Category: Property Division

It's usual that spouse try to hide assets in time of divorce

How to Find Hidden Assets During a Divorce

Posted on | by Jeff Rodriguez | Leave a Comment on How to Find Hidden Assets During a Divorce
Reading Time: 6 minutes

Some divorces go smoothly. But experienced family law attorneys will tell you it is not unusual for a divorce to get ugly. And one of the things couples fight over most often is assets. This includes cash, houses, buildings, and other assets the couple shares. And some couples fight over assets they don’t share: Sometimes, one spouse will try to hide assets from the other. Attorneys will tell you it takes work to dig up things your spouse is concealing, but it can be done. So here’s what you need to know about how to find hidden assets during a divorce. 

It Is Not Unusual for Divorcing Spouses to Conceal Assets

The first thing to know is that financial “cheating” is common—very common. For example, in a recent survey by the National Endowment for Financial Education (NEFE), 42 percent of respondents admitted to cheating on their partners financially. 

Part of the reason for this is that Texas is a community property state. This means that, with some exceptions, all property acquired during the marriage is owned equally by both spouses. For some spouses, the idea of having to split the assets equally with their future ex is enough to motivate them to act illegally. 

One of the most common reason for hiding assets, spouse want to minimize the child or spousal support
One of the most common reason for hiding assets, spouse want to minimize the child or spousal support

Spouses also may be motivated to hide assets because they want to minimize the amount of child support or spousal support they will have to pay. Others want to hide behavior that has gone on previously—for example, gambling, drug use, or purchases for a mistress. 

And some people try to hide assets for the worst possible reason: Because they think they can get away with it. 

What Are the Most Common Hidden Assets?

A spouse can try to hide almost anything during a divorce. But generally, they will conceal something of value. Here are some likely hidden assets during divorce:

  • Investment accounts and offshore accounts
  • Real estate
  • Inherited monies and trust accounts
  • Credit cards
  • Fine art and jewelry
  • Bonuses

Family law attorney Sean Lynch notes that dishonest spouses will tend to focus on cash and items that do not create an obvious paper trail.

“Cash makes it harder to trace the individual’s activity,” he said. “And once the money is gone, it’s gone. Judges try to split the assets 50/50, but they can only go off the numbers presented to them.”

Signs Your Spouse May Have Hidden Assets

Lynch said that, while every case is different, some warning signs may indicate your spouse is hiding assets. These include:

  • Being secretive or vague about finances, accounts, etc.
  • Maintaining total control over accounts and finances
  • Having a private PO Box or mailbox
  • Erasing computer records or programs
  • Frequent stock sales
  • Unusual purchases, trips, or activity
  • If your spouse has a safe deposit box

Some people will try to deceive the spouse by constantly complaining about a lack of money. And others will complain about having no money while at the same time seeming to live a lavish lifestyle. 

How Do Spouses Hide Assets During a Divorce?

As you might expect, there is no limit to the number of ways a spouse can conceal the couple’s wealth. Some people will do it by opening new accounts in the name of the children. If asked, the partner may make an excuse, saying it is a fund for the children’s future. Or they can transfer stock ownership to an ally, and then transfer it back later. 

People also try to hide assets by doing business with family or friends. For example, your spouse may sell the family boat to his buddy at a bargain deal, with the intention of buying it back later. Or your spouse may give a gift to a family member, again with the intention of reclaiming it after the divorce.

Lynch added that deceitful people sometimes try to create ownership. For example, the house may be in their parents’ name. “Or we might have a situation where the guy’s wife’s brother bought his truck for him and the payments are going to him,” he said, “Or maybe he is storing his RV at a buddy’s place.”

How Can a Business Owner Hide Assets During a Divorce?

Family-owned businesses provide a convenient way to conceal wealth, making it harder to find hidden assets during a divorce. 

“By running everything through the business, a person can greatly lower his or her personal income,” Lynch said. ”This is especially common when it comes to paying child support. If your spouse hides assets in the business, he or she may be able to significantly lower the payment amount.” 

Here are three ways business owners can hide their wealth:

  • Unreported income: Businesses that work in cash can easily conceal their income.
  • Phony payments: The owner may “pay” friends for products and services they did not actually do, artificially reducing the owner’s wealth. 
  • Nonexistent staff: The owner may be “paying” employees who don’t exist, helping hide total assets. This is another way the owner can appear to be “poor.”

Also, both business owners and regular employees may have offshore accounts. 

“Most clients are very upfront,” Lynch said. “They just want to be done with the divorce. The ones you have to keep an eye on are the people who are approaching the case like a battle they have to win. They often try to show themselves only in the best possible light.”

How to Reduce Your Risk of Losing Assets in a Divorce

In a difficult divorce, an experienced family law attorney can be your best ally. However, even the best attorneys need help. One of the best things you can do to help your attorney find hidden assets during a divorce is to become knowledgeable about your finances.

In a complicated divorce, family law attorney can help you to reduce the risk of losing assets
In a complicated divorce, family law attorney can help you to reduce the risk of losing assets

“It’s not unusual for one spouse to handle most of the finances,” Lynch said. “But if you are getting divorced, being financially uninformed is a real handicap. If the other party is hiding something and you are not aware of it, it makes my job much harder. Initially, have to go off what the other party says.”

Lynch believes being financially informed is good advice for everyone, not just divorcing couples.

“Even if divorce is the furthest thing from your mind, it’s wise to be knowledgeable about your financial affairs,” he said.

How to Find Hidden Assets in a Divorce

So what should you do if you suspect your spouse is holding back on you? Lynch said to find hidden assets, you must take action—and the sooner, the better. 

“If you’re suspicious, the first thing is to get more involved in the day-to-day family finances,” he said. 

You also will want to start collecting documents as soon as possible. That includes bank account statements, credit card statements, loan paperwork, retirement account records, and other information about your assets.

One of the best things you can do is get your own copy of your tax returns. And you should keep a discrete eye on your spouse’s credit reports and spending habits, particularly for expensive items. In extreme cases, you may even need to hire a private investigator.  

“If you suspect your spouse is hiding assets from you, act quickly,” Lynch said.

Last, don’t sign any important documents that you do not fully understand.

If You Think Your Spouse is Hiding Assets, Talk with an Attorney

Of course, if you’re worried about the honesty of your spouse, you probably also are worried about the stability of your marriage. If you are considering divorce, Lynch recommends you speak with an experienced divorce attorney as quickly as possible. And as difficult as it may be, you need to tell the lawyer that you may need help finding hidden assets. 

The attorney will be able to provide good legal advice. In some situations, the attorney may even hire a forensic accountant to help track down hidden assets. 

“If your spouse is hiding stuff, there usually is going to be a paper trail,” Lynch said. “For example, all of sudden, it looks like his direct deposit paycheck is a little smaller. Or maybe they took out a second mortgage on the house.” 

Sean Lynch is a Metroplex Attorney Who is Experienced in Discovering Hidden Assets During Divorce Cases

Attorney Sean Lynch is ready to represent your hidden asset divorce case.
Attorney Sean Lynch is ready to represent your hidden asset divorce case.

Are you concerned that your ex might have a hidden bank account or other assets? Talk with the award-winning family law attorney Sean Lynch, PLLC. He can help you prepare your case and track down the assets that you rightfully deserve a share of.

For a no-cost case review, contact him today or call 817-668-5879.

Be careful before signing any paper in time of separation

How Do I Find The Assets My Spouse Is Hiding From The Divorce Court?

Posted on | by neal | Leave a Comment on How Do I Find The Assets My Spouse Is Hiding From The Divorce Court?
Reading Time: 9 minutes

If you are in the middle of a divorce, you might suspect your spouse of trying to hide assets to avoid sharing them with you. Property division in Texas follows the community property principle. This means that marital property must be shared equally in a divorce.

A recent survey by the National Endowment for Financial Education (NEFE) found that 42% of American couples admitted to cheating on their partners financially. The same institution found that 40% of American couples who manage their finances jointly admit to keeping money secrets from their spouses.

While an experienced family law attorney may be good at finding hidden assets and has legal discovery tools available to them, it can still be challenging to find hidden assets in divorce if you’re not knowledgeable about your finances.

