By Patricia Barrett, CFP CDFA Mediator

 

   Those considering divorce are usually consumed by tremendous emotional upheaval.  Do not rush into a divorce, but rather consider consequences and make decisions objectively.  Be sure you understand how to file for a  divorce before you begin the process!
 

 

   Remember, fighting will only prolong the emotional turmoil, causing additional expense and discomfort.
 

Grounds for Divorce:

   Texas is a no-fault state, thus most cases use the grounds of “insupportability”, meaning the marriage has become insupportable because of conflicting personalities.  There are six other grounds for divorce, however, insupportability will undoubtedly be the grounds in your divorce, no matter what the real reason.  However, it is possible that misbehavior on the part of one spouse can produce a larger percentage of assets for the other.
 

Residence Requirement in State:

   You or your spouse must have lived in Texas for at least six months and a resident of the county where you file for divorce for at least 90 days.  If your spouse moves out of Texas, there are “long-arm jurisdiction” rules that still allow the divorce in this state.
 

Being Prepared for the Financial Aspects:

    Review your financial situation prior to any action.  Careful analysis is in order so that you will go through the divorce with eyes wide open as to the monetary consequences involved with dividing assets.  The individual earnings ability of each spouse comes into play in this analysis, to be sure one spouse doesn’t suffer financial ruin.  A Certified Financial Planner trained in issues of divorce could provide this service. 

   Some parties even work with the CDFA (Certified Divorce Financial Analyst) in advance of hiring attorneys in order to work through financial issues before involving the legal experts or using them as consultants until needed for the creation of legal documents.  Obviously, this requires a high level of cooperation between the parties.  If the CDFA is also trained in mediation, it may be possible to reach a compromise through that process.
 

Early Intervention Mediation:

   Possibly, the most efficient method for dealing with substantial assets, assuming that the couple is fairly amicable, is to employ the CDFA to work with them and help them reach a settlement.  The couple gathers many of the same documents that an attorney requires, while the CDFA helps them with their individual budgets. 

   After the initial meeting, they can work by email to exchange first drafts and discuss issues.  It defuses the situation to have a neutral financial planner crunching the numbers.  It’s often possible to come to an agreement in this manner. 

   If they don’t agree through this method, a meeting with the parties, an attorney mediator and the CDFA is arranged to work it out little by little in mediation.  It usually takes from 4 to 8 hours. 

   Once both parties agree to an asset division, one of them hires an attorney (or both, if they wish), who will draw up the divorce agreement.  The other party may want an attorney to review the decree on their behalf. 

    If there are children, it may be best to have a mental health professional help them with their “parenting plan”, as recommended by state statute.
 

   Note that this method avoids the tug-of-war of two attorneys.

 

Legal Assistance:

   Choose your attorney carefully.  Ideally, you can obtain a referral from an acquaintance that had a satisfactory experience with one.  Otherwise, shop to find one that “feels” right to you.  Ask questions, look things over, and be very particular about the person you hire to take on such a significant role in your life.
 

   Unless your divorce is of the simplest variety (no children or assets), be sure the attorney you choose is a Family Law specialist.  You can even attend divorce proceedings to see an attorney in action.
 

   However, it is possible to use the services of an attorney as an adviser rather than allowing him to totally control your divorce.
 

Collaborative Divorce:

   Texas enacted a new approach to divorce in Texas in 2001 allowing parties and their attorneys to enter into agreements under the collaborative law approach.  This can avoid lengthy litigation costs and antagonistic encounters.  The parties and their attorneys agree to resolve conflicts through a series of settlement conferences.  The attorneys may not serve as litigation counsel except to ask the court to approve the settlement agreement. 

   Both parties are required to complete a sworn inventory under oath.  If one fails to disclose any asset, the other spouse can receive 100% of the undisclosed property.  They can opt out of the collaborative law process at any time prior to signing the settlement agreement. 

   Neutral third parties, such as certified divorce financial analysts or certified public accountants often contribute to the process with their expertise in the area of financial matters.   Mediators may still be necessary when the parties cannot agree on a settlement. 

