There is no doubt about it: divorce is expensive. Even if you are able to work out a settlement agreement for an uncontested divorce, dividing your assets and establishing two households can leave you feeling financially stressed. That is why it is so important to prepare before, during, and after your divorce. 

If you are the spouse filing for divorce, you have some time to get your finances in order before doing so. During and after a divorce, you should create a new budget and financial plan so that you can manage your finances appropriately as a single person. You should also work with a seasoned Austin divorce lawyer who can protect your interests and advise you on matters such as the tax implications of your divorce.

At the Law Office of Jason Wright, we offer experienced legal representation to clients in all types of Texas family law matters, including divorce, spousal maintenance, child custody, and child support. Part of our role involves helping our clients understand the financial realities of divorce and how the decisions that they make during their divorce can affect their bottom line.

Contact us today to schedule a consultation with an Austin family law attorney.

Financial Prep Before Filing for Divorce

One reason that many people stay in unhappy marriages for far longer than they want to is fear of how a divorce will affect them financially. They might think that they are able to buy their spouse out of their marital home, or be worried about splitting retirement accounts. A couple may also be worried about how they will afford to maintain two separate households.

There are some things that you can do to prepare before filing for divorce. While these steps won’t necessarily make it easier to divide up your assets or share custody of your kids, they can help make the transition smoother. 

If you are thinking about filing for divorce, you should:

1. Think about your living situation. If you jointly own your primary residence with your spouse, then you will have to figure out who will stay in the house, if anyone. If you share children, there may be a benefit to keeping the house for stability. Otherwise, you may want to consider selling the home if neither spouse will be able to buy out the other or if you don’t know that you will be able to agree on who gets the house.
2. Gather financial information. In Texas, the parties to a divorce must make certain disclosures shortly after filing for divorce. This includes information about your assets, including real property and any loans, pension and retirement accounts, insurance policies (including health insurance), bank accounts, and federal income tax returns. You should spend some time putting together these documents. This will not only help you prepare to make these disclosures, but it will also give you a better idea of where you stand. It can also assist your Austin divorce attorney in understanding what property division is likely to look like in your case.
3. Make a budget. Even if you and your soon-to-be ex can agree on most things in your divorce, filing for divorce will still cost money. When added to the fact that you will potentially lose an income in your household and have to pay all of your bills yourself, it can be costly. After you have assembled your financial documents, take some time to go through them in detail and create a realistic monthly budget. This will help you figure out what you can afford when it comes to housing, utilities, groceries, transportation, healthcare, and other regular expenses. It can also be useful for your lawyer when it comes to negotiating the division of property, spousal support, and other issues.
4. Be conservative with your spending. Even after you file for divorce, you will still have expenses that you have to pay. You should keep paying those bills. However, you should avoid making any big, out-of-the-ordinary expenses during this time (unless it’s necessary, such as a new refrigerator to replace one that broke). You want to be careful with your money during this time and also avoid any potential allegations of waste.
5. Think about your options for resolving your case. Divorce can be expensive, but it doesn’t have to involve years of litigation or tens of thousands of dollars in lawyer bills. Consider whether it may be possible to work out a divorce settlement, whether through negotiation directly with your spouse and/or their lawyer, or through alternative dispute resolution (ADR) such as mediation. While it isn’t always possible to work collaboratively with your spouse, spend some time thinking about what approaches may be possible and how you can achieve your goals.
6. Reach out to an Austin divorce attorney. Even if you don’t plan to take your spouse to court, it is always a smart idea to talk to a lawyer about your options. They can review your financial and other information and help you understand what divorce might look like in your case. This can help you make a more informed decision about how to move forward with your case.

While making the decision to divorce is rarely easy, being prepared can be critical when it comes to managing your finances. Our team of skilled Austin family law attorneys can help you understand in more detail the steps that you should be taking to prepare for your divorce.

Financial Considerations During and After a Divorce

After the divorce petition has been filed, you will still need to think about your finances. There are a few things that you should keep in mind when going through the divorce process:

• If one spouse is the primary breadwinner, then talk with your lawyer about whether spousal maintenance  (alimony) and/or child support (if you share children) might be a factor. Spousal maintenance is not automatically awarded in Texas, but if one spouse needs financial support and the other spouse has the ability to pay maintenance, it may be ordered if other conditions are met. Similarly, if you have minor children together, then the spouse with less custodial time will likely pay child support to the other parent. Your attorney can help you determine if spousal maintenance may be awarded in your case and what your child support obligations might be based on the Texas child support guidelines.
• If you own real estate together, then divvying up those assets will be a critical part of any divorce. One of the biggest issues in many divorces is what will happen to the primary residence. One person may keep the home, which may require them to refinance a mortgage in their name and allow their spouse to have a larger share of other assets. Alternatively, the couple may decide that the best option is to sell the house and divide the proceeds equitably. 
• If one or both parties have a retirement or pension plan, then any portion considered marital property will be divided in the divorce. You should think about how this will impact your retirement plans, particularly if you are closer to retirement. Similarly, you should also take some time to learn about Social Security benefits if you were married for at least 10 years. You should review this issue with your Austin divorce attorney to understand your rights and when it makes sense to elect to receive benefits.
• Finally, you will need to consult with your lawyer about the tax implications of your divorce. This applies to everything from mortgage and property taxes to filing status to capital gains from the sale of assets to how your children will be claimed on taxes. These aspects should be fully considered before you reach a divorce agreement.

A skilled Austin divorce attorney will walk you through each of these items and ensure that your rights are protected in a divorce. They can also help you with the next steps after a divorce, such as making sure that your beneficiary designations and wills are updated, that assets are properly divided, that your bills are updated, and more. Taking these steps can be key when it comes to protecting your financial well-being in a divorce.

Contemplating Divorce? Give Us a Call.

Divorce is not easy, financially or emotionally. If you are considering getting a divorce, there are steps that you can take to make the financial aspects a little bit easier. Our law firm is here to help.

The Law Office of Jason Wright represents clients in divorce and related matters in Central Texas. We advise clients on all of the financial aspects of their divorce so that they can make informed decisions and get the best possible outcome for their case. To learn more or to schedule a consultation with a seasoned Austin divorce lawyer, call our law offices at 512-706-9662 or fill out our online contact form.