“In a lot of marriages, it’s not unusual for one spouse to handle most of the finances,” Sabelhaus+Lynch attorney Stephanie Sabelhaus says. “And we understand that.”

“But if you are getting divorced, being financially uninformed is a real handicap. If the other party is hiding something and you are not aware of it, there’s just not much we can do. We have to go primarily off what the other party says, which may or may not be true.”

Your lawyer also has to submit more requests and commit more time towards finding hidden assets, which can mean higher attorney expenses.

“Even if divorce is the furthest thing from your mind, it’s wise to be knowledgeable about your financial affairs. While it is typically the wife who is less financially informed, husbands have been known to make this same mistake,” Sabelhaus says.

Why Do Divorcing Spouses Hide Assets?

Ex-spouses may attempt to hide assets from one another during a divorce for several reasons, including the following:

  • They think the law might not share their assets in a manner they would be satisfied with
  • The possibility of surrendering or paying more than what they feel their former spouse deserves
  • They want to conceal certain behavior or conduct from their ex-spouse
  • They want to avoid paying child support or spousal support
  • The divorce is a high-asset case
  • One spouse was solely in charge of the property or assets

What Are The Most Common Hidden Assets?

Divorce or separation can turn ugly fast, and some former spouses may attempt to conceal assets. Some individuals may also sell any assets that can be easily converted to cash, such as bonds and stock shares

Other assets that might be hidden include:

  • Investment accounts
  • Bonuses
  • Real estate
  • Inherited monies
  • Trust accounts
  • Offshore accounts
  • Credit cards
  • Fine art
  • Jewelry

Signs Your Spouse is Hiding Assets

Spouse can hide assets from court for several reasons
Spouse can hide assets from court for several reasons

While you might not expect your partner to prevent you from getting what is legally yours, it’s not uncommon. There are many behaviors people engage in when they are concealing assets.

Here are some signs your spouse might be hiding assets:

Being secretive about money

Your spouse might generally be secretive about money and give vague answers when you ask questions about your finances as a couple. They might keep away tax returns and bank statements, and generally handle bank matters by themselves.

Maintaining total control

Your ex may maintain total control of shared resources and assets, including bank account details and passwords. It is your right to know as much about your family’s financial status as your partner does. You should have access to any joint bank account.

Deleting computer records or programs

Another way that a person may hide assets is by erasing financial records or computer programs like QuickBooks or Pastel. He or she may also claim that a computer has crashed when they have actually destroyed or stolen the hard drive. In some cases, they may regularly hide or dispose of paper statements.

Having a private mailbox

Your ex may own a private mailbox or separate PO Box to receive important financial information secretly. In this case, some spouses may consider using a private investigator to monitor the other person’s activities.

Complaining about money

Your ex may keep complaining about the bad state of their finances, like a major debt, mysterious loss of business, or unsuccessful investments. This may be an attempt to get you to think they don’t have as many assets. Overstating, exaggerating, or lying about one’s financial struggles can also end up skewing the property settlement in the other party’s favor.

Income and lifestyle discrepancies

If your ex lies about his/her earnings but is visibly living a lavish lifestyle, chances are he/she is concealing assets. For instance, if he or she takes expensive vacations or makes ridiculously extravagant purchases, chances are that he or he is lying about his or her financial situation.

Sudden or mysterious account activities

If a shared bank account has previously had a consistent withdrawal rate, but you notice sudden or strange withdrawals and purchases, then something may be amiss. Keep an eye on the transactions passing through any joint bank account.

Asking for your signature

Someone who is trying to hide assets before divorce may keep demanding your signature on various financial documents. To be on the safe side, read financial documents carefully before signing it, or take it to your attorney for professional advice.

Gifting to loved ones and friends

Although giving gifts or large assets to family members or friends may seem like a generous act, it is a huge red flag. A spouse could reclaim the assets after the divorce is finalized.

Opening a new account

If you notice that your spouse is depositing money into a separate bank account from the bank statements, there is a chance that they may be hiding money. For example, your spouse may open another bank account with your child’s name to hide money. When asked, he or she may say they are saving for your child’s future milestones.

Frequent trips or financial activity overseas

If your ex has an offshore bank account or makes regular trips overseas without a good reason, you might need to investigate. Your lawyer may need to send an order to the overseas bank that you think your ex has an account in to get all records in his or her name.

Questionable business and/or tax practices

You might notice that your ex has started giving a salary to an employee you’re unfamiliar with. You might find that your ex exaggerates business expenses on his/her tax returns.

If your spouse has a business, it’s easier for them to hide money. “By running everything through the business, a person can greatly lower his or her personal income,” Sabelhaus says. “This is especially common when it comes to paying child support. The court uses a formula based on the individual’s wealth to determine how much he or she will have to pay each month. If your spouse hides assets in the business, he or she may be able to significantly lower the payment amount.”

If you notice any of these signs, you might need to take further steps to track your finances as a couple and investigate if your spouse is attempting to hide their income or money. In some cases, you might need to hire a private investigator.

Consequences of Hiding Assets During Divorce Proceedings

Hiding assets during a divorce is illegal
Hiding assets during a divorce is illegal

Not only can hiding assets lead to criminal penalties for the spouse involved, but the court may also transfer all of the discovered marital assets to the other spouse.

During divorce proceedings, both spouses are typically required to fill out a financial declaration form. This reveals all assets owned by both parties. Once you sign this form, you’re swearing under oath that what you have declared is correct to the best of your knowledge.

If one spouse doesn’t disclose his or her finances during a divorce, there are usually serious consequences. Once it is found that a spouse is trying to hide income or assets, the judge has several options for penalties to impose. These include:

  • Awarding a smaller share of the assets
  • Paying the legal fees of the other party
  • Criminal charges for perjury or contempt of court, which could lead to time behind bars.

What Should I Do If I Suspect My Spouse Is Hiding Assets?

Undervaluing marital assets, under-reporting income, or overstating expenses are more common than you might imagine.

Here’s what you can do to find hidden bank accounts and assets during a divorce.

How to Find Hidden Bank Accounts and Assets During a Divorce

Understanding the resources and methods used by professionals such as a forensic accountant, private investigator and a divorce attorney can help you avoid getting duped by your spouse or former spouse who is concealing marital property.

Here are a few common ways to find out if your spouse or ex-spouse is hiding assets from you.

Hidden Documents

Although the world is quickly going paperless, many paper documents are issued by the IRS, banks, and mortgage companies. Be mindful about the mail that comes in and find out where your spouse keeps those documents. Have your own copy of tax returns and any addendums.

You could find property titles, credit card statements, and bank statements that your spouse keeps in a certain location. It’s generally fine to look for documents in your own house or safe deposit box. However, hacking into another person’s online account or email account could be an illegal means of gathering evidence.

Credit Reports and Bank Accounts

One way for your ex-spouse to keep hidden assets is to open a secret bank account or credit card. Before the divorce process, he or she may transfer funds to the hidden bank accounts. If any small transfers go unrecognized for a long time, they can definitely add up. That’s why it’s strongly recommended to keep an eye on credit reports, tax returns, and bank statements before and during a divorce.

In addition to making these kinds of transfers to hidden bank accounts, a spouse may also transfer money to a friend or relative. Your spouse may also open new bank accounts in your children’s names and start transferring money to those accounts.

Therefore, one of the best ways to protect yourself and prevent your partner from hiding assets through hidden bank accounts is to keep a close eye on bank statements. If you believe that your spouse is trying to conceal the existence of a hidden bank account, consider working with a forensic accountant or private investigator.

You should also monitor credit reports. They can offer some important clues as to properties or bank accounts that your spouse may be hiding from you. The only thing that credit reports will not show is debit card accounts.

Monitor Spending Habits

Consistently review your spouse's bank statements during the divorce.
Consistently review your spouse’s bank statements during the divorce.

Your spouse may also be buying assets. For instance, your spouse may buy a new car, furniture, or other high-value items like jewelry.

Chances are that they may be buying such things to sell them and make money post-divorce. That is why it’s recommended to keep a close eye on any large purchases. It may be a way for your ex to retain hidden assets.

