Category: Divorce

Category: Divorce

Answers to your common divorce questions in Texas.

by Alfredo Ramos
Business Owner, Divorce
Featured Image

A common misperception about the divorce process is that it is an expensive and lengthy process. While this may be the case for a contentious divorce, uncontested divorce, that is, a divorce by agreement in Texas, can be quick and relatively painless.

The Process of an Uncontested Divorce by Agreement

To begin the uncontested divorce process, a party must first file an Original Petition for Divorce and pay the required fees associated with the filing. This document is what initiates the divorce process. It results in the divorce action being assigned a specific court and cause number, under which all subsequent documents or pleadings will be filed. All Original Petitions for Divorce include similar information: the name of the parties, the dates of marriage and separation, information relating to any children born during the marriage, specific requests relating to child issues, division of property and any other relief requested.

Mandatory Waiting Period

Texas has a mandatory waiting period from the time an Original Petition for Divorce is filed to when the divorce can be granted by a court. So even if both parties are in total agreement on all divorce issues (including property and children), they must wait sixty days from the date the Original Petition is filed. This mandatory waiting period can be waived in very specific instances, but the majority of cases must wait until the sixty-first day after filing to finalize an agreed divorce.

Divorce Paperwork

In a contested divorce, the party who files for divorce must have the other party served with the divorce paperwork (the Original Petition for Divorce and any notices of hearings) by a private process server or law enforcement officer. An uncontested divorce does away with this service requirement. The responding party only needs to file a document called a “Waiver of Service.” This document includes several key assertions that the court requires.

Requirements of a Waiver of Service

  • Acknowledges receipt of the Original Petition for Divorce
  • Includes specific provisions protecting interests in children and property
  • Provides the court with the party’s contact information (including physical address, phone number, and email address)
  • Is a notarized document

The purpose of this document is to show the court that the responding party is aware a divorce suit is pending, that the responding party has received and reviewed the Original Petition for Divorce, that party does not want to be personally served, they are providing the court with their contact information and directs a court whether the divorce can be finalized without the responding party being personally present. The waiver must be notarized to prove to the court the responding party personally signed it after verifying their identity.

The next document that will need to be drafted and signed by the parties is the Final Decree of Divorce. While the Original Petition for Divorce requests certain relief, the Final Decree of Divorce is the document that the judge will sign and includes all agreements reached in the divorce. This can include the following:

  • Property – Any and all property acquired during the marriage will be divided in the Final Decree of Divorce. This includes real property, personal property, and furnishings, jewelry, retirement accounts, cash on hand, etc. The items will be listed and awarded to the spouses in the decree. The decree can also include language about the sale of property or how proceeds/funds will be divided as part of the divorce. Any property that a spouse owned prior to marriage will be confirmed as that spouse’s separate property.

    Since Texas is a community property state, even the shortest of marriages accrue community property. Almost all judges require that Final Divorce Decrees divide assets and debts by specifically awarding those items, even if the parties kept their accounts separate during the marriage and nothing really needs to be divided.

  • Children – The Final Decree of Divorce will need to address certain provisions relating to children of the marriage. This will include rights and duties, access and possession, child support, medical support, and other miscellaneous provisions such as passports or electronic communication.

    Some amicable parties may be reluctant to include specific child provisions because they want to co-parent by agreement after divorce rather than following specific schedules or rules. While the Texas family courts applaud a couple’s desire to informally co-parent, a Final Decree of Divorce must include a specific possession schedule and language about child support and medical support. The parties are free to disregard the specific provisions and co-parent as they see fit, but the Decree must include certain language for the divorce to be finalized.

  • Other Agreements – The Final Decree of Divorce may have other miscellaneous provisions, such as injunctions, post-divorce spousal support, change of name, tax language or other items. Each Final Decree of Divorce is specifically drafted for a divorcing couple so no two Final Decrees are the same.

Once the Final Decree of Divorce has been drafted and signed off on by the parties, it will need to be filed with the assigned court. This document does not need to be notarized by both spouses who will need to sign it.

Additional Documents

There are other documents that may need to be drafted and filed depending on the case. These may include:

  • Qualified Domestic Relations Order, which divides retirement accounts
  • Special Warranty Deed and Deed of Trust to Secure Assumption, which address title and ownership of real property that is awarded to a spouse in the divorce
  • Child Support Order and Medical Support Order, which are signed by the judge and filed with the state to effectuate payment of child support and medical support coverage
  • BVS Form, which includes basic identifying details about the case and is filed with the Bureau of Vital Statistics

There may be other forms that are required, so speak with a licensed Texas attorney to confirm what documents are needed for your specific case.

The Prove Up

Once all the appropriate documents have been filed with the Court, the filing party will need to appear in front of the assigned judge to do what is called a prove up. This is a short testimony to the court affirming the provisions of the Final Decree of Divorce, asserting that no one is pregnant, all children and property of the marriage have been properly addressed within the decree, and that a divorce is requested. The party may also testify about a requested name change being done to revert to a maiden name (rather than for nefarious purposes such as avoidance of criminal prosecution).

