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What to Know About Changes in Alimony Laws

Coming Changes in How the IRS Treats Alimony

Approximately 400,000 people per year receive alimony payments from their former spouses. Until the first day of 2019, alimony will continue to be treated as a tax deduction for the one who pays it and a source of income for the recipient. However, on January 1, 2019, this will no longer be the case.

Alimony Paid Will No Longer Be Tax-Deductible

Beginning on January 1, 2019, alimony payments will no longer be eligible for a tax deduction. If you are the one making the alimony payments, you are most likely in a higher tax bracket than your former spouse. Consequently, there is a general presumption that you would pay more tax on this money than your ex-partner would. Removing the deduction and shifting the tax burden to the one who makes the payments will most likely generate more receipts for the Internal Revenue Service.

The modification of the tax law could result in significant changes after it takes effect. In some cases, it might be possible to use money from a retirement account to make alimony payments. This could be a way to obtain some tax relief by meeting your alimony obligation with money that will be taxed in the future.

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Alimony Payments Received Will No Longer Be Considered Income

If you currently receive alimony, it is considered income that is to be reported on a tax return. If you’d prefer not to pay taxes on that cash this year, it can be used to fund an IRA or other retirement account. It can also be used to qualify for mortgages, home loans or credit cards. After the tax treatment of alimony changes, it may be necessary to find a job to fund a retirement account or obtain a qualifying income for a loan.

The Law Only Applies to Divorces Effective After 2018

The important thing to know about the new alimony rules is that they only apply to divorces finalized after the last day of 2018. Therefore, if you finalize your divorce at any point in 2018, alimony retains its current tax treatment. Furthermore, if your divorce was finalized at any point in the past, you will also receive the same tax treatment into 2019 and until the alimony period ends.

How Does the Change Impact Prenuptial Agreements?

It is unclear how the change will impact any prenuptial agreement that you have created with a spouse or future spouse. It may be a good idea to consult with a family law attorney who can review the agreement and analyze it in the context of future changes to the law. If necessary, now may be an ideal time to make changes to an existing agreement in order to protect yourself as tax laws are altered.

Make Sure That Payments Qualify as Alimony

Regardless of when your divorce takes place, it is important that any payments made or received qualify as alimony. Many general criteria need to be met. Payments made must be pursuant to a divorce decree or a separation agreement. They must also be made for the specific purpose of helping a former spouse maintain a reasonable standard of living.

If you are making or receiving an alimony payment, it cannot be given to or from someone who lives in the same household. Furthermore, you can’t file a joint return with the person from whom you receive or to whom you give spousal maintenance. Finally, the payment must be made in cash or a similar manner such as check or money order.

The IRS uses strict standards when determining if a person is entitled to special consideration regarding such a payment. These are unlikely to change going forward, so if you want your payments to qualify as alimony, it is important to understand the rules.

If you are looking for a family law attorney to advise you on these matters, contact Stewart Law PLLC at (281) 420-8020 at our practice in Baytown.

Understanding Retirement Fund Division During Divorce

Dividing Retirement Funds in a Texas Divorce

When people in Texas decide to divorce, they may be concerned about how it will affect their retirement years. Retirement accounts may be held in either person’s name, so the spouse who doesn’t own the account may be unsure about how the divorce will affect his or her ability to retire in the future. When you understand more about property division, it can help you make the right decisions for yourself and your family. A Texas divorce lawyer can offer important advice about retirement fund division during divorce.

Marital Retirement Fund Contributions Are Community Property

Contributions that were made to retirement accounts during the marriage are considered community property. While premarital contributions are considered separate property, those made during the marriage are considered to belong to both partners regardless of whose name is on the account.

Different types of retirement accounts include:

  • IRAs (Individual Retirement Accounts)
  • 401(k) and 403(b) plans
  • Roth IRAs
  • Company pension plans
  • Defined contribution accounts

In some cases, a single retirement account can contain both community property and separate property. If contributions to the account began before the marriage but continued throughout its duration, it will be necessary to value the account properly in order to understand the extent to which it can be divided in the divorce.