   Collaborative divorce works to end the marriage in an orderly fashion by focusing on the future and not faults of the past. 

   However, if the Collaborative process fails to guide the parties to settlement, they must fire their attorneys and financial planner and choose new attorneys.
 

Petition for divorce:

Whether in Collaborative law or litigation, the attorney will prepare the Petition for Divorce after interviewing you and receiving all pertinent data.  The petition must be filed with the District Clerk’s Office.  The clerk will assign a Cause number and Court number at this time.
 

There are three basic paths to get a divorce in Texas:

   1. By agreement - (always written of course)
   This is by far the most favorable way to accomplish a divorce, since it will save a tremendous amount of money, as well as create a friendlier ongoing relationship between the ex-spouses.  This is especially important if children are involved.
   There is much less paperwork involved in an agreed divorce and far less involvement with the attorneys.  Additionally, the mutually-constructed divorce agreement will most probably be approved by the judge at your hearing, so long as no blatant inequity is present.

   2. By default - This is when the spouse doesn’t respond to the petition served to him.

   3. By contest – The last resort: when you end up in a court battle.  This is, by far, the most expensive method, in time, money and emotional upheaval. Even if you can wangle a few extra dollars through the court battle, attorney’s fees will probably eat into it tremendously.  Additionally, the emotional strain on you and your children is more important.

 

Litigation:

When you file for divorce, you are automatically enrolled in the litigation model of divorce.  Depending on your attorney and your case, your attorneys will do some or all of the following: (Per Texas Rules of Civil Procedures):

1. Prepare for and attend hearings as necessary for Protective Orders,
2. Create and file Restraining Orders
3. Create and File Temporary Orders on child-related issues, use of house and car, spousal support, payment of bills.
4. Prepare and complete “discovery” (exchange of information)
5. Prepare Request for Documents,
6. Prepare Written Interrogatories,
7. File Depositions with the court,
8. Subpoena records,
9. Send Request for Disclosure to opposing attorney,
10. Send Requests for Admission,
11. File Sanctions with the court.
12. Exchange and file inventories with court.
13. Negotiate issues and come to agreement or Go to mediation.

   If no agreement is reached, the trial normally occurs 9-12 months after filing, with much more work required by the attorneys.

 

Marital Settlement Agreement or Agreement Incident to Divorce (AID):

   Property can be divided through the Marital Settlement Agreement prior to filing the petition, eliminating the necessity to list all marital assets in the Petition.  If this is not accomplished, then the Settlement should be achieved before the Hearing in order to prevent the court from making these decisions. 

 

Remarriage:

   You are not free to marry anyone else for 30 days after the judge orders your divorce.

 

Change of name:

   If requested by either spouse, the judge will change the name of either spouse to any name they used before. 

 

Dividing the Property and Debts:

   One of the services an attorney offers is to review your assets to see what you own, your debts and how it can be divided. However, attorneys do not have special training in financial issues.   A Certified Financial Planner specializing in divorce is better equipped to estimate real values and an equitable long-range solution to division of assets.  Presented with the tables created by the planner, the attorney will readily be able to survey the marital holdings. 

   The proposed division of property is outlined in the decree.  The attorneys, financial planners and spouses work toward an agreement before the date of the hearing.  If this agreement isn’t reached, the judge will divide the property, largely influenced by the agreement presented to the court. 

   The division of property is rarely 50/50, since the earnings ability of each individual must be considered, as well as any separate property available.   Additionally, one individual may be in poor health and require additional assets to maintain a decent standard of living.
 

Corporate Pensions:

   The community interest in a spouse’s pension plan depends on a calculation based on the numbers of years worked prior to and during marriage.  Finding the value of the pension may require the participant contact the company’s human resources department to find out the current lump sum value at normal retirement age.  The non-participant spouse has a right to this information since he or she is the beneficiary of the plan.  Your financial planner can calculate the true value in today’s dollars.
 