The prove up is short and painless. Most courts only require one party appear, but double check with your legal team as different courts have different requirements. Once the judge has heard the prove up testimony, they will approve the agreements, grant the divorce and sign the Final Decree of Divorce.

When the Divorce Goes into Effect

After the judge has signed the decree, a certified copy may be obtained for purposes of changing a party’s name or effectuating change in beneficiaries or other property concerns. The divorce will be effective upon the date of the judge signing the Final Decree. It is important to remember that there is a mandatory thirty day period from the date the divorce is granted until a new marriage may be entered into, so if you are hoping to enter into a new marriage while your divorce is pending, make sure to discuss that with your legal counsel.

Start with a Call to a Family Law Attorney

All of the above can be done quickly and efficiently if the parties are in total agreement on divorce issues. It can be done even more quickly and efficiently if represented by a competent Texas family law attorney. The legal team at the Ramos Law Group, PLLC is well-versed in uncontested divorces and has the knowledge and experience to guide a Texas resident through the uncontested divorce process.

Contact our team today to discuss handling your uncontested divorce and answer any questions about the process you may have.

by Alfredo Ramos
Divorce
Featured Image

You are getting ready to go through the divorce process, and you already feel a range of emotions. On the one hand, you feel a sense of relief. On the other hand, you’re worried about how the divorce process will impact your finances.

Here, we’ve prepared insight on divorce and taxes: How exactly will your divorce impact your tax situation in the state of Texas?

Here’s a rundown on how your marital breakup will affect you tax-wise, and what you need to do to make sure that the tax filing process is as smooth as possible following your divorce.

Taxes What Is Your Filing Status When You Get a Divorce and Then File Taxes?

This is one of the most common divorce tax questions that people ask once their “I do” turns into “I don’t.” Once you have finalized your divorce, you can no longer file your taxes with the federal government using the “married filing jointly” and “married filing separately” statuses. Instead, you’ll have to choose “head of household” or “single” based on your situation.

If you divorce and file taxes as the head of your household, this provides major benefits versus filing as a single individual. For instance, you can take a larger standard deduction, and you’ll also be eligible for some helpful tax credits. In addition, your tax rate will be lower. However, to file as the head of your household, you must meet the following criteria:

  • You must have an individual—or “qualifying person”—live with you half of the year; alternatively, this person must meet other requirements, like being absent temporarily for certain reasons. Examples of such qualifying individuals may include children who are going to school, parents who don’t necessarily reside with you but are receiving support from you, and married children whom you are claiming as dependents.
  • You cover half of the cost of maintaining a household.
  • You are not legally married as of the last day of the year that you’re filing your tax return for.

Note that when you are divorced and then subsequently file taxes, you and the other party cannot both choose to file as the head of the household, as you’re sharing in the responsibilities of caring for and supporting your shared children. Only if you are the parent who has primary physical custody of the children can you treat your children as qualifying individuals and enjoy the status of being the head of the household.

Also, let’s say that you and the other parent are splitting your time with the children equally. If your adjusted gross income happens to be higher, you have the right to claim the children as qualifying individuals.

How Do You Handle Child Support & Alimony When You Get a Divorce and Then File Your Taxes?

This is another one of the most frequently asked divorce tax questions in Texas. To answer this question, you’ll first need to take a look at your divorce decree. It may be written within the decree that you’ve agreed to make spousal maintenance or child support payments to your ex, or maybe you’ll be the one receiving these payments.

If you finalize your divorce in 2019 or later and then file taxes, and if you’re the one paying spousal maintenance, you can no longer deduct your spousal maintenance thanks to the United States’ most recent tax reform. However, if you’re receiving spousal maintenance, the good news is that you aren’t required to include these payments as part of the income you’re being taxed on.

When it comes to dealing with child support after you divorce and file your taxes, child support has never been treated as tax deductible for the person paying it, and the same remains true under the recent tax reform.

Claiming Dependents after You Get a Divorce and File Your Taxes

Yet another one of the most commonly posed divorce tax questions is who can claim dependents during tax filing season.

The truth is, only one part can claim the children as dependents, and as mentioned earlier, this is usually the parent who is given custody. However, if you have custody of the children you share with your ex-spouse, you have the option of giving your ex the right to claim your children as dependents instead. This is possible by completing and signing Form 8332, which the other party must file with his or her taxes.

Who claims the children as his or her dependents when you divorce and file taxes is an important question because, as mentioned earlier, you get to file as the head of your household if you claim your children as dependents. Also, you can take advantage of various tax credits as well as other deductions when your children are your dependents. These include the following:

  • Child credit, worth $2,000 for each child
  • Earned income credit
  • Credit for dependent care and child care expenses
  • American opportunity credit for any qualified education expense

Protect Your Financial Best Interests When Divorcing and Filing Your Taxes Today!