Seek Professional Help

Dividing assets during a divorce can create issues that have a long-lasting impact on your life. If you are going through a divorce, you need an experienced divorce lawyer on your side to ensure you receive the full amount of assets you are entitled to – and discover hidden assets.

Experts recommend you talk to an attorney if you or your former spouse:

An experienced attorney can conduct an asset search investigation to determine if a spouse has any assets that he/she is not accounting for. A qualified attorney can also handle the legal process to help find hidden bank accounts and get more information about the hidden assets.

For instance, an attorney can provide help and support in the following ways:

  • Request the testimony of a witness under oath
  • Request the court to order an asset search
  • Demand bank statements, loan applications, tax returns, and other documents
  • Request that a spouse answer written questions or “interrogatories”
  • Make search demands, including demanding an asset search investigation in certain properties and electronic records.

You may also want to hire forensic accountants and private investigators to help you discover potential fraud and illegal concealment of marital assets.

Timing is Everything

If you’re contemplating filing for a divorce or are already going through one, it is important to take stock of all marital assets as soon as possible. It’s not uncommon for spouses to hide assets when the divorce process begins.

If you suspect that your spouse has been concealing marital property and tax returns, discuss it with your divorce attorney. This is particularly important if one spouse has been the main breadwinner or has been solely responsible for evaluating bank statements and paying bills during the marriage.

Your divorce lawyer will find the best way to gain a good understanding of your shared assets and resources. That could involve requesting your ex to provide documents and subpoenaing banks and other institutions to provide the necessary information about your marital assets.

If you’re considering filing for divorce, it’s best to start collecting documents as soon as possible. That includes business account records, bank statements, loan paperwork, retirement account records, and other forms of information about your marital assets. This sort of information will come in handy when your divorce attorney starts to work on your case.

In some cases, you might be convinced that there are hidden assets somewhere but it may not be worth the cost. Sabelhaus has experienced this a few times with clients.

“A client might say, ‘I know he has an extra $1,000 or $3,000 hidden somewhere’,” she said. “And I understand how that can be a lot of money for some people. But you have to weigh it against the added legal expense of trying to find that money—and the stress of dragging out the divorce. Instead of focusing on victory at any cost, it makes more sense to focus on being as financially informed as you can now.”

Attorney Sean Lynch is ready to represent your hidden asset divorce case.
Attorney Sean Lynch is ready to represent your hidden asset divorce case.

Are you seeing signs that your ex might have a hidden bank account or assets somewhere? Not sure about the options available to you to find hidden funds when your marriage is ending?

Let the award-winning Family Law experts at Sabelhaus and Lynch law firm help you prepare your legal case. We have years of experience in family law and most importantly are ready to listen to you.

Contact us today for a no-cost case review.

Your Ex Withholding Tax Information During Divorce?

Posted on | by neal | Leave a Comment on Your Ex Withholding Tax Information During Divorce?
Reading Time: 5 minutes

The exchange of information and the property division process after a divorce can be a challenging one. What can make things worse is your ex withholding tax information during divorce and being entirely uncooperative.

Even after divorce, trying to figure out the process of filing taxes is a whole new obstacle. Unfortunately, you do need to work with your ex when you claim the child on your tax return.

Here’s what you need to know about tax information during divorce, filing taxes after a divorce and what to do if your ex does not cooperate.

Tax Information During Property Division, Child Support and Alimony Payments

Tax penalties and refunds don't wait for divorce. Work with your attorney to get what you need to stay in compliance.
Tax penalties and refunds don’t wait for a divorce. Work with your attorney to stay in compliance with the IRS.

As a result, your ex may withhold information as that might result in higher child support payments as part of the divorce agreement if they are a non-custodial parent. This can also potentially lower the child support payments that you receive if they are the custodial parent. There can also be implications on alimony payments received.

Both parties are required to make full disclosure of their assets when going through a divorce. This also includes information about taxes which can often reveal assets that you might not know that your ex-spouse had.

If alimony and child support is an issue during a divorce, you and your ex-spouse must provide the following information to each other:

  • Income tax returns for the previous two years
  • Form W-2, Form 1099, and Schedule K-1 if you did not file a tax return for the preceding two years
  • Two most recent payroll check stubs

This is in addition to other information about personal finance, retirement plans, account statements, property owned, and insurance policies.

Consequences of Property Division

It’s important to consider the tax implications of asset division. Property transfers can be subject to income taxes or gift taxes except under certain conditions.

Generally, the transfer of property to an ex will not be subject to capital gains tax or gift tax if it occurs within one year of the marriage ceasing or if it is pursuant to a divorce agreement (including modifications). The timing if you decide to sell your home will also be important for tax purposes.

Child support is not a tax-deductible expense in the payor’s income tax return if your divorce was final by Dec 31, 2018. You also cannot deduct alimony payments from your tax return. The spouse who receives alimony or child support also does not need to report it as taxable income if the divorce was final by December 31, 2018.

Filing Taxes After Divorce

There are a few things that you need to be aware of when filing your taxes after a divorce.

Filing Status

Even during a pandemic, the IRS enforces due dates for your tax returns. Don't let your ex's bad behavior cost you penalties.
Even during a pandemic, the IRS enforces due dates for your tax returns. Don’t let your ex’s bad behavior cost you penalties.

Your filing status depends on your marital status. If you are divorced by 12 a.m. on December 31 of the tax year, you will be filing separately from your ex. You can file as Single or Head of Household on your separate tax return if you have dependents. This is possible even if you were still married for some months of the year. You will be considered as single for the entire year by the IRS.

However, if you don’t have your divorce decree or legal separation by 31 Dec of the tax year, you are only able to file as Married Filing Separately or Married Filing Jointly. It can become a point of contention with your ex if you have to still file a joint return, although there may be a tax deduction for married couples. Note that your ex can’t file a joint return without your knowledge. Both spouses must sign a joint tax return for the IRS to accept it.

Filing as Head of Household

If you file as Head of Household, it may be more favorable for you. Doing so can allow you to have higher standard deduction and better tax brackets. However, you will need to have had a dependent living with you for more than half the year. You must also show you paid more than half of the maintenance of your home.

Claiming Your Child As A Dependent On Your Tax Return

A noncustodial parent cannot claim the child tax credit on their tax return. Only the custodial parent gets to claim a child on their tax return.

However, divorced parents may still be eligible for certain tax credits even if you can’t claim your child as a dependent. You may also be able to claim some medical expenses that you pay for your child. Speak to a tax expert for updated tax advice.

You do not have to split your tax refund with your ex in exchange for claiming your child after the divorce is finalized.

Requesting Information From Your Ex

You can send your spouse a Request for Production of Documents to ask them to provide information for fair property division. You can also send Interrogatories which are questions that your ex-spouse has to answer under oath. Your ex must respond to these requests or state legal objections.

If you don’t want to wait for your ex, you can have your attorney send a subpoena to third parties who have the financial information relevant to your divorce. You can also send a deposition subpoena so your ex or a third party has to appear in court to be questioned under oath and provide evidence.

Seeking Court Orders

If your ex refuses to provide information, you can ask your attorney to take the issue up with the court. You can file a Motion to Compel which will have the court order your ex to provide the documents requested. Your ex will have to file a written response and write the reasons why they are not providing the information. The judge then decides if the reasons are legally fair and not protected by any legal privilege. If the judge finds in your favor, they will order your ex to provide the documents within a certain time period.

Being Held in Contempt

If your ex refuses to comply with the court order, your spouse may be held in contempt. They can be liable for fines, jail time, an attorney’s fee award where they have to pay your attorney’s fee incurred in filing the court order and disallowing your ex from adding some types of evidence when the case goes to trial.

Navigating Tax Issues in Fort Worth, Texas

Sean Lynch will fight to protect your rights even in the most contested divorce and at a price, you can afford.

When you’re getting a divorce, many tax questions can arise when you have to obtain tax information to determine a fair divorce settlement or when you have to divide assets.

It’s important to engage a qualified tax expert and attorney to help you with these issues to protect your rights. Our family law experts at Sean Lynch with decades of experience can help. If you have any questions, contact us for a no-cost case review.

