Finances in Planning for LGBTQ Divorce in Austin, Texas

Divorce is never easy to go through for anyone, but in the case of LGBTQs in Austin, Texas, there may be some specific financial considerations involved in ending the marriage. As the capital city of Texas continues being a beacon for diversity and inclusion, it is important for LGBTQs to know more about the specific financial aspects of divorce in this jurisdiction.

This blog is to provide all the valuable insights and expert advises required by a reader in the context of navigating this complex financial planning during an LGBTQ divorce in Austin.

Understanding The Texas Law Regarding LGBTQ Divorce Is Complicated

As an introduction to preparing a financial plan, it will be important to understand the legal environment surrounding LGBTQ divorce in Texas. Federal rights regarding same-sex marriage, established by the landmark Obergefell v. Hodges case in 2015, recognizes the legality of same-sex divorce. Texas law, however, can be a bit more nuanced:

Residency Requirements

At least one of the spouses must be a resident of the state for six months and, upon filing a petition for divorce, must also have been a resident of the county where the divorce is being filed for at least 90 days.

Community Property

Texas is one of the states that take community property into account, this means that any important assets acquired during marriage should be divided fairly upon divorce.

No-Fault Divorce

Texas permits no-fault divorce, which could make divorce easier but might also interfere with financial settlements.

Retroactive Recognition

Most couples enter long-term relationships before same-sex marriage became legal. This may make the division of assets and other financial issues somewhat complicated within a divorce.

All this legal understanding is very important to make the proper financial planning during an LGBTQ Austin divorce.

Key Financial Considerations for LGBTQ Couples Divorcing in Austin

Some of the key financial considerations for LGBTQ couples considering divorce include:

Division of Assets in a Community Property State

Community property laws under Texas often influence the division of assets in a divorce. Some very important points are:

• Separate and Community Property: Separate property is the property owned by either spouse before marriage or acquired during the marriage other than through marital contributions. The community property is acquired during the marriage.
• Ownership of Business: If either husband or wife owns a business, valuing and deciding how to divide it is often a real challenge.
• Real estate: Austin’s seemingly burgeoning real estate market also complicates division at your expense. Consider procuring professional appraisals for any owned properties.
• Retirement accounts: Sometimes, 401(k)s, IRAs, or pension plans have to be split and more commonly require a QDRO.

Alimony or Spousal Support

Spousal maintenance in Texas is sometimes referred to as alimony. Alimony cannot be awarded automatically. The following could factor into spousal maintenance:

• Duration of the marriage
• Each spouse’s ability to meet his or her minimum reasonable needs.
• Education and vocational skills of the parties
• Contributions to your spouse’s education or career

In fact, when determining spousal maintenance, the court will take into account the full length of the relationship and not just the legal marriage.

Child Support and Custody

For LGBTQ couples with children, financial planning must include considerations for child support and custody arrangements. In Texas:

• Child support is typically calculated based on the non-custodial parent’s income.
• The court will determine the best interest of the child to decide custody arrangements.
• Non-biological parents may find difficulty in claiming legal custody or visitation rights if not legalized to such children.

Tax Impact

Divorce can give rise to a number of significant tax effects in various areas.

• Filing status: Divorce will also change your tax-filing status.
• Property Transfers: Transfers of property between spouses due to divorce are generally tax-free.
• Alimony: Under recent tax law changes, alimony is no longer deductible by the payer and is no longer taxable income to the recipient.
• Dependency Exemptions: It determines who will claim children as dependents on the tax returns.

Insurance and Healthcare

Planning for post-divorce insurance and health care

• Health Insurance: If you’re on your spouse’s health insurance plan, you’ll need to secure new coverage post-divorce.
• Life Insurance Review and update: Benefits on life insurance policies to beneficiaries.
• Disability Insurance: Assess your need to buy or switch disability insurance coverage.

Austin Financial Planning for Divorce: Pragmatic Advice for the LGBTQ Family

Collect and Organize All Financial Documents

Start by collecting all relevant financial documents, including:

• Bank statements
• Investment accounts statements
• Retirement account details
• Tax returns (last 3-5 years)
• Pay slips
• Mortgage papers
• Credit cards End
• Business financial records (if any).

Organizing these documents early in the process will help you and your legal team make informed decisions.