When you decide to get a divorce and file your taxes, you may understandably be overwhelmed by what to do and thus having a number of divorce tax questions. After all, filing your taxes is complicated enough without adding a divorce filing to the mix. However, the experts at the Ramos Law Group can help you to make sure that your tax filing process is a smooth one following your divorce.

Get in touch with us today to learn more about what tax filing status would be appropriate in your situation. We’ll also show you how you should handle spousal maintenance, child support, and claiming children as dependents based on your unique circumstances in the state of Texas.

by Alfredo Ramos
Divorce
Featured Image

Divorce hurts. It can be damaging emotionally, psychologically, financially, and any number of other ways. As painful as the divorce process is, life will go on without your ex-spouse. Here at Ramos Law Group, we have prepared advice on steps you can take to ensure that you experience recovery from your divorce as quickly and easily as possible.

Here are a few tips for navigating the various stages of divorce recovery with confidence so that you are in the best position financially, physically, mentally, and emotionally long term.

Financial Divorce Recovery Tips

Your finances may understandably be one of your biggest areas of concern when it comes to recovering from your marital breakup. One of the most important steps you can take to protect your financial status post-divorce is to avoid living beyond your means.

To do this, you’ll first need to create a new budget based on your new household income following your divorce. Making the transition from a two-earner household to a one-earner household, where you are the sole breadwinner, can be quite a shock to your system. This is especially true if you’ve got legal fees, credit cards, a mortgage, and education expenses on top of your utilities and other regular expenses.

The sooner you create an accurate budget, the more quickly you can adopt new and responsible spending habits. And the better off you’ll be long term. After all, even though living within a budget may not necessarily feel fun and freeing per se, living beyond your budget will only bring you more stress and financial bondage down the road.

Look at Your Portfolio during Your Financial Divorce Recovery Process

In addition to revamping your budget as part of your stages of divorce recovery, it’s a good idea to also take a good look at your investment portfolio. That’s because you may need to update your portfolio and your asset allocation overall based on your post-divorce financial situation as well as your long-term monetary goals.

Remember that in addition to updating your investments during the divorce recovery process, you’ll need to adjust your portfolio if you end up switching careers, re-marrying, purchasing a new house, addressing a medical crisis, or entering retirement. A financial advisor can help you to make sure that your asset allocation is in alignment with your current time horizon, objectives, and risk tolerance.

Physical Divorce Recovery Tips

Taking care of your physical condition is another important step among the stages of divorce recovery. You can do this first by getting regular exercise. You don’t necessarily need to be a gym member, as simply going for a walk each day can be immensely beneficial to your health. You can also dance, do yoga, or go swimming if you prefer these forms of exercise.

Exercising is such an important part of the divorce recovery process because exercise helps the body to generate endorphins, feel-good chemicals in the brain. Exercise also boosts self-confidence, enhances your sleep, and decreases symptoms of depression, anxiety, and stress.

If possible, try to work out with a friend or family member who can serve as your accountability partner. With his or help, you may find yourself motivated to exercise rather than lounge around from one evening to the next.

Divorce Recovery Should Also Involve Improved Eating Habits

Working out time and time again won’t help you to stay healthy in the long run if you also don’t watch your eating habits following your divorce. The truth is, if you’re feeling sad about your divorce, it’s easy for you to either gain weight or lose weight depending on how you respond to stress.

For instance, if you tend to overeat when you’re feeling stressed, you may find yourself gaining 100 pounds in the aftermath of your divorce. Meanwhile, if stress typically takes away your appetite, you may lose 50 pounds.

As a general rule of thumb, try to eat three wholesome meals per day. Also, try to combine carbohydrates, protein, and fat. Doing this will help you to stabilize your blood sugar and thus prevent dips that can lead to unwanted cravings.

In addition, avoid consuming excessive amounts of alcohol or caffeine, salty foods, artificial ingredients, and sweets. The good news about eating healthier following your divorce is that it can affect your mood in a positive way. Like exercise, healthy foods can ease depression as well as calm anxiety. If you drink lots of water as well, this can further decrease your stress hormones.

Mental and Emotional Divorce Recovery Steps

Feeling grieved following divorce is normal, but you can take steps to protect yourself mentally and emotionally post-divorce as well.

For example, consider joining a support group, which can help you to more confidently navigate the divorce recovery process. Through this type of group, you can receive encouragement and education from other people who are also going through a divorce.

Counseling and psychotherapy and also help, as you can vent your emotions to a therapist who is trained to listen to you and to provide you with invaluable guidance regarding managing your stress, self-defeated thinking, and grief.

Protect Your Best Interests As You Go through the Divorce Recovery Process

Divorce is never an easy ordeal to get through financially, physically, or emotionally, even if you were married for a relatively short time. However, going through these stages of divorce recovery can help you to bounce back from your divorce as quickly as possible.

Get in touch with us at Ramos Law Group to find out more about how we can help you through the divorce recovery process. With our help, you can be well on your way to living your best life following even the most difficult of divorces.

by Alfredo Ramos
Divorce
Featured Image

Your divorce may not be avoidable, but that doesn’t mean it has to feel like a fight. There are ways to amicably end your marriage: a “no contest” divorce, officially known as an uncontested divorce.

