Posted on June 04, 2015 in Child Support

With tassels turning on mortarboards throughout Central Texas, this question is a popular one in divorced families throughout the area. While the short answer is "no, unless the child is still in high school or is disabled" there are some nuances in child support law that both parents should be aware of.

The Law

There is some basis for a post-majority support claim to pay for college expenses. Section 154.123(9) allows the judge to consider "the expenses for a son or daughter for education beyond secondary school" when setting the amount. Forward-thinking parents can use this provision to increase the amount of regular support for minor children by a few dollars a month, and require the obligee parent to set those funds aside exclusively for post-secondary expenses.

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 Posted on May 27, 2015 in Child Support

When it comes to child support calculation, Texas is one of only several percentage-of-income states. Non-custodial parents pay a set percentage of their net income on a sliding scale according to the number of children before the court.

Nearly all other jurisdictions use an income share model. It attempts to give the children the same standard of living they would have enjoyed if the parents had remained married, by considering the income of both parents as well as the amount of parenting time of each party. Although this model may be somewhat more equitable – for example, it avoids the unusual result of an unemployed non-custodial parent paying child support to a wealthy custodial parent – the percentage-of-income model is easier to apply and leads to more predictable results.

The Law

Chapter 154 of the Family Code sets forth the law for child support allocation in a complex divorce. The scale begins at 20 percent for one child, and ends at 40 percent for five or more children. There are also rules for determining an obligor's net income, because only some deductions are allowable. This inquiry can become rather complicated if the obligor is self-employed or earns indirect income, such as the use of a company car or an employer-paid insurance plan.

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 Posted on May 20, 2015 in Complex Divorce

Collaborative law is quite common in certain areas of North America, including California and Canada, but it has not gained much traction in some areas of The Lone Star State. Is this model an option for your complex divorce or other family law issue?

The Collaborative Family Law Act outlines the procedure in Texas. In a nutshell, the process is somewhat similar to ongoing mediation, with a few important distinctive qualities. The mindset is different. In traditional mediation, it is "every man for himself." The lawyers are determined to walk away with the best deal possible for their respective clients, and they care little or nothing about anyone else's interests. In collaborative law, the parties remain cognizant of how the outcome may affect other people both directly and indirectly involved in their complex divorce.

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 Posted on May 06, 2015 in Complex Property Litigation

The marriage dissolution rate for these couples has doubled in the last twenty years. These "gray divorce" matters are often the epitome of a high-asset divorce. While there may be no complex child custody issues to resolve, the property division can be a Gordian Knot of separate assets, community assets, and commingled assets.

Aging baby boomers were the first demographic group to divorce in significant numbers. Many of these people are now in their second or subsequent marriage, and the fact that the divorce rate is significantly higher in these relationships may partially explain the gray divorce phenomenon. In one study, the authors pointed to unique later-in-life issues — such as the empty nest syndrome, declining physical health, and ailing parents — which can put added strain on a relationship.

The study predicted that gray divorce would increase even if the overall divorce rate remained flat, due to the aging American population.

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 Posted on April 22, 2015 in Complex Divorce

Most Texas courts require parties to mediate a contested family law matter prior to trial. Other times, the parties may attempt to resolve a case before it comes to that point. Mediation is not always successful, but it is almost always worth a try, particularly in a high-asset divorce.

If mediation is an option, the first step is to choose an effective mediator. It is important to use an attorney who practices family law in the area. Anyone else may be unfamiliar with the legal process, with the law applicable to your case and with the judges in that jurisdiction. If a court has ordered the parties to use a certain person, the judge is sometimes willing to reconsider that directive.

Mediations are normally full-day affairs. The parties meet at a neutral location – typically the mediator's office or a conference facility – and the attorneys make brief opening statements. Afterwards, the parties retire to separate rooms and the mediator conducts shuttle diplomacy by conveying offers and counteroffers until an agreement is reached.

