From my experience, most people going through divorces in Texas do not have the assets or the facts that necessitate a long and drawn out divorce case. Your case may involve children and some amount of community property but the solutions to solving whatever problems you have are likely not that complex and can be arrived at via negotiation.

Is your divorce uncontested?

This is a phrase that I hear from clients all the time when they will optimistically come into my office to speak to us about divorce. He or she is sure that their divorce will be uncontested. I’m not exactly sure how you define that word, but for me, uncontested means that there are no contested issues in your divorce. This means that you and your spouse must truly agree on every issue regarding financial matters and your children. If you disagree on any subject then you do not have an uncontested divorce.

However, if you believe that your divorce is either uncontested or nearly uncontested there may not be a need to proceed with a full-scale divorce case. What I mean by this is that after your petition for divorce has been filed, an Answer received and everyone ready to negotiate, you and your spouse may choose to mediate your case immediately in order to avoid a long and drawn out divorce.

Mediation is a process whereby you and your attorney and your spouse and their attorney agree to allow a third party, independent family law attorney step into your case and work with you all to negotiate the terms of a settlement. The end result of mediation is a Mediated Settlement Agreement which will be the basis for the final orders of your divorce.

Mediation allows you to bypass the rigors of a contested divorce and cut right to the chase. Custody, visitation, child support, spousal support, and a division of the community estate you share with your spouse will all be completed in mediation. If you cannot come to an agreement on any issue, your case can proceed to either a temporary orders hearing or trial. Likewise, if you learn information in mediation that you need to inquire about further, your attorney can submit requests for discovery upon your spouse so that he or she can provide you with information that may be relevant to your divorce case.

Do you need to hire an attorney for your divorce?

For most people, hiring an attorney is essential when getting a divorce. It is not necessarily because the issues associated with a divorce are overly complex. It is because there are many issues going on in a divorce simultaneously and unless you are experienced in working with divorcing people you will not be able to devote sufficient attention to each issue if you are working alone. The benefit to having a family law attorney represent you in a divorce is not only the level of experience that you are getting but also the attorney’s skill at negotiation and multi-tasking within the divorce are crucial to your achieving a just outcome.

Otherwise, if you and your spouse have a truly uncontested divorce, no children and very little in the way of community property to divide, then it may not be necessary for you to hire an attorney to represent you in a divorce. The state of Texas has online documents that can show you how to file for divorce, draft the paperwork and file it with the judge. Of course, issues may arise along the way, mistakes can be made and money can be lost due to delays associated with your case. For these reasons, I recommend hiring an attorney even if your case appears to be clear cut.

Questions about family law and divorce in Texas? Contact the Law Office of Bryan Fagan

Thank you for spending part of your day with us today learning about family law cases in Texas. If you have any questions or would like feedback about your particular case, please do not hesitate to contact the Law Office of Bryan Fagan today. Our licensed family law attorneys offer free of charge consultations six days a week where we can answer your questions and address whatever specific issues you have.

Our attorneys practice in all of the family courts in southeast Texas and have achieved positive results for clients in each. We pride ourselves on communicating well, having strong attention to detail and putting the interests of our clients ahead of everything else. We look forward to being able to speak to you about your case and your family

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.


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Lesser-Known Financial Risks for Couples Facing Divorce

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3 Financial Mistakes to Avoid When it Comes to the Cost of Divorce

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How Financial Mismanagement Impacts a Marriage

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Financial Matters During Divorce: Things to Consider

Financial Matters During Divorce: Things to Consider

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The post Financial Matters During Divorce: Things to Consider appeared first on Divorce Magazine.


financial stability after divorce

5 Steps To Achieving Financial Stability After Divorce

financial stability after divorce


Many of us tend to focus on the emotional damage that can accompany divorce. It is important to keep in mind that divorce can have a significant financial toll as well. Women tend to fare worse than men economically after divorce, with one government study finding that a woman’s household income might fall an astounding 41 percent after divorce – almost twice as much as the reduction generally experienced by men.

There are real and significant costs associated with ending a marriage, finalizing a divorce case, and establishing separate households. Fortunately, there are steps that you can take to establish financial independence and stability after divorce. The following are some of the most important.