Why You Should Get a Prenup

Posted on | by Jeff Rodriguez | Leave a Comment on Why You Should Get a Prenup
Reading Time: 5 minutes

You may have heard in the news recently that Bill and Melinda Gates announced that they are getting a divorce after 27 years of marriage. The couple does not have a prenuptial agreement, even though they are worth about $146 billion. So you might be wondering: If Bill Gates doesn’t need a prenuptial agreement, do I? The answer generally is, yes. So here are a few tips on why you should get a prenup, and what can go wrong if you don’t have one.

What Is a Prenuptial Agreement?

A prenuptial agreement—or “prenup,” as they are usually called—is a legally binding contract people sign before getting married. In the event of divorce, the prenup will determine how the couple’s assets will be divided. These assets can include the house, land, retirement accounts, automobiles, and accumulated wealth.

The future spouses must finalize the prenup before they get married. The terms of the prenup become effective as soon as the two parties get married. In Texas, prenuptial agreements are usually referred to as premarital agreements.

Who Should Get a Prenup?

A family law attorney will answer your questions before you are married.
Whatever questions you have about a prenuptial agreement are worth being answered by an attorney answer.

You don’t have to be a millionaire to need a prenup in your marriage. Following are some of the conditions why it is beneficial for you to have a prenup:

  • Does either person have property?
  • If one partner is much wealthier than the other
  • If either spouse has an existing estate they wish to secure
  • Will either spouse be remarrying?
  • If either spouse has children
  • Does either spouse have significant debt?

You also will want to get a prenup if either spouse is remarrying. Read our blog on how a prenup shaped a successful second marriage. 

Of course, this is not a complete list. If you have any doubts about whether you should get a prenup, we encourage you to talk with a family law attorney. 

What Does a Prenuptial Agreement Usually Cover?

Prenuptial agreements typically focus on how the couple’s assets will be divided in the event of divorce. However, the agreement usually includes much more. Common issues include:

  • Allocation of property, including homes, buildings, business, and land in the event of divorce
  • Allocation of property, including homes, buildings, business, and land in the event one spouse should die
  • Right to use, sell, or lease property and possessions
  • Terms of alimony (also known as spousal support or maintenance
  • Rights to a life insurance policy benefit in the event of death
  • Issues regarding the writing of the will or setting up of a trust fund. 
  • Documents how household expenses will be paid
  • How existing debts will be handled
  • Clarifies how much each person can withdraw from the other person’s retirement savings
  • Any other issues of special interest to either future spouse

Prenups Can Address Alimony in the Event of a Divorce

A prenuptial agreement can protect both parties in a marriage.
Like all important conversations surrounding the marriage, a prenuptial agreement should be worth discussing to protect both parties.

In Texas, alimony is referred to as “spousal maintenance.” You may also hear it referred to as spousal support If the marriage ends, one of the two parties often is expected to pay money to the former partner. 

However, the law permits prospective spouses to address this topic in their prenup. For example, the couple can agree to a predetermined level of support. The prenup also can address cost-of-living adjustments or affirm that one partner will waive the right to receive alimony.

Alimony is an uncomfortable topic. Couples may not enjoy addressing all of these issues before the marriage. But it can save a lot of grief later in life, as well as a lot of lawyer fees. Spousal support is addressed in Section 8 of the Texas Family Code.

If You Have Children, the Prenup Should Cover Custody and Child Support

On the other hand, a prenup in Texas cannot address future child custody issues. The family law court makes these decisions. The Texas Family Code Section 153 states that the court must make custody decisions based on “the best interest of the child.” 

Thus, when a judge is making decisions about custody and how much child support should be paid, the prenup is not likely to be very important. The Texas Family Code Section 4 discusses premarital agreements.  

Many people are not aware that if one of the two parties has a change in financial circumstances after the divorce, the child support requirements can be changed. Read our blog on how to change a Texas court order for child access. 

How Can I Ensure My Prenup Is Enforceable in Texas?

Texas follows the guidelines of a document called the Uniform Premarital Agreement Act (UPAA). This document helps courts determine when and how prenuptial agreements should be enforced. The UPAA also allows parties to choose which state’s marriage laws will apply in terms of division of property and spousal support

For the prenup to be valid, the agreement MUST be in writing. A verbal agreement is not acceptable. In addition, the prenup is valid only if both parties entered into it voluntarily. The terms of the prenup also cannot cause a future spouse to require government assistance.  

What Are Some Reasons Why A Prenup Would Be Unenforceable?

Don't expect an informal marriage contract to comply with Texas Family Law Code requirements.
A family law attorney can help craft an agreement that will hold up if challenged.

As noted, to be legally enforceable, both parties must sign a prenup voluntarily. In addition, the prenup may be invalidated if it is “unconscionable.” This means the court determines that the terms of the prenup are grossly unfair to one of the two parties.

A prenup may be ruled “unconscionable” if one of the spouses failed to provide the other spouse with an honest and accurate disclosure of all financial obligations and property owned. The court also may invalidate the prenup of one of the two future spouses who did not have adequate knowledge of the other spouse’s financial assets and obligations. Read our blog on what prevents a prenup from being enforced. 

Can I Change My Premarital Agreement After Marriage?

Yes. After getting married, the couple can create a new contract, called a postnuptial agreement. The document can modify or invalidate some or all of the terms of the initial contract. As before, the new agreement must be in writing, and both parties must voluntarily agree to sign it. 

A Prenup Can Protect Both Parties if Your Marriage Ends

When two people are planning a marriage, they don’t want to think about getting a divorce. Just remember that the statistics are not on our side. : Roughly 50 percent of first marriages end in divorce, and about 60 percent of second marriages. And just in case you are considering a third marriage, the divorce rate is about 70 percent. 

Without a prenup, the dissolution of your marriage can be stressful, messy, and expensive. On the other hand, having a prenup can give both of you peace of mind, potentially strengthening your marriage. And if you are one of those fortunate couples who never need your prenup, we will be very happy for you. 

Two of the Best Fort Worth Divorce Attorneys

Sean Lynch are ready to answer your prenuptial questions and protect your assets.

Let the award-winning family law attorneys at Sean Lynch law firm help you prepare your case. We have years of experience in Texas family law, serving parents and clients in Fort Worth, Arlington, and Tarrant County. We will use that experience to help you draft a prenuptial agreement that is fair, affordable, and easy to understand. Contact us today for a no-cost review and initial consultation, 817-668-5879.

Court Ordered Home Sale

Court Order Sale of House in Divorce

Posted on | by Jeff Rodriguez | Leave a Comment on Court Order Sale of House in Divorce
Reading Time: 5 minutes

For many people, their most valuable asset is their home. And if you are going through a divorce, your home can become a point of real contention. Should you sell the house or not? And if you don’t sell, who gets to keep it? Perhaps the biggest question of all is, “Can the court force us to sell the house?” The short answer is Yes. But as you might guess, it’s not that simple. So here is a brief explanation of a court order sale of house in divorce.

Why Courts Have the Authority to Order the Sale of a House

Major assets often block divorce resolution.

Texas is a community property state.  This means that, in most cases, any property acquired by the couple during their marriage is owned equally by both spouses.  Ideally, the two spouses are able to reach an agreement on the marital property by working with their attorneys.

But sometimes, the parties cannot agree. One spouse may want to sell the house, while the other wants to stay in the house until the kids have finished school. Or perhaps both parties think they should get to keep the family home. In these cases, the court may get involved.

The court’s goal is to achieve “equity.” This means they want the divorce terms to be fundamentally fair to both parties. The Texas Family Code gives judges considerable authority on how to achieve that fairness. Thus, courts have the authority to order marital property to be transferred from one party to the other. They also can order the sale of the real estate before the divorce is finalized.

The Court May Order the Sale of a House to Help the Couple

The judge can force asset sales if both parties cannot agree to an equitable split.

Finances are another possible reason for a court-ordered sale of a house in a divorce. For example, if the primary breadwinner loses his or her job, the couple may be financially stressed. The couple may be falling behind on mortgage payments and facing foreclosure.

The couple may tell the judge that they do not have a reasonable expectation that their financial prospects will improve any time soon. may order the house to be sold before the divorce in order to help the couple get as much money as possible from the sale.