Here’s a glimpse at what a no contest divorce in Texas involves and how you can take advantage of this process.

What Exactly Is a “No Contest” Divorce?

This type of divorce is possible when you and your future ex agree on every term of the divorce. It’s the opposite of a contested divorce, where you can’t agree on one or more issues related to the divorce.

The benefit of a no contest divorce in Texas is that it is generally less stressful and less costly than going to divorce trial. This is because instead of fighting over issues in court, and thus dragging out your divorce, you and your spouse can expedite the divorce process and possibly even pay lower filing fees.

These divorce proceedings also offer the benefit of involving fewer forms that have to be completed, which further makes them simpler to navigate.

“No Contest” Divorce Requirements

An uncontested divorce may sound great so far, but there is a catch: You have to qualify for one. Let’s take a look at the various requirements you must meet before you can pursue this type of divorce proceeding.

  • Both you and the other party must not have any children together who are under the age of 18.
  • You don’t have an unresolved bankruptcy case with your spouse.
  • Neither party is seeking spousal maintenance as part of the divorce proceeding.

divorcing couple illustration

Get Started with a “No Contest” Divorce

Let’s say you meet these criteria for completing an uncontested divorce. You’re off to a great start. Now, you need to meet just a few more requirements in Texas before you can officially begin the process of getting an uncontested divorce.

  • Both you and the other party must have lived in the Lone Star State for a minimum of six months.
  • You both have lived for three-plus months in the Texas county in which you’re filing for your “no contest” divorce
  • Both of you agree on every issue in the divorce, including property division, for example.

If you and the other party meet these requirements as well, then you’re an excellent candidate for an uncontested divorce in Texas. Get in touch with us at Ramos Law Group today, and let us walk you through the process. In no time, you can finalize your divorce and move on with your life.

by Alfredo Ramos
Business Owner, Divorce
Featured Image

Business Assets In Texas Divorce

The state of Texas is home to a multitude of businesses, both large and small. Businesses are the core of Texas’ great economy. But how does a Texas court handle a business asset should a marriage dissolve?

First – Is the business part of the community estate?

Texas is a community property state. Only property, including business assets or companies, that were accrued or created during the marriage are subject to a division by a Texas divorce court. If a company or business was created prior to the date of marriage then that asset the spouse’s separate property and is not subject to any sort of division during the divorce proceeding. If the date of creation/inception of the business asset is murky, the spouse claiming it was created prior to marriage will need to provide their legal team with any relevant documents that evidence its date of creation. The burden is on the spouse claiming an asset is separate property to prove to the court that it is in fact separate property.

Second – What type of business is it?

Small companies or sole partnerships with little revenue or business assets such as equipment are often easily dealt with in a divorce settlement. If a spouse owns a sole proprietorship with minimal tools or assets of value, then the business entity and its accounts almost always go to that spouse as there is little relative value to the non-involved spouse. If a company is profitable because of the ownership or face of the company, its “goodwill value” generally goes along with the owner and there may be minimal actual property value to the company itself.

Large Business or Corporation

If the contested asset is a large business or corporation with ample assets or corporate stock, then one spouse can be awarded the entity itself while the stock is sold for liquid assets to be awarded to the other party.  For a majority of companies in a contested divorce, it will be important to obtain a business valuation. Unless it’s a publicly held company, whose value is based on its stock, it can be difficult to ascertain what a company is worth. As business valuation will compare the company to other companies in a comparative market analysis or it will examine the company’s assets, debts, existing contracts and make a determination on the company’s worth. These valuations can help the parties or the court determine the value of the company for purposes of fairly dividing the entirety of the community estate.

Rules and Limitations

Certain companies, like a franchise restaurant or chain, have ownership rules and limitations, so the parties, their legal team, and the Texas family law court will need to keep that in mind. A professional company, like an accounting firm or a physician’s office, cannot be owned by a non-licensed professional. So, the type of company may determine what limitations, if any, would be in place relating to its division in a Texas divorce.

Third – What if the business is jointly owned or both spouses are involved?

This can make an already contentious divorce even more complicated. Often times it is impossible to split the business in a way that both sides can continue to profit. The Texas family law court system does not want to derail a company’s financial prosperity by butchering its business structure. In this situation, the presiding court will do its best to come to a reasonable property division without destroying a business by dividing it. This may be done be awarding the entirety of the business to one spouse will awarding all real property and retirement to the other spouse. This can also be accomplished by ordering the spouse who is awarded the business asset to pay the other spouse their community interest in the business via a structured payment schedule.

Profitable Businesses with Strong Valuations

If the business is profitable and has value (that is not specifically attached to one of the spouses like a CPA or medical professional) then it may be easiest for the business to be sold and the proceeds split between the parties. This helps the court to avoid determining which spouse “deserves” the company and is an easy way to fairly split the business proceeds.