Steps To Achieving Financial Stability After Divorce

1. Establish Separate Accounts

Moving forward after divorce means establishing a completely separate financial life. As a result, you should close any joint bank or investment accounts that you and your ex may have together, make sure that any joint credit accounts that you and your ex had been closed or the appropriate user is removed from the account, obtain a credit card in your name only, and make a list of your individual assets and debts.

When you open your own accounts, be sure to set up a savings, money market, or investment account where you can begin building emergency funds and achieving other savings goals.

2. Set a New Budget

Once your divorce is final and the dust has settled, it is time to set a new budget, which might look substantially different from your prior budget during the marriage. In order to do so, you should first determine your post-divorce income.

If you are working, find out exactly how much you will be making every paycheck, and do not forget to include income from alimony (maintenance) or child support. Next, determine how much you need to maintain the lifestyle you would like and see if the numbers work out.

You may find yourself pleasantly surprised with your post-divorce income or realize that you may need to find another job or cut financial corners in certain areas. For example, keep in mind that as a single person, you probably do not need as much space as you did while you were married.

You may be able to significantly reduce your housing payment and utility bills by moving into a smaller apartment or house. Once you have a budget that works, try to stick to it as closely as possible. It might seem easy to pay for things outside your budget with credit cards, but the balances will add up quicker than you might imagine, and you might not have room in your budget to add in credit card payments.

3. Avoid Crisis Spending

The time immediately after your divorce is over can be an extremely difficult time emotionally. For this reason, you should avoid making big financial decisions during this period. While it may be tempting to purchase that new car you have always wanted, move to a new city, or take an expensive vacation, you should hold off on these and other large purchases until you are in a more emotionally stable place.

One of the best ways to prevent yourself from engaging in crisis spending is to limit your purchases to things that are going to meet your basic needs – your food, shelter, clothing, and transportation.

4. Build Your Credit

Divorce can wreak havoc on your credit, and it’s important to start building your own credit profile so that you can truly live independently and finance large purchases like homes or vehicles. Start with being sure to pay your bills on time every month. As soon as you feel like you are comfortable with your new financial situation, open a credit card in your name and make sure that you pay it off each month.

Avoid applying for too much credit in a short period of time, however, as this can negatively affect your score. Finally, regularly check your credit score on a free site. Make sure that all of the information in your credit report is up to date and that debts are marked closed as you pay them off.

5. Seek Help from a Financial Advisor

As a newly divorced woman, you should certainly seek help from a trusted financial advisor who understands your situation. Even if you had a financial planner during your marriage, it might be a good idea to find a new one who does not know your ex-spouse.

You should start working on your retirement plans on your own immediately, and a qualified advisor will certainly have some options for you. In the event that there were retirement accounts that were split up at the time of your divorce, you should certainly look into a Qualified Domestic Relations Order (QDRO) that can allow you to move money out of retirement accounts without any tax consequences.

An advisor can help you start a new investment portfolio with a lump-sum payment or periodic payments you received as part of the divorce order.

Finally, if you have any questions about your legal or financial obligations or rights as part of your divorce, you should speak to a family law attorney in your area.

The post 5 Steps To Achieving Financial Stability After Divorce appeared first on Divorced Moms.


What You Need to Know About Financial Settlements After Divorce

What You Need to Know About Financial Settlements After Divorce

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The post What You Need to Know About Financial Settlements After Divorce appeared first on Divorce Magazine.


financial advice for new single mothers

9 Pieces of Important Financial Advice For New Single Mothers

financial advice for new single mothers


Life is different now. You have recently been through a divorce and are now the single head of a household, which is a huge personal – and financial – responsibility. While you may still be doing many of the same things as before, you now are 100 percent responsible. There is no one to share the myriad responsibilities and decision-making.

This may be all new to you. It is also likely that you are still riding an emotional rollercoaster. Now is a good time to step back and take a deep breath. While many financial challenges lie ahead, understand that you can do this.

Financial Advice For New Single Mothers

What do single mothers have to do differently financially? To achieve financial success, newly single mothers should heed the following advice.