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Marriage Length Can Affect Retirement Fund Division

For retirement plans like 401(k)s, 403(b)s or IRAs, the length of the marriage is not important. The retirement funds do not need to be split evenly between the spouses. Separate property and community property must be divided, but judges can also make decisions that reflect unequal wealth, parenting time and other factors.

However, Social Security benefits, military retirement funds and some pensions have alternative rules about spousal eligibility. In these cases, the length of the marriage is relevant, and people who have been married for longer have greater rights. A Texas divorce lawyer can help people understand the value of their retirement funds and how divorce will affect them.

Military Retirement and Social Security Benefits

In order to be eligible to receive benefits under your spouse’s Social Security benefits, you must have been married for 10 years or longer. This type of access is based on your spouse’s work record. It can help people in long marriages where one person stayed home with the children while the other spouse worked at outside employment. The entitlement to spousal benefits can also depend on your own Social Security benefits that you accumulated through your work career. Spousal Social Security benefits after divorce do not diminish your spouse’s ability to access his or her full benefit.

Depending on how long your spouse served in the military, you may be able to access spousal military retirement benefits after divorce. If you are eligible, you would be able to receive payments directly from the military retirement system.

Researching Spousal Retirement Accounts

In cases where a divorce is more heavily contested or financial secrecy is an ongoing factor, one person may be concerned that his or her spouse is hiding retirement accounts. Employer-based programs are generally visible on an earnings statement or paycheck stub. Other types of accounts will often send statements or tax information. A Texas family law attorney can also help you research whether your spouse’s employer provides pension plans even if he or she intends to hide the information.

In addition, once a divorce has been filed, generally, neither party can make withdrawals from retirement accounts without a court order. In many cases, this type of restriction is automatic. In other situations, your family law attorney can seek a specific order from family court.

Properly Dividing a Retirement Fund

After the divorce is final, you can take action to make sure the retirement accounts in question are divided according to the agreement or court order. To divide an IRA, you will generally need only the divorce decree to enforce the order. However, in most other cases, such as with 401(k) plans, 403(b) plans or pensions, you will need a Qualified Domestic Relations Order (QDRO), which is a specialized court order for this purpose. This court order will be drafted by your divorce lawyer and signed by the judge, and it will lay out the specific division requirements for the account. It is critical to divide these accounts properly in order to avoid hefty taxes and fees.

If you are concerned about how divorce could affect your retirement and need to plan for the future, reach out to a Texas family lawyer. Call us at Stewart Law PLLC at (281) 420-8020 to schedule an appointment at our office in Baytown.

How a Contested Divorced Differs From an Uncontested One

Differences Between Contested Divorce and Uncontested Divorce

Having a good understanding of the main differences between an uncontested divorce and a contested divorce should provide you with the information you need to select the type of divorce that’s right for you. Even when you’ve done everything you can to make a marriage work, there are times when the only thing left to do is seek a divorce. In the state of Texas, the divorce rate was 2.6 per every 1,000 inhabitants in 2015. When you’re considering filing for a divorce, the two options available to you are a contested divorce and an uncontested one, and you should be familiar with each one before beginning your divorce proceedings.

What Is an Uncontested Divorce?

The big reason that there are two main types of divorce is because there are a variety of issues that must be agreed upon by both parties. These issues include:

  • The custody of any children
  • The division of property
  • Division of any debt
  • Payment of both child and spousal support

The only way to proceed with a divorce is for both parties to agree on each of these four issues. An uncontested divorce is one where both spouses will agree on every issue without needing to go to court. Determinations about child support amounts and spousal support will generally be made as an agreement between the two individuals that is binding when they’re filing for a divorce. This type of divorce is typically the less complicated one.

What Is a Contested Divorce?

The four issues mentioned previously can be very complicated to handle. Even if both spouses agree on 99 percent of the issues, that final percentage point can be the difference between a contested divorce and an uncontested one. There are times when a contested divorce will begin but an agreement is eventually reached before the case actually goes in front of a judge. This is referred to as a settlement and is largely similar to an uncontested divorce. Even if it appears as though a contested divorce is the only option left open to an individual, the assistance of a family law attorney may be able to help bring both spouses to an agreement.

contested divorceA contested divorce can be a complex one. A judge will hear every detail of the case and make determinations on all of the aforementioned issues. A contested divorce will typically arise because of hefty financial stakes, technical aspects that may be difficult to resolve, or comprehensive issues that might require knowledge of the law to solve. While an uncontested divorce can be completed without ever going to court, a contested one must go before a judge. The process is a lengthy one that typically begins with the signing of a divorce petition and extends through the discovery process and the actual trial. Another option to consider during divorce proceedings is divorce mediation, which involves a third party that handles negotiations between each spouse.