Evaluate Your Current Financial Condition

Take stock of your current financial status:

• List all your assets and debts.
• Calculate your income and expenses
• Determine your credit score
• Review of Budget and Expenditure

This test will help you determine your present financial situation and create a plan for post-divorce life.

Stipulate Separate Finances

If you haven’t already, start segregating your money:

• Open separate bank accounts.
• Apply for credit cards in your name
• Remove your spouse as the authorized user on all of your credit cards.
• Change passwords of online financial accounts.

Consult Financial Experts

Consultation with financial advisors who are well conversant with Austin gay divorce

• Financial advisor: Supply a possible long-term financial planning and investing policy.
• Accountant: Can help find tax implications and assist with getting any financial documents prepared.
• If you suspect there may be hidden assets, consider a forensic accountant to dig them out.

Mediation or Collaborative Divorce Consideration

Austin offers some alternatives to court-based divorce proceedings:

• Mediation: A third neutral intermediary elicits agreements from the couple and the spouse.
• Collaborative Divorce: The parties with their attorneys commit to resolve the matters out of court.

The options are likely to be more economical, friendlier, and chances of a better financial settlement.

Plan for Your Life After Divorce

Look beyond the process of divorce itself:

• Plan a post-divorce budget
• Set new financial goals.
• Further study or a career change may be required.
• Check and adjust your retirement strategies

Protect Your Credit

Yes, divorce can indeed hurt your credit. Here’s how to protect it:

• Monitor your credit report regularly
• Close joint accounts if possible
• Refinance shared loans in their own names

Revise Estate Plans

Rewind estate planning documents, which include:

• Will
• Trust documents
• Power of attorney
• Health-care directive
• Beneficiary designation of retirement accounts and life insurance policies

Unique Challenges of LBGT Couples in Austin

While Austin is at times very acquiescent, there are several other issues with gay couples:

Duration of Relationship vs. Marital Law

Many of the LGBTQ couples were married longer before same-sex marriage was made legal. It makes some financial dispute complexities complicated in divorce, particularly over:

• Holding assets
• Alimony considerations
• Retirement benefit calculation

Courts in Austin may also take into account the overall duration of the relationship, not just the marriage, in making financial decisions.

Property Ownership Complexities

Such couples who purchase properties before the legality of marriage will face some real challenges regarding the division of properties. Clear documentation of the property owned and contributed is highly necessary.

Adoption And Rights Of Parents

For couples with children, especially if only one partner is the biological parent, establishing parental rights is crucial. This affects:

• Child support responsibilities
• Custody arrangements
• Financial planning for later end

Employment and Benefits Discrimination

Even though there is still progress, LGBTQ persons can still be discriminated against concerning employment or benefits, which can affect financial planning both during and after divorce.

Resources for the LGBTQ Individual in Austin Seeking Divorce

Austin has various resources, including links for LGBTQs during divorce.

• OutYouth Austin: Support and resource for LGBTQ youth and young adults.
• Equality Texas: Advocates for LGBTQ rights and can provide legal referrals.
• Austin LGBT Chamber of Commerce – network opportunities and connections with the member group.
• PFLAG Austin provides support, education, and advocacy for LGBTQ people and their families.

Choosing the Right Legal Representation

An attorney who specializes in LGBTQ divorce cases in Austin should be chosen. Use a lawyer who:

• Has direct experience handling LGBTQ divorce cases.
• Is aware of the peculiar financial issues that LGBTQ couples face.
• Familiar with Austin family courts and laws local to the area
• It offers a sympathetic and understanding approach.

An Austin, Texas LGBTQ divorce requires special consideration of unique legal and personal factors along with thorough financial planning. Understand what the unique challenges may be, gather the proper documentation, seek professional advice, and plan for the future so you get out of this divorce financially better than you went into it.

Remember that divorce is difficult, but at the same time, it creates an opportunity to begin life anew. Proper financial planning and a good support system are adequate to start life more confidently from this point on.

In case you are facing an LGBTQ divorce in Austin and need professional legal advice, you should not hesitate to call Kimbrough Legal PLLC. The group of experienced family law attorneys knows the intricacies of an LGBTQ divorce and will offer you the compassionate yet skilled representation you need during such a tough time.

Call Kimbrough Legal PLLC
Phone: 833-553-4251
Email: info@kimbroughlegal.com