The court can also retain authority over the property for a set period of time. For example, the couple may agree that one spouse is going to keep the house and pay off the other for the value of the home or refinance the house so that the ex’s name is not on the mortgage.

In the event the person remaining in the home does not fulfill the settlement terms within a designated amount of time, the court can order the sale of the house.

Can a Court Order Sale of a House be Ignored?

No. The terms of a divorce decree, including decisions about the family home, are final. In fact, if the court has ordered the sale of the house, the parties cannot later agree to have one person buy it from the other.

There is one option. In a divorce, both parties have 30 days to appeal a family court decision in Texas. This includes not only real estate but decisions regarding other community property and custody of the children.

You Can Avoid a Court Order Sale of a House in a Divorce

Strong memories of a family home shouldn’t stop you from moving forward to your new happy life.

As we have seen, judges have great authority in deciding the terms of a divorce. And their ruling is basically final. However, it’s relatively easy to avoid a court order sale of your house in a divorce. All you have to do is come to an agreement with your spouse.

In an uncontested divorce, you and your spouse are in full agreement about the key issues. The agreements include custody, child support, and of course, division of assets.

Planning for the Sale of Your House in a Divorce

If you and your spouse agree to sell the house, you will need to be very specific. It’s not enough just to say, “We’re going to sell it.” Following are some details the two of you will need to resolve:

  • How much will you ask for the house? What if you can’t agree?
  • Will we use a Realtor? How will we choose one?
  • Which one of us will be the primary contact?
  • What process will we use when an offer is received?
  • How long will we wait before reducing the price? How much will we lower the price?

If you are looking at the sale of a house in a divorce, no detail is too small. You may even try to draft the description of the property in advance. It’s also a good idea to develop a contingency plan. For example, what happens if one of the two spouses becomes very sick? Can the other party proceed on his or her own? As for when is the best time to sell, we encourage you to read our blog Is It Better to Sell Your House Before or After a Divorce? – Sean Lynch, PLLC (seanlynchlaw.com)

An Attorney Can Help You Avoid Court Intervention

A divorce attorney can fight for your right to stay in your home after a divorce.

You can sell your house without going to court. You also can do your divorce without an attorney. But we understand divorce can be harder than that—sometimes, much harder. So while it’s admirable for you to think “My spouse and I can work everything out on our own,” sometimes, it just isn’t feasible.

This is particularly true when it comes to questions about property division and child custody arrangements. Both issues can get very complicated, as well as very emotional.

An experienced family law attorney will be very familiar with these situations and can help you anticipate some of the issues that may arise. For example, he or she can help you draft the agreement regarding your community property. A skilled divorce lawyer can help you and your spouse come to mutually satisfactory terms. They also can help you avoid making a mistake or having an unpleasant outcome—such as a court order sale of a house in a divorce.

Fort Worth Family Law Attorneys with Experience and Expertise

Let the award-winning Fort Worth family law attorneys at Sean Lynch law firm help you prepare your case. We have extensive experience in Texas family law, including cases involving homes and other marital assets. Whether you are expecting your divorce to be simple or difficult, we are ready to serve you. For a no-cost, 30-minute case consultation, contact us today or call 817-668-5879. 

Is It Better to Sell Your House Before or After a Divorce?

Posted on | by Jeff Rodriguez | Leave a Comment on Is It Better to Sell Your House Before or After a Divorce?
Reading Time: 7 minutes

Ending a marriage changes many things in your life. And one of the things that can change is your residence. It’s not unusual for couples who are divorcing to decide to sell their current home. But once they’ve made this decision, there’s a second one to consider: When to sell? There is no simple, one-size-fits-all answer. Even so, there are some general guidelines that apply for most situations. So here are some tips to help you decide whether it is better to sell your house before or after a divorce. 

If You Try To Sell Your House Before a Divorce, You Are More Vulnerable to the Market 

As you probably know, the housing market in the DFW area these days is pretty hot; some would say the local housing market is red-hot. So generally speaking, it’s a good time to sell. 

But that might not always be the case. What’s more, if you know anything about real estate, you know that location, location, location, is important, important, important. 

So it’s possible that your home may not enjoy the benefits of our hot housing market. You may not get the price you were hoping for. Or you may not get any quality offers, and be stuck with your house for months. And if your settlement calls for the home sale to close before the divorce is finalized, you could be stuck with your spouse as well. 

If You Try To Sell Your House Before a Divorce, It Could Slow Down the Divorce

Selling your home before or after a divorce has significant tax implications and can impact the time your final divorce decree is finished.
Divorce impacts every aspect of your life but dragging it out over a home sale might be one issue you wish to avoid.

If you have ever sold a house before, you know there are a LOT of decisions to be made. But if you and your spouse have not been getting along very well right now, you might find it very difficult to work to make decisions together; you may even find it impossible. 

For example, the two of you will need to agree which things will stay with the house and which ones will go. You’ll also need to agree on (and agree to pay for) repairs and improvements. And you’ll need to agree on how much to list the house for. 

And if you can get past all that, you’ll need to agree on one of the biggest decisions of all: Whether to accept an offer. 

Even for happily married couples, these can be difficult decisions. Now add in the hurt and anger that many people feel during a divorce, and it’s easy to see how messy things can get. Every decision, no matter how small, can become a battle. 

So if you decide to sell your house before a divorce, be aware that any tension between you and your spouse could slow down the sale. And that, in turn, can slow down your divorce. 

A Realtor Can Be Very Helpful 

The right realtor can help you avoid the added stress of having to find a new home during a divorce.

One way to avoid this problem is by hiring a Realtor. This person can advise the two of you on many of these issues, including the listing price, repairs, etc. But there are two potential pitfalls to this plan. For one, the two of you have to agree on a Realtor. After that, the two of you have to be careful not to put the Realtor in the middle of your marital conflict. 

You should keep in mind three other things when deciding whether to sell your house before or after a divorce. 

First, if you sell the home, the two of you will need to agree in advance on how you will divide your property and possessions. This includes, of course, the profits from the sale. 

Second, if the sale proceeds are part of the divorce settlement, you may have to wait until the sale is finalized and the funds have been properly disbursed before you can finalize the divorce. 

The third potential problem: It’s possible your spouse won’t want to sell at all. For each of these situations, you will need more than a Realtor to help you resolve the conflict. We suggest you hire an attorney.

You May Be Able to Sell Your House After the Divorce and Avoid Some of the Capital Gains Tax

If you are worried that selling your house will delay your divorce, there is an alternative option. Your divorce attorney can propose selling the house in the future. In addition to avoiding some of the immediate conflict, this approach also might allow you to protect the capital gains tax exclusion that married couples enjoy. We recommend you speak with an accountant about this. 

If You Sell Before the Divorce, You May be Able to Avoid the Capital Gains Tax

As the IRS knows, being married has many benefits. One of the biggest advantages for married couples is the capital gains tax exemption. If you sell your house while you are still married, the two of you can usually exclude up to $500,000 of the home equity from capital gains. 

Obviously, this is a pretty significant factor. However, it’s a good idea to speak with an accountant or financial advisor about your options. 

If You Sell Your House After the Divorce, It May Be Less Stressful, and More Profitable

Divorce can be exhausting. You may be feeling a range of emotions, including anger, bitterness, and fear. 

But as they say, time heals all wounds—or at least, many of them. If you wait to sell your house until after the divorce is finalized, you and your ex may be on better terms. Your thinking may not be as clouded by emotions. And the two of you may be able to discuss things calmly and work together on the sale of the home. 

In addition, if you wait to sell the house, it is likely to appreciate in value. You’ll be able to pay down the mortgage even further, creating the opportunity for additional profit when you do sell. 

You Could Take a Significant Tax Hit If You Sell Your House After a Divorce

If a house has been your primary residence for at least two years, you can usually exclude your home equity income from the capital gains tax. However, if you wait several years to sell the house, you will probably have to pay capital gains. 

It’s also not uncommon for one person to get sole ownership of the home in a a divorce. But if you sell the home after you’re single, you’re only able to exclude up to $250,000 from the capital gains tax—not the $500,000 amount married couples enjoy. 

As previously noted, you may be able to avoid this tax hit by including provisions for the sale of the house after the divorce is finalized. 