How to Navigate the Divorce Process

While it’s possible to navigate the divorce process by yourself, you might want to obtain the assistance of a family law attorney like ours. Our divorce attorney can help you understand your rights when it comes to a divorce. If you decide to retain the services of our attorney, she will help you navigate the divorce process. A divorce can be as simple or as complicated as each spouse makes it. However, we understand that it can be difficult to divide marital property or make a decision on child custody without the advice of an attorney, which is why we aim to handle most of the work for you.

When you file for a divorce in Texas, there’s a large amount of paperwork to fill out and a substantial number of rules that can determine how and if you can file for a divorce. If you believe that you need assistance with these aspects of the process, our family law attorney is on hand to help you with whatever you need.

No matter which type of divorce you’re facing, call our family law attorney in Baytown at (281) 420-8020 to set up a consultation.

What You Need to Know About Establishing Guardianship for Your Child

When a Child With a Disability Needs a Guardianship

When you have a teenage child with a severe lifelong physical or mental disability, you may need to establish legal guardianship in order to protect your child’s rights and make decisions for your child once he or she turns 18 years old. According to the 2010 U.S. census, 56.7 million people have a disability. The number of people in the United States with a severe disability has increased, and people with severe disabilities are often unable to hold a job or make decisions for themselves. If you have an adult child with a disability, you may need to establish legal guardianship in order to protect your child’s rights and make certain types of decisions for him or her.

What Legal Guardianship Is

Legal guardianship is the legal right for you to make decisions for a person who the court declares to be not competent to make their own decisions. There are two types of legal guardianship that someone with a disability might need. The first type is guardianship over the person. This gives you the right to decide where the person will live, which doctors he or she will go to and whether or not he or she will attend an adult day care program or other activities for people with disabilities. The second type of legal guardianship is guardianship of the estate. This refers to the management of the funds or assets of a person with a disability.

Who Needs a Legal Guardianship?

The courts determine whether or not a person with a disability needs a guardianship. The decision is based on whether or not the person is able to make competent decisions about their person or their estate. For nearly all children under the age of 18, parents are legal guardians authorized to make medical and financial decisions on behalf of the child. Once a child turns 18 years of age, that guardianship ceases. A person who is incapacitated may not be able to make decisions about their person or estate. As a parent, you can apply for legal guardianship of your child with a moderate or severe physical, mental or cognitive disability.

Legal Paperwork Related to Guardianship Applications

The first step of applying for legal guardianship of your adult child with a disability is the completion of guardianshippaperwork. The court clerk can provide you or your attorney with the paperwork. A key aspect of the paperwork must be completed by your child’s physician or medical specialists. The physician’s explanation of your child’s physical, mental or cognitive disabilities will be closely examined by the family court judge. Some of the paperwork should be completed or reviewed by a family law attorney who is familiar with the guardianship process and laws in Texas. You may also need to arrange for a social worker to visit your home or the place where your child lives. An interview may also be a part of your application for guardianship.

Court Appearance for Legal Guardianship Applications

The final part of a guardianship application is the appearance in court. After turning in your paperwork, you’ll receive a court date. The family law judge will review your application before the court date. He or she may have some questions for you during the court hearing. Representation from your attorney can help you answer those questions, or your attorney may answer them on your behalf. You may have a second hearing if the judge requests additional paperwork or documentation of your child’s health status or disability. The court may grant you guardianship alone, or you and your child’s second parent or another responsible adult can be named as co-guardians of the child with disabilities.

Establishing a legal guardianship for your adult child with a disability provides you with a way to protect his or her rights. Without the legal guardianship in place, you may not be able to make decisions or represent your child’s interests. The court could appoint a legal guardian to your child if you do not apply to be one. Contact our associates at Stewart Law PLLC today at (281) 420-8020 to schedule a consultation at our office in Baytown about establishing legal guardianship for your child with a disability.