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 Posted on April 15, 2015 in Complex Property Litigation

Section 6.711(a) of the Texas Family Code mandates that prior to entering a judgment that divides the estate of the parties," the court must enter affirmative, written findings regarding the value of the community estate's assets, as well as the value of separate assets. Subsequent case law has made it clear that there cannot be a just and right division of the estate if these findings are absent.

Real estate is difficult to value, especially in a high-asset divorce. The amount on the tax roll is usually inflated, so the taxing authority can collect additional revenue. There may be other issues as well. In some cases, the "property" may be an unimproved piece of land. Moreover, especially regarding income-producing property, the sales value may be too high or too low.

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 Posted on April 08, 2015 in Complex Property Litigation

A retirement plan may be one of the largest assets in the marital estate, especially in a high asset divorce case when the parties have been married for a number of years. Section 7.003 of the Texas Family Code authorizes the judge "to determine the rights of both spouses" with regard to a defined benefit pension plan or a defined contribution retirement plan, such as a 401k or IRA.

Each plan is different and has its own rules. Some plans, most notably military retirement plans and some other accounts related to federal government employment, require a special Division Order, as opposed to a Qualified Domestic Relations Order (QDRO). It is important that the QDRO or other order be timely and accurate, or else the IRS may assess taxes and penalties against the Alternate Payee, or non-employee spouse.

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 Posted on April 01, 2015 in Complex Property Litigation

Quite often, asset and property division involve complex accounting measures in high-asset divorce cases.

Assume that Husband owned an investment portfolio prior to the marriage. Initially, he only contributes funds from his separate bank account. As time passes, however, both Husband and Wife begin investing money, and sometimes these funds come from a Wife's separate bank account.

Also assume that Wife owned a rental house prior to the marriage. The couple subsequently elected to take out a second mortgage on the marital residence and use the proceeds to renovate the rental property. Before the renovations, the house was essentially un-rentable and borderline uninhabitable. Since the renovations, the house has been continually occupied by a responsible tenant who pays market-rate rent.

These two examples present significant classification and division issues during property settlement negotiations in a high net worth divorce. It is very important to have an experienced and aggressive divorce attorney who can help craft a plan that is a just and right division of the marital estate, and simultaneously protects your legal and financial interests.

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 Posted on March 24, 2015 in High Asset Divorce

Texas is a no-fault state, and the vast majority of divorces are based on "insupportability," which is Texan for "irreconcilable differences." However, a spouse may still obtain a divorce based on adultery, cruelty, or some other evidence-based ground. An adverse ruling – or a favorable ruling, depending on your point of view – can have a significant impact on a future property settlement in a high-asset divorce.

Section 8 of the Family Code states that "marital misconduct" is a factor when determining the amount and duration of maintenance payments. The statute specifically mentions adultery and cruel treatment, but other types of fault may also be applicable. Meanwhile, Section 7 states that a spouse may be punished in the property settlement, if there is evidence of fraud on the community. Such fraud could include a husband who spends community funds to buy a present for his girlfriend or a wife who has part of her paycheck deposited into a separate account, without her husband's knowledge or consent.

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 Posted on March 10, 2015 in Complex Property Litigation

A premarital agreement can hardly be considered romantic, but it is an important part of a strong marital foundation. Many couples fight over money issues, and although the issue is normally dealing with debt, dealing with large assets can be every bit as stressful.

By executing a solid premarital agreement, you can eliminate a potential source of conflict before it ever manifests itself in the first place. If there is a high-asset divorce later, a premarital agreement may help narrow the issues, and the spouses might avoid a legal battle that is both financially and emotionally costly.

Who Needs a Premarital Agreement?

Persons who are getting married for the second or subsequent time often have some separate property they want to protect. The cash value often pales in comparison to the emotional value, so the property could be a retirement nest egg or a china cabinet. Second-time spouses also may have children from a previous marriage, so a stepfamily can introduce significant inheritance issues.

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