If You Sell Your House Before the Divorce, It Can Be Easier to Prepare for the Future

Although divorce marks the end of your marriage, it’s also the beginning of a new life. By selling your house before a divorce, you will (probably) be entitled to a significant amount of cash. 

You may really appreciate having those funds available. For example, you could use the money to pay for a rental place. Or you may be able to make a down payment on a new home. Regardless of your plan, it can be comforting knowing that you are starting your new life with a decent amount of reserves. 

It Also Can Be Easier to Move On From the Past

Most people have at least some emotional connection to their home. It may be the first house the two of you bought together, or the house where you raised your children. That house may hold a lot of memories—and after the divorce, those memories may be painful. 

Of course, if you have children, the decision can be more complicated. The divorce will cause enough upheaval on its own. Won’t moving to a new house make things even worse? It’s a fair question. 

Every situation is different, but there’s good reason to believe that selling your house before a divorce can cut a big connection to your past. Moving to a new place can be emotionally beneficial for everyone—you, your ex, and for your children. 

The Longer You Wait to Sell Your House, the Longer You Will be Tied to Your Ex

After a divorce, most people want to move on. But if you wait to sell your house, the two of you will remain co-owners of the house, and you’ll have to work together on the logistics of maintaining the home. 

This includes decisions on paying the mortgage and utilities, maintaining the home, and making repairs. This arrangement also can impact your taxes, as you will need to make decisions on how to handle property taxes and mortgage interest tax credits.

In addition, co-owning a home may make it harder for you to buy a new house. The shared mortgage impacts your debt-to-income ratio, an important factor when you apply for a home loan.

So Is It Better to Sell Your House Before or After a Divorce?

When you’re going through a divorce, you’re already dealing with a stack of life-altering decisions. Trying to sell your house before a divorce adds another very big factor to the equation. At the same time, we can clearly see many potential benefits to selling the house while you are still married. 

Ultimately, you and your spouse have to weigh the pros and cons of each option. And hopefully, you can reach a decision you both agree on. 

Our Fort Worth Law is Ready to Provide Expert Assistance with Your Divorce

Even in the best of circumstances, it can be difficult to sell your house. So if you are going through a divorce as well, we encourage you to seek expert advice. A Realtor can help you make decisions about the value of the property, while an accountant can advise you on the potential tax implications. 

And for compassionate, experienced legal representation, contact Sean Lynch, PLLC. We have a reputation as being two of the best divorce attorneys in Fort Worth and Arlington. We are experts in divorce cases, including division of assets and custody decisions. Just as important, we are upfront about our pricing, so you know in advance what you’ll pay. To schedule a no-cost, 30-minute case consultation, contact our family law practice today, 817-668-5879.

Asset Division in a Texas Divorce Jeopardized My Retirement

Posted on | by neal | Leave a Comment on Asset Division in a Texas Divorce Jeopardized My Retirement
Reading Time: 5 minutes

I couldn’t take it anymore. My marriage was in shambles and I needed out. Losing my partner was bad enough, but then I realized my savings was unprotected. I had worked my whole life saving for retirement. The thought of losing everything in asset division to my ex was terrifying. 

Man dividing blocks with money drawn on them on a table.
It’s vital that you consult with an attorney before you lose your retirement. Photo by Haotk

A divorce is emotionally and physically draining. There are so many steps: hearings, arbitrations, legal motions, and meetings with lawyers. Additionally, you’ll have to relive all of the negative feelings that caused the separation. For me, the scariest part was dividing assets.

Anyone who has gone through the process with a Texas divorce judge knows your goal is to be fair but also to protect as much of your money as possible. When I started my divorce, I talked to a lawyer and learned how to protect my nest egg. Here are a few critical things that I’m glad I knew before I went to court.

How Property Division Works In A Texas Divorce

When it comes to divorce, Texas is one of the nine community property states. State law mandates that almost all of the property you acquired during the marriage (marital property) belongs to both spouses. This applies even if only one spouse earned it. Therefore, the court will split everything equally during asset division. Only the separate property of one spouse will not be divided.

This is different from equitable distribution states. During equitable distribution, the judge will split marital property acquired during the marriage according to what they determine to be fair to both parties. Courts in these states consider factors including the standard of living, the value of property brought into the marriage by either spouse, the value of separate property owned by each party, and the financial situation of each party at the time of the divorce. Equitable distribution does not start from the presumption of a 50/50 split of marital property.

Agree On Asset Division During Divorce

My ex and I were not really on speaking terms during the process. Things were beyond difficult in my case. When it came to my IRA, 401k, and pension, it would have saved a lot of heartache if my ex and I would have been able to come to terms on how to split marital assets before going to court. This would have made the divorce easier since the judge will accept whatever asset division the two of you determine. 

If you’re like me and the two of you can’t come to an agreement on how to split marital assets, then the court will have to make the decision. Because Texas is a community property state, the court will take all money both of you accrued as marital property and divide it equally between both partners. The only thing that’s protected from property division is separate property.

These assets can be divided in the divorce:

  • Real property and real estate (including the family home, vacation home and any time-shares)
  • Financial assets such as funds in bank accounts
  • Family business
  • Debts and debt repayment obligations
  • Insurance policies
  • Tax refunds and carryover tax losses

Even if both of you have agreed that one spouse will pay the debt that is in the names of both parties, the creditor can come after the other spouse for repayment if the spouse liable for the debts does not meet their debt payment obligations. An increase in the value of a business before the divorce can also be considered marital property even if only one party is the owner of the business. Income from the business itself, while you were married, can also be considered marital property which will be divided during the divorce.

Your Retirement Accounts Might Be Separate Property

Now here’s where you can save a ton of money with just a little work. In Texas, separate property is a possession that:

  • You owned before the marriage
  • You inherited either before or during the marriage
  • Was gifted to you either before or during the marriage

That means that a significant part of your retirement will be separate property. Before the asset division process, make sure you know what exactly was in your retirement account before you tied the knot. Knowing the number of shares of stocks and mutual funds as well as the dollar value of the accounts will help you. 

Remember, it’s up to you and your attorney to prove what was your personal property before the marriage. That way, you won’t have to watch half of your assets accumulated prior to the marriage vanish. 

Trust me, you will need to prepare for this process. Make sure you start gathering evidence of your assets before the marriage. I wish I had. I dug through all my files and called all of my old jobs looking for statements. 

A good way to start is by finding all documentation that proves what was yours prior to the union. That way, you can protect your savings.

It’s important to get legal advice from a qualified attorney on the evidence you need for your case to prove your separate property.

Some Retirement Assets are Community Property

Unfortunately, there are some things that you won’t be able to keep for yourself. When a couple divorces, each spouse is entitled to a part of the retirement benefits that have accrued during their marriage as these are considered marital property. 

Texas state laws specify that retirement savings like IRAs, 401ks, and pensions you earned during the marriage are to be considered community property. Therefore, it’s essential to understand that all of the cash contributions you made and gains to the account during the marriage are up for grabs. I made sure that I was not the only one putting money into accounts when I was married. That really helped me protect my retirement during the divorce.

You may even want to draw up a premarital agreement with your spouse that will include details of how assets will be divided between you and your spouse in the event of a spouse. You can also include conditions that protect you such as ensuring you’re not the only one putting money into accounts. Consult an attorney to get an understanding of your options to protect your assets.

Contact Us For A No-Cost Case Review

Divorce can put you in a difficult financial situation. Retirement assets are not the only type of assets that the court will split in a divorce. You might lose real estate, a family business, insurance policies, and other personal property that you worked hard to accumulate. A good lawyer will protect your rights and ensure you get your fair share of the assets you’ve worked so hard for.

Let the experts at Sean Lynch help you prepare for your divorce case. They have decades of experience in family law as divorce attorneys. They offer consultations. Contact them today for a no-cost case review and legal advice. And if you know someone who could use their help, share this post with them.

