In a community property state, such as Texas, all marital assets are split 50/50 at the time of the divorce. While many people think they understand what this means, most don't consider some very important aspects of marital law that can affect their retirement in a potentially major way.
Texas couples who are ending their marriages might be concerned about many aspects of their finances and property division including whether to keep or sell the family home. An impending divorce might feel especially stressful from a financial standpoint for a person who has traditionally not dealt much with the family finances and who is approaching retirement.
From 1990 to 2014, the number of people 50 years of age and older seeking a divorce doubled, according to a study done by Bowling Green University. This goes against the general trend that has seen divorce rates either stay where they are or go down. However, the fact that so many older people are getting divorced has led to discussions about a new type of mortgage product.
While a divorce may formally end a marriage, it doesn't absolve an individual's liability when it comes to joint debts such as a mortgage. The only way for people to untangle themselves from a mortgage is to remove themselves from the loan. This can only happen if the loan is refinanced or the house is sold and the mortgage paid in full.
This is a question that our firm gets a lot, which is a good thing. Divorce is easier on everyone involved when the parties can work together and respect each other. However, it's still important to work with an experienced divorce lawyer in order to protect your rights and future.
You don't have to earn an enormous amount of money for property division to become complicated in a divorce, but when complex assets are involved, the risk of an unfair settlement may be higher.
People in Texas who are getting a divorce might think about hiring an attorney, but it may not occur to them to speak to a financial planner as well. From stay-at-home spouses who have not dealt much with family finances to the spouse who manages the money, most people may benefit from a financial adviser's expertise.
The process of divorce can be a very emotional time for Texas couples, and one thing that might add stress to those involved is how to deal with real estate properties. This can get even more complicated if the spouses do not know or understand the tax implications related to the different scenarios regarding real estate.
When someone decides to end their marriage, their finances are likely to change dramatically. People will often no longer be able to rely on joint income to pay bills, and assets will need to be divided. To help someone reduce their risks of financial problems following a divorce, it can be beneficial for people to understand their finances and determine their date of separation.
When dividing assets as part of the divorce process, it is important to do so properly to avoid costly tax consequences. For instance, it may be a good idea to have assets inside of a 401(k) plan rolled over from one spouse's account to the other. This is a non-taxable event and may be the easier way to transfer the money. If the spouse receiving the money wants to take it as cash, he or she could be liable for income tax and an early withdrawal penalty.