Just say no to credit card debt

Don’t live beyond your means and rack up high-interest credit card debt. This is one of the worst debts to have due to high-interest rates. Credit card debt should be paid off first when prioritizing bills.

Prioritize what is most important.

Take a moment (or longer) to assess your new financial life. Your family needs you to clearly understand how you can make everything work, without sacrificing too many of “the good times.” Review your lifestyle and analyze what changes and/or adaptations need to be made. Prioritize and differentiate between your needs and wants, and those of your family. Make notes. Create lists. Write things down.

Ultimately, let this “prioritization” process guide your budget. Focus on just a few practical lifestyle/financial priorities and learn to make concessions with others.

Get real with what you can afford.

Create a realistic budget. Track your spending over a specific time to see where your money goes. The goal is not to set up an austerity program that is so severe that everyone is unhappy; rather you just need to accurately understand your spending habits so you can manage and track your flow of money in an honest manner. For example, if yoga makes you happy and less stressed overall, look a reasonably-priced studio in your area or do an at-home workout.

Not spending money on yourself (within reason) can be detrimental in the long run. It is fine to put some of the focus on you. Every mom has been told that she needs to take care of herself first, so she has the energy and resources to take care of others. This applies to finances too.

Don’t try to keep up with everyone else.

Even if your lifestyle had been different previously, now is not the time to try to keep up with your neighbors and friends. As we said earlier, your life is different now. The financial decisions you make going forward will be based on a different set of circumstances.

For example, prioritize making mortgage payments and saving for (or taking) one annual family vacation, rather than putting yourself into debt to drive a more expensive car.  Even if it seems that’s what everyone else is doing, prioritizing driving the Mercedes instead of keeping up with your everyday bills will only hurt you in the long run.

Manage risk smartly.

Having only one income means it is just that much more important to protect. Obtain life and disability insurance to protect you and your family in the event the unforeseen should happen … because it can. Unfortunately, I have worked with clients who depended exclusively on one income and that person became sick and was out of work for several months.

It was both unfortunate and sad. Purchasing a cost-effective disability policy is a prudent way to safeguard against a potential loss of income.

Develop a plan B.

Planning for the future is an important component of ongoing financial awareness. Many people have asked me what is necessary for an estate plan when you have young children. At the very least set up a will. Should something happen to you, you want to have a say in who will care for your kids and where your assets will go. You do not want to be in a situation where the state determines who the guardian of your children should be – what if that is not aligned with your intent? Get it in writing.

A full estate plan is recommended (including health care proxy and power of attorney), but creating a will is a good, productive first step.

Pay yourself first.

With only one income, it may seem harder to save for retirement, especially if you envision having college educations to pay for, but it is critical to do so. Children can receive financial aid, scholarships, and loans to help pay for school, but those alternatives do not exist for retirement. Put away as much as you can into your retirement savings on a pre-tax basis and make sure to contribute at least as much as your employer matches (it’s free money!).

Don’t try to do everything on your own.

Not having a knowledgeable team of resources on your side can be the biggest disservice possible to yourself. A smart parent – especially a single parent – is aware of what they don’t know and asks for help when she needs it. This includes seeking help with your finances. Work with an advisor who places your interests first to help you make sense of the various aspects of your financial life and empower you to become educated on these topics.

Get referrals for accountants, estate planners, etc., from trusted friends or colleagues who you know have been in a similar situation to what you are facing. Building a support system will make managing finances as a single parent much less overwhelming.

Proactive Approach

Taking a realistic, proactive financial approach as a single mother is essential to your well-being and that of your family. Following the advice in this article can help you avoid unnecessary anxiety and keep your financial options open as a single parent.

The post 9 Pieces of Important Financial Advice For New Single Mothers appeared first on Divorced Moms.


financial house in order

How I Got My Financial House In Order After An Unwanted Divorce

financial house in order


Tax time. As I dropped by the post office to get the right postage for the thick packet of homework to send to my accountant, I smiled to myself, confident that I had my financial house in order. It brought back memories of all the effort it took to dig a new foundation years ago, after my divorce.

