Divorce among older couples is becoming more common in Texas and across the U.S. In fact, while divorce rates have stabilized for all other age groups, it has doubled over the last few decades for people ages 50 and over. Unfortunately, this phenomenon, known as gray divorce, can wreak havoc on retirement plans if assets are divided up incorrectly.
Texas residents who inherited individual retirement accounts could possibly lose funds when it comes to property division in a divorce. New tax laws, which change the rules for awarding alimony, are silent on this as is the Internal Revenue Service, nor have there been any court rulings. Some people are using inherited IRA funds to offset the lost alimony deduction under the new tax laws.
When couples in Texas plan to divorce, the financial repercussions of the end of the marriage can often be equally or even more profound than the emotional complications. The division of marital property can lead to significant changes in how both former partners live their lives. It is important to understand how property division works in a divorce, especially because Texas is only one of nine states across the country that uses a community property system to divide assets after a split.
When Texas parents decide to divorce, some of the most challenging aspects to deal with can include handling the division of property, including the marital home, as well as child custody issues. Many divorcing parents want to do everything they can to help reduce the emotional burden on their children. Not only is the marital home often one of the largest assets handled in the divorce, but it can also be one of the most emotionally meaningful items for the family, especially children.
One of the first issues that Texas couples going through a marital split must face involves where to live during and after the divorce. Unfortunately, the timing usually coincides with the most emotionally turbulent period of marital dissolution. Judgment can be impaired by emotions and other distractions accompanying such a major life change. Divorcees must weigh logistical, emotional, and financial implications in order to make the best arrangements for themselves and their children.
Texas residents may feel like the best option is to keep a marital home after a marriage ends. However, this may not be the best choice from a financial perspective. For many, it may be difficult to pay a mortgage, property taxes and other expenses related to a home on a single income. Those who manage to pay those bills may not have anything left over to save or for emergencies.
Some couples in Texas who get a divorce will have a home they need to sell. This can be an emotionally difficult experience, but there are things couples can do to smooth the process. They should begin by discussing their goals with the agent, but following this initial meeting, one spouse should be chosen to be the main contact person for the agent to avoid confusion. Spouses should also leave the agent out of any personal conflict.
The family home is often the largest marital asset, especially for younger couples. If they decide to divorce, Texas spouses have to decide what to do with the house. There are advantages and disadvantages of each option, so it's important to carefully consider them and speak with an attorney or financial professional prior to entering into a settlement agreement. Some of the paths available include one spouse continuing to live in the house or selling the property to divide the profits between both spouses.
Texas couples who are getting a divorce must deal with property division in most cases. This may include shutting down joint accounts such as credit cards and shared bank accounts. Regardless of who created the credit card debt, both people will be considered responsible for it by creditors, and this debt will need to be paid off in order to close the account.
Divorce can be complicated by a variety of details. Texas couples who are ending their marriages are focused on major points of contention like child custody and division of assets and liabilities. Things like car insurance are often overlooked, despite their importance. Generally, there are a few rules that apply to the process of separating car insurance policies. One former spouse, for example, cannot remove the other from the policy without the latter's consent.