Considering Joint Ownership

Some Texas businesses are run by amicable spouses that have no desire to change the business structure or award the entirety of a business asset to one spouse in the divorce. Can a divorced couple continue to jointly own an operate a business? The answer is yes, but typically only if the parties both expressly desire this and believe it will work in the long run. A Texas family court does not want to force parties who have no desire to remain married to one another to remain as business parties. If a party requests in their divorce pleadings that the business asset or entity be split, a Texas family court will likely do that. But if the parties are amicable and believe they can harmoniously continue to operate the community property asset, then a court may award each party a fifty percent ownership stake in the entity. Once the divorce is finalized, any subsequent business decisions, such as selling ownership share, would be handled like any other jointly-held business interest.

To learn how business assets are handled in a Texas Divorce, Contact Us Today!

As one can see from above, there are a multitude of ways that a Texas court can divide business assets in a divorce. Each case is unique and comes with its own complications, so it is important to meet with a licensed Texas attorney who has experience in valuing and dividing business assets during the divorce process. The team at the Ramos Law Group, PLLC has experience handling all sorts of business entities and assets and can review your circumstances and assist you in formulating a strategy.

by Alfredo Ramos
Business Owner, Divorce
Featured Image

Guide To Divorce In Texas

Today’s business owners are not the mom and pop type of yesterday. They must be business savvy, up on market trends and vigilant about their social media presence. A divorce can have a devastating effect on a thriving business if not handled correctly. A business owner contemplating a divorce in Texas should consider the following items before beginning the divorce process.

Community v. Separate Property

The first concern for any Texas business owner is to determine the characterization of any company. If the company was created or purchased prior to the date of marriage, or if it was inherited during the marriage, then it is considered separate property and is not subject to division during a Texas divorce. The spouse that owns that separate property must provide documentation evidencing that it was either inherited or created prior to the date of marriage, so a business owner will need to provide to their legal team documents evidencing the business’ date of inception.

If the company or business was created after the date of marriage, then it would be considered community property. This means that the entirety of the business (including assets, revolving contracts, bank accounts, equipment, etc) will need to be divided in the divorce.

There are circumstances where a business can be both community and separate property. For example, a person may have owned an interest in a business prior to marriage and after the marriage bought out a partner. This would result in a portion of the business clearly being one spouse’s separate property while the other ownership interest would be subject to a just and right division by the court.

Business Valuation

A major question for any business owner going through a Texas divorce is probably “what is my business worth?” If the company or business is part of the community estate, it is vital that an accurate

There are several methods of determining the value of a business entity. Any method or combination of methods may be used to calculate the value of a business entity. There is no required formula

  1. Fair Market Value – this is the value based on what a buyer would be willing to pay in cash to acquire the business.
  2. Book Value – this number is calculated by reviewing the finances and accounts of the business. This number is not always the most accurate as it only reviews a snapshot of the existing finances and does not account for growth.
  3. Comparative Market Analysis – this value is calculated in a similar manner to real estate comps. The business valuation expert will compare the business to similar types of businesses that have recently sold and estimate what the business in question will sell for.

As one can imagine, the above business valuation methods can have a range of different estimated values. This is why it is important to hire a knowledgeable business valuator who has experience in the market and type of business. If the value of the business is contested, both spouses may hire their own expert valuators and can present their dueling values at trial. The judge will then hear all the evidence and expert’s testimony and determine the value for purposes of property division.

Business Operation During the Divorce Process

A savvy business owner is going to want to make sure the day-to-day operations of the business entity are not negatively affected during the pendency of the divorce. Warring spouses can have a negative effect on the operations of a business, including mishandling of bank accounts and income, canceling accounts, harassing employees or other damaging actions. If the parties cannot mutually agree as to how the business runs and income is split during the divorce process, the court may need to issue some temporary orders. These can include injunctions prohibiting the harmful actions listed above, directions as to who handles the books and has access to the bank accounts. These agreements or orders from the court can keep the business running as usual until it is formally divided or awarded to one spouse.

Additional Concerns

There may be other specific business concerns that will need to be addressed. These can include:

  1. Are there additional owners to consider?
  2. Does the business have a buy-sell agreement in place that would prohibit a sale or awarding part of the business?
  3. How is the business structured? If an LLC, there could be procedural concerns with the articles of incorporation.
  4. Mixing business expenses with personal expenses. This could have an effect on the spouse’s income for child support calculation purposes.
  5. Is it a professional business such as a law firm or medical practice? Professionally-licensed businesses typically cannot be sold or awarded to an unlicensed spouse.

How a business entity is handled in a Texas divorce can be complicated and it is important for a business owner to make sure their divorce case is in the most capable hands. The Ramos Law Group, PLLC has handled a multitude of divorces involving business entities. The legal team has experience with business valuations, large corporations, small sole partnerships, and embittered spouses warring over the running of a business. Any Texas business owner contemplating a divorce should contact our firm to discuss strategy and long-term goals for the business.

by Ramos Law Group, PLLC
Divorce
Featured Image

Attorney Fees In A Divorce

A divorce can be a financially daunting undertaking, especially if one spouse does not want to pursue a divorce or it comes as a total shock. An often-contested component of any divorce is attorney fees and who is obligated to pay said fees.