I no longer get weak-kneed and shaky thinking about those months leading to the divorce. The request for a divorce came as a surprise to me. So busy with family and career that I hadn’t been attending to the finer points of our family finances—that was something my trusted husband did.

Evidently, I wasn’t attending to the marriage either.

Rather, I was full throttle busy but confident that it wouldn’t be long before we would have an opportunity to do a reset as a couple once our last child left for college.  My husband was on another page. When the last child was launched, he would also start his new chapter. And, it didn’t include me.

The shock of divorce rattled me, and I don’t rattle easily. In fact, calm is my middle name. My career track steady and upward for the entirety of our marriage, I was now close to the top of my field, responsible for business lines that were valued at tens of millions of dollars. “On the rise” is what people would tell my husband about me at the rare work event of mine that we attended together.

I wonder now if that message didn’t send alarm bells to him—a signal that we were out of sync. After all, he had married a younger woman still in grad school with no prospects, and as he was older, his career was already launched. Perhaps neither of us took stock of what that would mean later.

Silly me, I thought we were happy and about to enter that golden time in a couple’s marriage when the burden of children is lifted, careers are set, and a second honeymoon is around the corner as empty nesters take the time to find one another again.

Some must find divorce a relief after years of strife, or abuse.

I found it confusing, embarrassing and disorienting. It took me months to feel myself again and to assure myself that the kids were ok—or as ok as they could be with their world shaken. But they had new worlds to explore, going off to college was a happy and understood rite of passage.

Divorce at middle-age is not. Although more “gray” adults are divorcing now, it still hurts me when I see a couple that is celebrating their 40 plus wedding anniversary. Surrounded by children and grand-children, toasting one another with loving looks, sometimes sharing a truth about having weathered a storm or two, but toughing it out. Good for them.

Life is hard. So, when you find someone to hang onto, it is a blessing. When you lose that person, it is difficult, regardless of the circumstances. After the initial shock wore off, and I adjusted to the fact that my husband of twenty years plus didn’t want to be married to me anymore, I wanted to get out of the marriage as quickly as possible. During that period of deep hurt, I realized how little I knew about our finances.

Pulling papers together, going through correspondence, talking to bankers, and finally, my own attorney, I was overwhelmed. I needed help. Someone to take charge of my funds—once I settled out— invest them, and work with me on managing them wisely. I also needed a CPA to help me with tax planning, short and long term.

I was startled by what I didn’t know. 

It’s not like I was a princess who had waited for her prince charming to come along and rescue her. I was a smart woman who had navigated to a high-profile career with a great future ahead of me. But I had not paid attention to the essentials of investing for my own future. Why would I? My future was intertwined with my husband’s, and he was looking out for both of us, right?

I felt powerless and knew I had to take control to conquer that fear. And, I did. But it took years, and a small village, to get me to a place that feels comfortable.

How I Got My Financial House In Order

Fortunately, through the referral from a trusted friend, I found a broker who was indispensable when it came time to receiving my settlement monies and guiding me through the decision making on where to make investments. Another friend referred me to her tax accountant who turned out to be heaven-sent. To this day, she has my back and has recently helped me through the intricacies of college savings for my grandchildren.

As I leave the post office, I realize that my comfort now is due to the fact that I educated myself, took advice from trusted friends, and brick by brick learned to build my financial house on solid ground.

My lesson was learned the hard way. Married couples are partners for financial planning and the tasks should not be delegated to one partner only.  Quarterly meetings to review your financials and make adjustments as needed, with both partners conversant and supportive of the financial plan is the best practice. Things happen, and when they do, the last thing you want is to be distracted about is your financial security.

The post How I Got My Financial House In Order After An Unwanted Divorce appeared first on Divorced Moms.


Personal, Property & Financial Information Your Divorce Attorney Will Need

Personal, Property & Financial Information Your Divorce Attorney Will Need

Once you’ve made your decision to divorce, your new attorney will need information from you in order to get the ball rolling and the divorce process started.

The post Personal, Property & Financial Information Your Divorce Attorney Will Need appeared first on Divorce Magazine.