Divorce can pose a unique set of concerns for spouses near retirement age in Texas. Since retirement can be associated with a reduction in income, even those with extensive savings may have particular challenges during a divorce. This is a major problem for many seniors as the divorce rate for couples over 50 has escalated continually since 1987. Indeed, one out of every four couples makes the decision to divorce after the age of 50.
A divorce in Texas often involves untying the financial knots that bind spouses. While the divorce decree should determine who pays what debts, sometimes people need to take action on jointly held credit cards prior to the completion of the divorce process.
Texas couples who get divorced will find that their lives may change in more ways than one, particularly when it comes to their finances. This is especially true for people who get divorced later in life and near their retirement age, when they may not have the opportunity to save what they need to have a comfortable retirement. However, there are some steps they can take to have a secure financial future.
Texas residents and others who are going through a divorce may find that it is an expensive process. Among the most common costs are hiring a lawyer and losing potentially valuable assets when marital property is divided. Furthermore, it may be more difficult for someone to live on a single income after leaving a relationship. While hiring an attorney may be expensive, doing so may help protect an individual's rights and stop a spouse from possibly releasing personal information.
When couples in Texas divorce, finances are often a significant concern. Even if the split is amicable, dividing assets such as real estate, savings, investments and retirement accounts, can be a daunting task.
In a community property state like Texas, during a divorce, property acquired after marriage is usually considered shared property and will be divided 50/50. A woman who was getting a divorce in California, also a community property state, was concerned about her 401(k) and her home since her husband said he wanted half the 401(k) and the home. For about a decade, the woman had been the main breadwinner.
Family law judges in community property states like Texas will generally divide marital assets equally in divorce cases even if the couples involved have only been married for a short time. This sometimes seems unreasonable or unfair, and it is not uncommon for spouses in these states to begin moving or hiding assets prior to filing for divorce. Spouses may be wise to prepare themselves for the possibility of divorce papers when their husbands or wives start to behave elusively or covertly, but there are steps that they can take to protect themselves and avoid drawn out legal battles.
Taxes are one of many things that will change for people in Texas who get a divorce. The switch from filing as married to filing as single or as head of household, if there are dependents, and the move to a new tax bracket happens in whatever calendar year the divorce occurs. Therefore, if an annulment, separation or divorce is finalized on or before the final day of 2017, when the person files taxes for that year, the filing status will have changed. An annulment introduces the additional complexity of needing to amend previous years' tax returns to indicate that both people were not married at the time.
In a divorce, marital property division is generally negotiated in a manner that is equitable to both sides. However, not all assets are equally valuable. For instance, Texas residents may feel like keeping a marital home is worthwhile because it means not having to move. However, it also means retaining responsibility for maintenance and upkeep as well as other costs related to owning a home.
Federal employees are likely to have a Thrift Savings Plan, which replaces the common 401(k) used in the private sector. Like other retirement plans, a TSP can be affected by the asset division process of a Texas divorce. It is important for those considering a divorce to understand how the law may impact their money and finances.