Texas is a community property state, so any assets or debts accrued during the marriage are subject to a just and right division in a divorce. Texas does not have legal separation so the marriage lasts until the date a Final Decree of Divorce is signed and rendered. What this means is any attorney fees incurred throughout the divorce process are a community debt, even if the parties are separated and pursuing a divorce.

A Texas family law court will not order the party that filed for divorce to pay the non-filing spouse’s attorney fees as a punitive measure. Any Texas resident is entitled to file for divorce; forcing the filing party to pay the other spouse’s attorney fees as punishment is not typically an attainable goal. That is not to say obtaining attorney fees is unattainable, but it is not automatic.

Texas Considers Community Assets & Debts

The Texas family law court will consider all of the community assets and debts along with the financial needs and capabilities of the parties before awarding any attorney fees. If there is a disparity in income between the parties, for example if one spouse makes substantially more than the other or one spouse has remained at home and has no means of income, then the court would probably be more inclined to order the financially solvent spouse to pay a portion or all of the lesser financially inclined spouse’s fees. This can be done by an agreement, should the parties go to mediation, or by order of the court after a hearing on the issue of attorney fees.

Request Temporary Fees During Case

During the pendency of a divorce, a party can request temporary fees if they are unable to pay for legal representation and their spouse has the means and ability to pay. If a Motion for Interim Attorney Fees has been filed, the judge will review the existing attorney fees that have accumulated, the resources of each party (which can include cash on hand, spending power on credit cards, ability to borrow from family, retirement assets which can be borrowed against) and make a decision as to whether one party is obligated to pay for the other’s legal expenses. Often a judge will order a party to make a lump sum payment or a dollar for dollar contribution. For example, whatever the husband pays to his legal counsel he must pay to his wife’s counsel as well.

To help their counsel prepare for such a hearing, it is important for clients to provide current bank statements, credit card statements, an updated Financial Information Statement, paycheck stubs and any other financial statements that can help support the legal argument for attorney fees to be awarded (or defended against, if that is the case).

Attorney Fees Accounted For On Final

Attorney fees are also taken into account during the final property settlement discussions or litigation. As any fees accrued through the divorce process are considered a community debt, it’s important that parties and their attorneys present a detailed accounting of all fees incurred up to the date of mediation or litigation and a projection of the fees needed to finalize the divorce matter.

Attorney fees quite frequently represent a sizable part of the community’s debt at the time of divorce so both parties should be mindful in the existing attorney fee debt when dividing the remainder of the community estate’s debts and assets. The court will most certainly take attorney fees into account when deciding how to divide the estate in a just and right division.

Additional Considerations

Aside from financial need, another way a court could order that attorney’s fees be paid is if one party acts in bad faith. For example, if a party refuses to comply with the discovery process or refuses to schedule a court-required mediation, then the judge may feel such intentional difficulty may warrant attorney fees being ordered. This can be done as a result of a hearing or the judge may order it on his or her own motion.

Contact Ramos Law Group, PLLC Today.

The divorce process can be lengthy and expensive and it is important to have a legal team that can help you navigate the divorce process and help achieve your goals. If you are going through a divorce or believe that a divorce is your only option, please contact the attorneys at the Ramos Law Group, PLLC. The licensed Texas family law attorneys can discuss your case, your concerns about attorney fees in a divorce, and help strategize a course of action.

by Alfredo Ramos
Business Owner, CEO's or C-Suite Executives, Divorce, High Net Worth
Featured Image

Hidden Assets in a Texas Divorce

Whenever a person is going through a divorce, it is often their main goal to obtain the best property division possible. This can help the healing process and set that person up for success in the next chapter of their life. Unfortunately, many people find that while going through a Texas divorce, their spouse may have been hiding assets throughout their marriage or are attempting to hide assets now that a divorce is pending.

It is vital to find an experienced family law attorney licensed in Texas who has a background in successfully finding hidden assets and getting the best property award for their client. The Ramos Law Group and its team of legal specialists are skilled at knowing what to look for and identifying hidden assets. What considerations are there when thinking about hidden assets in a Texas divorce?

First, a quick refresher on community property. As Texas is a community property state, any and all assets that were earned during the duration of the marriage are subject to a just and right division in a divorce. This does not include any items that are separate property, such as items owned prior to marriage or items received through a gift or inheritance. This article is assuming any “hidden assets” are community property and should be divided by a divorce court.