Who Gets the Cat? Texas Pet Custody Disputes

Posted on | by neal | Leave a Comment on Who Gets the Cat? Texas Pet Custody Disputes
Reading Time: 4 minutes

Animal lovers see their pets as their children. For many, dogs and cats are part of the family — our fuzzy friends may share our bed, be a part of family photos, and even enjoy birthday celebrations. When a pet-loving couple breaks up, they view these four-legged family members the same way most people feel about their children. Accordingly, questions about pet custody disputes and related issues can become hotly contested in a divorce proceeding. Unfortunately, Texas law doesn’t see animals as lovingly as fur- moms and -dads. There is no pet visitation in Texas law, so you need to establish ownership or face potential heartache.

Pets can be caught in the middle during separation and divorce. Texas law treats our pets as property though we often regard them as our children.
Pets are often viewed as important members of the family.

In Texas Pet Custody Disputes, Animals Are Considered Property

All the stuff that a couple acquires while they’re married is called community property as defined by Texas law. In the case of a Texas divorce, that goes for pets as well. It doesn’t matter how much you love him. A family court judge will treat Fluffy the same as a table and chair set or any other personal property. Under Texas community property law, property will generally be distributed in a 50/50 split unless the couple has a prenuptial agreement. It’s clearly not possible to divide an animal in half, so the courts have to determine which one of the couple to award legal custody to.

You could, however, work towards shared custody of your pet animal as part of your custody agreement with your ex. The courts will approve it as part of the divorce order. It’s only possible because Texas law classifies pets as personal property. This is not like child custody cases where the courts have the final say on the arrangement they deem to be in the best interest of the child.

You can avoid the pet custody dispute if you bought or adopted the animal before you tied the knot. If you can prove this to a judge, then the pet will be considered the separate property of the original owner. An attorney can advise you on how to build your case.

Factors That Judges Look At For Custody

Ultimately, the judge will determine if the pet is a community or separate property during property division in a divorce. If the court finds that the pet is community property, the court will look into how best to assign the pet to a guardian and determine who gets ownership in the final divorce order. Some factors that a judge will consider are: 

  • Which party has been the pet’s primary caretaker?
  • Has either party abused the pet?
  • Who has a more pet-friendly schedule?
  • Which party can take better care of the pets in the future?
  • How will the children be affected by this decision?

Courts do not have to consider the best interest of your pets when considering pet custody. Bear in mind, judges are reasonable people – and often pet owners themselves. If there are two pets, the judge will often assign one to each spouse. If the kids have a close relationship with the dog, in many cases the parent who has primary child custody will most likely keep Fido. They recognize that Fido isn’t just physical property like a house.

Help Me Prove The Pet Is Mine

Some couples establish a prenuptial agreement before they are wed. This is a great place to designate your pet as your property. In the event of a divorce, a prenuptial agreement will make it easy for the judge to award you legal ownership so your beloved fuzzy can stay with you.

If you do not have a prenuptial agreement, don’t worry. There are still some ways to help you get legal custody of your loyal companion. You would need to provide some sort of evidence that shows you will keep your friend for a long time to come. Here are some proven factors the courts will use to determine which spouse should get ownership of the pets.

Five steps that show who the responsible owner should be in court.

Care Giver Evidence

A statement from your vet testifying that you are the one that tends to the  medical needs of the animal

Collect Pet Expense Receipts

Any receipts that you may have from groomers, pet supply stores, or trainers that show that you have been paying for the furbaby’s care

Prove you are the responsible pet owner

Statements from dog park visitors, friends, or neighbors willing to attest to your devotion

Gather Licence Expenses

A city pet license with your signature or copy of the receipt under your name

Document Who Adopted the Pet

The official adoption application that you filled out and signed

Your lawyer would be able to advise you on the information you may have to gather for your dispute case to show that you should be the one to get custody. They can also tell you about how Texas state law would consider the issue of legal custody disputes and any related issues.

There Is No Pet Visitation In Texas

Sadly, there is no legal visitation for pets in Texas. Consequently, if you are not awarded pet custody in the divorce, then you may be stuck with the heartache. As one of our clients lamented, “I didn’t find out about the passing of my beloved cat Eros until I saw a post about him on social media.”. Remember, it is best to document ownership. Also, save those receipts and have a list of witnesses ready. You may need them in case the unthinkable happens.

In some states, there have been cases where the courts created a visitation schedule between former spouses who had disputes over custody of their dogs. Other former spouses have spent large sums of legal funds to fight a court battle to settle the custody dispute. Some state courts have even ordered maintenance payments for dogs or cats, or ordered their removal from unsafe environments. In 2017, Alaska was the first state to pass a law that required the court to ensure that the pet’s best interests would be considered in a custody dispute.

However, while courts in some states are starting to look at more comprehensive custody arrangements that treat an animal more like children, Texas has not formally taken steps to recognize a dog or cat differently from personal property in divorce and property division law. This could change in the future.

Contact Us For A No-Cost Consultation

If divorce is on your horizon and your pets will be an issue, contact a Texas family law attorney as soon as possible. Custody laws for animals are still changing. A qualified lawyer who is well-versed in pet custody laws can help to provide you with advice on your pet custody case. At Sean Lynch, we have decades of experience in these matters. Contact us today! Let us know what you think with a comment below.

In The Black During Grey Divorce

Posted on | by neal | Leave a Comment on In The Black During Grey Divorce
Reading Time: 6 minutes
Senior divorce can be particularly difficult for property division.
Grey divorce can be particularly difficult for seniors seeking an equitable division of assets.

All over the United States, the divorce rate among seniors has been skyrocketing over the past 20 years. This phenomenon, colloquially known as grey divorce, presents a set of unique challenges. This is because older couples often amass a significant amount of assets during their marriages. Dividing property during a grey divorce can be especially challenging. 

A Bowling Green State University study found that older couples who divorced often see their household wealth decrease by half. Older women who get divorced experience a financial decline that is nine times greater than married women. 

Since people who divorce at age 50 or older are near retirement age, they do not have as much time to save for their twilight years. The retirement and 401(k) accounts that they have built during the marriage may be subject to division in their divorces as community property. The spouse who loses half of his or her retirement account balance might not have enough time to rebuild any savings.

Older adults who are thinking about getting divorced might want to talk to financial advisors and family law attorneys before they file their petitions. A family law attorney can work with the financial advisor in an effort to help the client to minimize the negative financial consequences of the separation. Furthermore, legal counsel might negotiate with the client’s estranged spouse to try to secure a property division agreement that protects the client’s financial interests and the ability to retire.

What Causes Gray Divorce Later In Life?

The term was first coined in 2004 by AARP. Some researchers believe the cultural values held by baby boomers, longer life expectancies, and the increasing financial independence of women are causes of the increasing trend in gray divorce. The social stigma of divorce has also decreased over the years. Here are some reasons unique to a gray divorce.

Financial Reasons

Some married couples might hold off on getting a divorce until they become more financially independent later in life, even if one spouse or both people were already unhappy in the marriage. In the past, women might not have been able to afford a divorce and support the children. Many women now are increasingly independent especially later in life.

There could be a partner who regularly overspends or mismanages the funds. Sometimes a partner who is the breadwinner makes all the financial decisions without considering the opinions of their partner.

Remarriage

Gray divorce is more common in remarried couples even though the divorce rate for marriages that have lasted at least 40 years is the lowest. The divorce rate of people over 50 who were remarried is 2.5 times more than those on their first marriage.

Empty Nest Syndrome

After their adult children have left the home, many couples feel that there is no further reason to stay together. Many people have lost the spark they felt where they were first married.

Improved Life Expectancy

One reason for the increasing divorce rates is that many older people may believe they have plenty of time to discover happiness on their own. Some also believe they will find someone else even if they get divorced after the age of 50. People expect to live longer, so they might want to have a new life after their marriage ends and change the way they live. Previously, many older couples might have thought there was little point in getting a divorce when they did not expect to live much longer.

Retirement

When both or one spouse retires, there can be a significant lifestyle change. The couple spends more time together which can cause friction in some cases. Many long term marriages fall apart because couples find that they don’t enjoy spending time together. Their interests or the way they spend their free time might not be compatible.

What Are The Main Issues In Gray Divorce After A Long Term Marriage?

Given that gray divorce can take place after couples have been married for many years, the usual issues of property division can have different implications. Here are some of the complex issues that come with a divorce after a long-term marriage.