QDRO (Qualified Domestic Relations Order):

   The QDRO is a legal order issued by a court that assigns a portion of a 401k or pension plan to a spouse during a divorce.  The QDRO is part of the divorce decree or court-approved settlement.   Your attorney or divorce financial analyst can advise you regarding present value to assure you receive a fair settlement.  (Click here for a more complete description of a QDRO.)
 

   Frequently, the spouse with the pension will concede other assets in order to keep the pension undivided. Or they may offer a promissory note known as a property settlement note.  All of this should be part of the written marital settlement.   Again, the services of the financial planner can be invaluable in calculating the fairness of a proposal.
 

Family Home:

   The home may be sold and the proceeds divided, however, frequently one spouse prefers to maintain the home.  In this case, other assets are given to one spouse to offset the equity in the home.  Warning:  This can impoverish the spouse who maintains the home, since income-producing assets could be largely left in the hands of the other spouse.  The financial planner will estimate future effects of any division of assets. 

   If there are minor children involved, normally the custodial parent wishes to maintain the home for the benefit of the children and their continued stability.  This is favored by Texas courts if found to be financially feasible.
 

Child Custody:

   Texas law calls the parent with custody the “managing conservator” and the other parent the “possessory conservator”.  What we normally think of as visitation is called “possession”. 

   The preferred method of child custody in Texas is “joint managing conservatorship” or JMC.  This means both parents share custody, even though children live most of the time with one parent or the other.  There are specific guidelines in Texas law outlining times, holiday arrangements, etc.  While a couple may agree on other arrangements in their written petition, the Texas law provides a valuable guide and can prevent arguments. 

   The other method of custody is “sole managing/possessory conservatorship”, where one parent is awarded primary custody and the other is granted limited visitation.  This is usually granted only if it isn’t in the best interest of the child to be in the company of the other parent very often (like with substance abuse or violence). 

   Texas law favors a mother as primary caretaker for young children, even though this may seem sexist these days.  Only if she is somehow deemed unfit or does not want custody, is the father granted primary custody. 

   Children twelve years and older can generally voice a preference as to the parent they wish to have custody, although a judge will have input in this as well. 

   All orders about custody, visitation and support of children are subject to modification.  If situations change, either spouse can return to court after one year to seek a change in orders. 

    It is very important to make your coparenting as peaceful and pleasant as possible.  It has been found that children are very resilient following a divorce if the couple doesn’t engage in negative behaviors toward each other. 

   There are classes that give divorcing parents guidance in providing a smooth transition for children.  These classes are actually mandatory in some counties.

Child Support:

   Texas has child support guidelines used by courts and, while not mandatory, are considered fair.  Courts will, however, consider reasonable variations if agreed to by both parties.
   The guidelines provide for a percentage of “monthly net resources” to be paid in child support, with a greater percentage for additional children.  The monthly net resources include all sources of income after taxes calculated for a single individual with one exemption. The percentages of monthly net resources based on number of children are:

 

 

 

   The father is also required to cover the cost of health insurance for the child or children. 

   These percentages apply to the first $7,500 of net resources.  The court can order additional support should available income exceed this. 

   The court will want to see worksheets outlining income and expenses for both spouses. 

   The court issues an “order for income withholding” in every child support case.  The State of Texas has a Child Support Disbursement Unit through which payments are collected and disbursed.  This gives an unbiased record of payments. Nonpayment can result in wage garnishment or even arrest.
 

Spousal Maintenance or Alimony:

   Texas passed a law granting spousal support (also called maintenance) in 1995, although the guidelines are limited, allowing no more than $2500 per month or 20% of the wage-earner’s monthly gross income for a maximum of three years.   These guidelines apply if you were married at least ten years and will not have sufficient property after the divorce for minimal living needs. 

   You are also eligible for maintenance if your spouse was convicted (or received deferred adjudication) of a “family violence offense” within two years of the divorce. 

   It is possible, however, to reach an agreement with your spouse to provide “contractual alimony” regardless of the Texas law. Sometimes, an offset is given the paying spouse, increasing his share of assets to compensate for the present value tax-adjusted alimony payments.  The need for support and the ability of the other party to pay it can be illustrated by financial planning graphs and tables created by a Divorce Financial Analyst.