Talking With Your Child About Divorce

How to Talk With Your Kids About Divorce

According to the American Psychological Association, 40-50 percent of all marriages end in divorce. Filing for divorce is never an easy choice, and when you have children, things become even more complicated. If you’re preparing to go through a divorce and you and your partner do have children, then make sure you discuss these family changes with your children.

Starting the Conversation

Perhaps one of the most difficult aspects of divorcing when you have children is simply starting the conversation about how your family is about to change. No one wants to begin a conversation that can be scary, painful, or emotional, but it’s important to include your children in the process so that they understand what’s going to happen.

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Make sure you and your partner sit down together with your children. This will help present a united front as you speak with your little ones about what’s going to happen. Remind your children that the divorce isn’t their fault. Explain that you’re not mad at your children or angry with them. Sometimes, parents choose to divorce, and it doesn’t mean they don’t care deeply for their children. It’s vital that you reinforce the idea that the divorce isn’t your child’s fault as many children struggle with the reasons for a couple’s separation.

Ensuring Open Communication

Ask open-ended questions as you talk with your children. Encourage them to share their thoughts and concerns during this time. The most important thing to remember is that you, your former partner, and your children all need to be able to talk with each other. You’re all in this together, and although your family dynamics will be changing, you’re still a family.

Avoid becoming angry or frustrated when you speak with your children. You and your former partner should aim to speak in calm, low tones as you discuss the process with your kids. Keep in mind that it’s normal for kids to feel a variety of emotions, including confusion, anger, and frustration. Your children may also feel sad. Take a deep breath, but try to remain focused and calm as you discuss the process with your children.

Easing Fears

If your children feel scared, understand that this is a normal emotion. Take necessary steps to eliminate as much fear as possible. Remind your children that you and their other parent still love them. Explain how sleeping and living arrangements will change. If possible, read with your kids books about divorce. Most importantly, answer as many questions for your children as you can. While you don’t need to reveal specific reasons for your divorce, remind your children that the divorce isn’t their fault.

You may also choose to seek divorce support from a mediator or even a family counselor who can offer further ideas for sticking together as a family and help you and your children communicate during this time. Counseling sessions may be attended by you, your children, and your former partner. You may attend family counseling in a group or individually. The primary goal is to help ease your children’s transition, so don’t be afraid to reach out and get the assistance your family needs during this difficult time.

How Your Attorney Can Help

As you prepare for your divorce, a lawyer can offer the guidance and assistance you need to move forward. Stewart Law LLC has a family law attorney who’s ready to answer your questions and guide you through the legal process as you and your partner separate. Whether you want to legally separate from one another or you’re ready to begin the divorce process, reach out for a confidential consultation. Call our office in Baytown at (281) 420-8020 today to receive the assistance you need. We’re ready to help you and your family as you prepare for the next stage of your life. Our attorney will strive to address any concerns or questions you may have.

Major Changes to Texas Child Support in September 2018

Child Support Is Changing in Texas

The Texas Family Code includes several new changes that have gone into effect in 2018, including major changes to child support that will become active as of September 1, 2018. Learning about these changes can be important for single, divorcing, and divorced parents to understand future child support orders as well as determine the potential of modifying existing orders. These changes could make it much more difficult to seek modifications and discourage agreements that deviate from standard support amounts.

Child Support Before the 2018 Changes

In Texas, Chapter 154 of the Texas Family Code determines the amount of child support that the noncustodial parent must pay the primary custodial parent each month. This amount is calculated according to monthly net income and the number of children the parent has. The largest potential child support obligation reaches up to 40 percent for cases that involve five or more kids. In addition, the support-paying parent must pay for the child’s medical coverage; this cost is deducted from the parent’s monthly income in order to calculate his or her cash child support obligation.
Custody of Minor Children

New Approaches to Child Support

As of September 1, the TFC will now require dental insurance to be handled by the noncustodial parent, much like health insurance. As is the case with health insurance, the premiums will be deducted from the parent’s monthly income before calculating the child support obligation.