Property Division

If you have been married for a long time, you or your ex might have accumulated a substantial amount of assets like bank accounts, property, or retirement savings that now has to be split between both of you. The majority of your assets may be community property. One of the most important assets in property division is retirement accounts. It can be difficult for you to recover financially due to your age and your retirement lifestyle may be affected.

Texas is one of the nine states that follow the “community property” principle in property division. However, the judge has the right to make changes to the 50/50 division of property depending on what he or she feels is just and equitable. For example, a spouse who has significant health issues or very low employment prospects after the end of the marriage can often be awarded more property in a 60/40 or even a 70/30 split. If both of you are already retired and living off fixed benefits, it’s highly likely that there will be a 50/50 split.

A couple will need to divide the family home as well even though they may have an emotional attachment to it. Some couples opt to sell the house and split the money. Others may agree to have one spouse keep the house. In exchange, the other spouse may receive other assets. However, you will need to consider the cost of maintaining the house. If it is too expensive, you could end up using retirement savings to maintain the house.

Alimony

There is a high chance that alimony will be awarded for the rest of your life after a long-term marriage has ended. It is unlikely that the financially dependent spouse could start a new career and work up to the lifestyle they enjoyed before the divorce later in life. If you were the one supporting the family, you may worry about continuing alimony payments after you retire.

Factors that determine alimony include the income that each person makes, health, earning potential, and education.

The calculation of compensation can also become complicated for an older person. They might receive bonuses and stock options along with base compensation. The court will need to consider these to decide the amount of alimony to award after a grey divorce.

Social Security

The financially dependent spouse may be able to claim Social Security benefits based on the employment record of the other spouse. You must be at least 62 years old and not be married after your divorce. Your marriage must have lasted more than 10 years. You must also be entitled to less Social Security benefits than your spouse is. You may receive survivor benefits if your ex-spouse passes and you were married for at least 10 years.

If your marriage ended at least two years ago, you do not have to wait for your ex to claim benefits.

Insurance

If you were on your ex’s health insurance, you may need to start paying for your own health insurance coverage after a divorce. This can cost a substantial amount of money at your age. If you are at least 65 years old, you may qualify for Medicare if you can claim Social Security benefits based on your ex’s employment record.

In Texas, you will not receive your ex’s life insurance payout after divorce, including after a grey divorce. This applies even if you are still the designated beneficiary on the insurance plan. Exceptions apply if your ex designated you as a beneficiary after the divorce.

Long Term Care

You may now need to plan how to manage the costs of long term care as you get older. This is important if you were financially dependent on your ex. In some cases, you might have lost a substantial amount of your assets during the divorce. This can include the costs of staying in a nursing home or assisted living facility.

Financial Support For Children

Both of you might have agreed to provide financial support to your adult children for things like their education. You may need to ensure that you can continue to meet your obligations after a divorce. In many gray divorces, former couples also want to make sure that the children will inherit their estate after death.

Estate Planning

You may need to make sure that your children will inherit your estate if you pass away at any time during or after the divorce. If you pass away during the divorce, your spouse may inherit everything you have.

You might also want to change who has the power of attorney. This can determine who can make decisions for you during incapacitation. If you get married again, you will also have to consider how to manage the property of the new relationship. You need to determine how to protect property from your first marriage for your children to inherit.

The issues that come with gray divorces later in life are complex. It’s important to consult an experienced attorney to protect your interests. Being well-prepared can significantly improve the quality of your life after grey divorce. Consult the award-winning experts at Sean Lynch who have decades of experience in family law.

Contact us today for a no-cost case review.

How Property Division Affects Business Owners

Posted on | by neal | Leave a Comment on How Property Division Affects Business Owners
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Divorced man and woman handling business and property division paperwork with their lawyer.
Property division can be complex, especially when handling a family owned business.

When a couple decides to move forward with a divorce, they will have to divide marital assets. For some Texas couples, this means figuring out what to do with a family-owned business. The process of dividing property in a divorce process can be complex. This is especially when there is a successful business at stake. When you know what to expect and how divorce property division can affect business owners, you can develop a strategy that will protect your long-term interests. 

Is A Business Considered Marital Property?

Texas courts consider a business that was started during the marriage or had marital funds invested as marital property.

If a spouse started the company before the marriage, the business may be considered separate property or non-marital property. This also applies if you started the business with funds that courts consider separate property such as inherited funds.

However, if you used marital assets to grow the business, for example by making financial contributions from marital funds that caused an increase in the value of the business, the legal issue becomes even more complicated. If both spouses contributed to the value of the business during the marriage, that can affect how the property is defined in a divorce. The business may be considered as marital property.

How Is A Business Divided In A Divorce?

Many couples find that the best way forward to work on a settlement agreement out of court. When working on a settlement, it is prudent to think about the long-term implications and potential tax consequences. Separating business and personal assets is a uniquely complicated process. This is especially when the business is the primary source of income for both parties. The court would require you to get a valuation of the company. 

Some issues that spouses need to consider include the following:

  • Are both spouses or only one spouse involved in operations?
  • Is it in the spouses’ interest to keep the business running after a divorce?
  • Will both spouses still need income from the company after a divorce?
  • Is there any premarital agreement that addresses the business in a divorce?
  • Do other parties have ownership?
  • Is there a legal agreement where other owners have the right to buy an ownership interest before a spouse can claim it in divorce?

The three main outcomes are for spouses to continue sharing ownership, one spouse to take ownership while compensating the other, or to sell the business and split the proceeds.

While this isn’t a popular way to handle a business during a divorce, you and your spouse could continue running operations together. The court will likely award a 50% business interest to each spouse.

What If Spouses Do Not Want To Co-Own Businesses?

If the couple can no longer continue to run operations together, one of the options is for one party to attempt to buy out the other party, especially in a small business. The court typically does not want to derail the growth of businesses by forcing the owners to split the business assets.

Buyout Or Promissory Note

The law does not treat the act of buying out a spouse due to divorce as a sale for tax purposes for the selling spouse. However, there could be tax implications for selling any part of the business interest to another party later on.

If you can’t make a lump-sum payment to buy out your spouse, you may reach an agreement through negotiations on spousal support, promissory notes or other types of arrangements. The key to reaching a satisfactory agreement is to think about what will work well and protect overall interests in the long-term. This includes setting aside temporary emotions to consider what makes the most sense.

For a small business, the court may also have the spouse who received the business assets to make payments of income equivalent to the amount of their community interest to the other spouse over time. The spouse would pay tax only on the interest received.

If you and your spouse are corporation business owners, one spouse may get ownership while selling the value of the stock owned by the other spouse.

Many spouses even opt to sell and divide the proceeds although it can take time to find a buyer.

When a Texas business owner goes through a divorce, he or she may want to seek help from an attorney. Property division can affect business owners significantly which makes it a difficult matter. However, it is possible to secure terms that allow for a strong and stable financial future. A business owner considering options may want to have their attorney evaluate his or her case. 

Valuation

Business owners will usually engage a professional appraiser to determine business valuation. The three generally accepted valuation methods are:

  • Market approach where valuers compare the business to another similar business sold recently
  • Income approach based on expected future income and cash flow
  • Asset approach based on assets and liabilities

As part of a divorce process, the judge will have to classify business goodwill into personal goodwill and enterprise goodwill. Personal goodwill is associated with the person running the business. One example is if one of the business owners has a strong reputation that drives a significant part of the business. The judge could deem there to be significant personal goodwill. The court will not split the value of personal goodwill.

Enterprise goodwill is associated with the company. The judge will split its value between the spouses.

Is My Wife Or Husband Entitled To Half My Business If We Divorce?

Your non-owner spouse may take half the value of your business earned during the marriage. Texas is a community property state. During divorce, there is an equitable distribution of community property earned by either spouse while you are married. You can make arguments for an unequal split. Even if you started your business before you got married, your spouse could claim the community property portion of your business.

If you run a small business with few assets or little revenue, you would most likely get the business while paying your spouse a share of the value.

Property division can significantly affect business owners. However, an experienced attorney or law firm can protect your rights and protect the business you’ve worked hard to build. Let the experts at Sean Lynch help you prepare your legal case. We have decades of experience in Texas state family law.

Contact us today for a no-cost case review.