Discovery and Disclosures

There are a couple ways the parties are required to disclose assets in a divorce proceeding:

  1. Local Disclosures – For example, the Harris County family court system requires that parties disclose paychecks, tax returns, bank statements, and a sworn inventory and appraisement by a certain date. A sworn inventory and appraisement is a notarized/verified document that is supposed to contain an accounting of ALL property, including all assets and debts, with supporting documents showing current statements. Should the divorce matter go to trial, the trial judge will rely on the parties’ inventories when making a final property division.
  1. Written Discovery – The discovery process is where a party sends the other party written requests for tangible documents. These requests can go back to the date of marriage (which is when the community property would begin accruing) and can cover paychecks, bank statements, retirement statements, PayPal/Venmo histories, credit card statements, HSA accounts, stocks, bonds, etc. Any type of property or account history may be requested.

Using the documents received from either disclosures or discovery, a competent family law attorney is able to pinpoint any discrepancies or suspicious transactions that may point to hidden assets. For example, if a party is getting cash advance on a credit card that can be detected by looking at credit card statements. Or if paychecks show automatic deposits being made to multiple bank accounts. In this technological world where everything is traced, it is becoming exceedingly difficult to hide property and the tools discussed above are often used to find any hidden or undisclosed assets.

Forensic Accounting

But what if your spouse is smarter than the average spouse and it appears they have successfully hidden community assets? If that is the case, then your legal team can hire a forensic accountant. This is a CPA or accountant who specializes in reviewing accounts and financial documents to pinpoint suspicious activity or trace the whereabouts of missing funds. Forensic accounts are well-versed in tracing items like offshore accounts or cryptocurrency.

A forensic accountant is also helpful in determining a spouse’s actual income. Often a spouse will attempt to deflate their actual income to help reduce their child support or spousal support obligations. A forensic account will review their paychecks, tax returns, bonus structures, compensation packages, and any other documents evidencing income and actually compare to see if their stated income is accurate. This method is especially helpful when dealing with self-employed spouses who can commingle their personal and business expenditures to show a reduced income.

What if Hidden Assets Are Discovered?

The Court has several methods of dividing community property and if a spouse is determined to have hidden assets or attempted to defraud the community by hiding assets, the Court may do any of the following:

  • Awarding a spouse all of the previously hidden assets (or awarding the innocent spouse any nondisclosed assets not specifically awarded in the decree);
  • Finding the sneaky spouse in contempt of court and awarding attorney fees to the innocent spouse.

There is a statute of limitation of two years on any assets discovered after the divorce has been finalized. So if your divorce was recent and you discover that assets existed your spouse did not disclose and were not divided in the divorce, it is imperative you contact a family law attorney to assist you in pursuing claim to those assets even if the divorce has already been finalized.

Time is of the Essence

While there are several helpful tools in tracking undisclosed or hidden assets, it is still important to contact an experienced family law attorney if you become aware that your spouse (or soon to be ex-spouse) is hiding assets. Cash and valuables can disappear and be difficult to recover, even if the existence can be proven). If you are considering a divorce and believe assets may disappear or be hidden, it’s best to begin the search and tracing process sooner rather than later.

The Ramos Law Group, PLLC and its legal team have handled many cases that dealt with hidden assets and have the resources available to help you if you believe your spouse has hidden community property.

by Alfredo Ramos
Divorce, High Net Worth
Featured Image

Maintaining Your Standard of Living After Divorce

Divorce is a financial strain on even the most budget-minded person. Typically, a divorce results in a two-income household becoming a one-household. Even more jarring, sometimes a household that relied on one breadwinner becomes two households on one income. Financial woes or stress are to be expected when going through a divorce, but how can a person really prepare for a divorce financially and maintain their current standard of living? The Ramos Law Group has a few tips for you if you are contemplating going through a divorce.

1. Review Your Existing Financial Needs

Under the Texas Family Code, the family law court system takes a critical view of financial needs. The Court considers costs in the mindset of “are they reasonable and necessary expenses?” Rent, legal fees, business operating costs, utilities, food, clothing, vehicle expenses and even items like tithing and entertainment expenses are all under the umbrella of “reasonable and necessary.”

Should you have a hearing or trial on the issue of temporary support or post-divorce maintenance, the Court is going to want to see a Financial Information Statement that lays out exactly what each party’s monthly expenses are, or as close to possible for each month as things fluctuate.

It is important to have this information at the outset of your case as it will help guide your legal team through the litigation process in terms of goals for support or a final property division. It is helpful to have documentation (bills, credit card receipts, tuition documents) to evidence the needed expenses.

2. Cut Extra Costs

Divorce takes an emotional toll on all involved and it can be difficult for parties to cut items they are accustomed to; it can feel like additional punishment. But a monthly tanning membership or big game hunting trips do not fall under the umbrella of “reasonable and necessary expenses.” If your income allows for it then by all means go ahead, but if parties are litigating over support in Court it can be almost guaranteed the Court is not going to consider those types of expenses as reasonable and order another party to foot the bill. It makes the pill a bit easier to swallow the review the previous six months to a year of expenses and flag expenses that just aren’t all that necessary in the grand scheme of things before the divorce process even gets started. 

3. Plan for the Future

Many parties going through a divorce are desperate to cut the cord and just want out. They are not thinking about the long-term implications of the divorce settlement. But it’s important to do so as what you agree to in a divorce settlement today can hurt you when you file taxes next year. Be mindful of the tax implications of any retirement fund transfers. It’s always better to roll any 401k money you receive from a spouse into an IRA or other fund than take the cash option as there are tax consequences. But some parties need the cash option for a down payment on a home. Talk to your legal team and a financial planner to really think about the long-term results from any divorce settlement. It may feel like you won the lottery with a cash out option on your ex-spouse’s retirement fund but it is going to hurt the next time you file taxes.

It’s common for a person going through a divorce to want to jump into the next chapter of their life – new house, new car, new job – but sometimes it is better to let things settle before trying to start a brand-new life. It can be beneficial to see how you function within the structure of a one-income household with a new budget before jumping in to any new financial obligations.

4. Accept That Certain Things Will Change

Divorce is going to have an undeniable impact on the majority of parties’ standard of living. The Courts do their best to try to mitigate this and make a just and right division of community property, but there is almost always still a void or some sort of effect. It can be helpful to remember these changes may be painful but just a small stepping stone to the next chapter. Things like operating within a restructured budget take an adjustment period.

5. Be Responsible

Divorce can be difficult for even high-worth individuals. For those on the lower end of the income scale, it can be devastating. Accruing some debt during the divorce process is normal and expected. If there are any other avenues, avoid incurring high credit card fees during the divorce process. The Courts typically award debt to the party whose name the debt was incurred in so any credit card debt is likely going with you in the divorce. For certain things like car repairs or attorney fees it can be a necessary evil, but review your budget or try to cut expenses rather than incur frivolous debt.

The same goes for cashing out any small retirement accounts, stocks, bonds, etc. You may feel like you absolutely need the cash (and you might, so this is fact specific) but make sure you are thinking about the tax implications as well.

Each case is different and no couple has the exact same income and expenses. If you are going through a divorce or believe a divorce is on the horizon, gather your financial documents and consult with a licensed Texas divorce attorney like the Ramos Law Group. We can help review your expenses, review your property portfolio and strategize a plan to get you out of your marriage and onto the next chapter of your life with as minimal upset as possible.

by Alfredo Ramos
Business Owner, Divorce
Featured Image

One of the most challenging issues in getting a divorce as a doctor that owns their own medical practice is that their practice may be subject to division as a community asset. Accurate valuation, goodwill, and status of the practice are critical influencing factors on a judge presiding of the matter. Hiring a licensed family law attorney in Texas who can counsel, advocate, and ensure compliance every step of the way while protecting the doctor, the practice, and the family is an important first step in the divorce process.

Separate vs. Community Property and Its Impact

The first determining factor as to whether a spouse has any rights over a private practice is whether it was acquired before or during the marriage. This distinction is vital since Texas is a community property state. Community property is defined as jointly owned assets acquired during the marriage and can be divisible upon divorce. Separate property is obtained before the marriage and is not divisible between the spouses during a divorce.

Even if a practice was started prior to the date of marriage, there can still be a community property element. This can include shares if it is a partnership or issues stock, if an ownership interest from a partner is bought after the date of marriage, etc. The income is its own consideration since income was earned by the practice during the course of the marriage, any income earned from it will most likely be considered community property. Therefore, its value is subject to consideration as part of the doctor divorce settlement.

Since the nature and characterization of a practice can be very complicated, it is important to get a qualified attorney who can review the practice and determine its characterization.

The Value of the Business

In divorce cases and settlements involving doctors, the value of the practice is the most commonly used rubric in dividing the business. The structure of ownership and nature of the practice also plays a role in this determination as well. A business valuation is made by examining two types of assets: tangible and intangible property. Tangible assets are physical in nature, like the building, furniture, and equipment. Intangible assets include intellectual property, goodwill, and accounts receivable.

Goodwill

Goodwill is a medical practice's ability to generate referral business, positive reputation, and a future legacy. It is more challenging to calculate goodwill since it is based upon the doctor and the practice itself. A divorce for doctors and the impact of goodwill centers on specific facts related to the practice. For instance, goodwill can be valued higher when the practice does not hinge upon the doctor's reputation, name, and services as seen in a partnership.

doctor-divorce-settlement

Methods of Dividing a Practice During Divorce

Many divorce cases involving doctors result in settlement. This often takes the form of a buyout agreement for a portion of the value of the medical practice. This can be done by either a lump sum payment, a structured payment schedule or the other spouse could receive a larger portion of other assets, such as retirement or real property.

But every situation and practice is unique; only a family law attorney in Texas can counsel a medical professional on the various legal issues regarding the valuation and division of the medical practice

Call Ramos Law Group

At Ramos Law Group, PLLC, our firm is equipped and staffed with professionals who can help calculate your practice's value, intellectual property, and goodwill. Our property division lawyers are prepared to argue for your rights in the courtroom and have a track record of obtaining excellent results for our clients

Contact us today to speak with an attorney about your case and start down the path to the best possible result.

Scroll to top