However, the most significant change concerns child support modifications, particularly when both parents made their original agreement for an amount of child support that’s outside the guidelines provided in the TFC. Prior to the changes, there were three circumstances in which a child support order could be modified after an agreement outside of the provisions of the Texas Family Code:

  • When the child’s circumstances or the paying parent’s circumstances have materially and substantially changed since the original order
  • When the parties reached an agreement through mediation or collaborative law practice
  • When the monthly amount of child support would differ by either 20 percent or $100 from the amount that would have been applied under the TFC guidelines, within three years of the original order or most recent modification

However, under the changed guidelines, an original order outside the official state guidelines can only be modified on the grounds of a material and substantial change to circumstances for either the child or the paying parent.

Effects of Child Support Changes

Prior to these changes, parents who agreed to a child support payment outside the TFC’s formula may have expected to wait a short time before seeking a modification based on increased income if the support-paying parent had found greater career success. It’s possible and indeed expected for many people’s income to rise over the duration of their careers. In the past, all that was necessary to seek a modification was to show this income increase in the previous three years. Under the changed guidelines, the burden is far more substantial.

In addition, these changes may discourage parents from reaching agreements that deviate from the TFC guidelines as later modifications may be particularly difficult to obtain. Parents may be less likely to agree to any change that could inhibit their ability to modify the order in the future. This could also lead to fewer amicable divorces and a greater amount of conflict since the option of mediating a child support agreement outside the guidelines is no longer encouraged.

Contact Us

As the child support landscape changes in Texas, it’s important for single and divorcing parents to seek skilled family law assistance in their cases. The office of Stewart Law PLLC brings more than eight years of experience in family law to its clients. Call our office in Baytown at (281) 420-8020 or use our online contact form to email our family law attorney. Our initial consultation is a reduced fee of $50, and we accept credit card payments and payment plans.

What to Keep in Mind When Considering a Divorce

How to Determine If Divorce Is Right for You

If you are currently in an unhappy marriage and are thinking of filing for divorce in Texas, there are some things that you may want to consider. Divorce is very common in the United States, which is displayed by the fact that around 40-50 percent of all married couples will eventually obtain a divorce. In the event that you do decide that a divorce is right for you, our divorce attorneys will be able to help you through the process.

Have You Tried to Make It Work?

Deciding to file for a divorce is a very personal and major life decision to make, which is why you may want to ask yourself if you’ve tried to make the marriage work. There are times when it’s possible to save the marriage. One of the primary methods used in an attempt to save a marriage is marriage counseling, which could help you and your spouse pinpoint fixable problems in your relationship. However, both spouses will need to agree to attend counseling with a professional marriage counselor.

Custody of Minor Children

Have You Considered the Costs?

One of the biggest considerations to keep in mind before filing a divorce is the costs associated with doing so. Assets may have to be divided, and you may need to consider what types of costs you will need to pay during and after the marriage. If you currently live in a house that is owned by your spouse, will you be able to afford renting an apartment or putting a down payment on a new house? If you have children, will you be able to afford taking care of them on your own? Since there will invariably be a large amount of after-divorce expenses that you will be tasked with paying, it’s important that you try to budget for these expenses before you even file for a divorce.

Have You Thought About Child Custody?

One of the more contentious aspects of a divorce is child custody. In most cases, the best option for child custody is to find an arrangement that both parties can agree to. If it’s proving to be impossible to come to some form of an agreement, the court will make a decision about the type of arrangement they believe to be the best-case scenario. One aspect to consider about child custody is that there will invariably be numerous extracurricular events or school activities that your children will participate in over the years, which are events that both parents might want to partake in. As such, consider addressing this in the final child custody agreement.

Starting the Divorce Process

When you have considered all of the aforementioned points and believe that it’s time to file for a divorce, the first step in this process involves the filing of a petition, which must be filed by at least one spouse in court. This petition will identify what the grounds are for the divorce in question, which is something that a lawyer will be able to assist you with. Once the petition has been formally filed, you can continue along the remainder of the process.

During this time, you may want to consider mediation, which is a divorce option that allows the case to be settled with a third-party mediator as opposed to being taken in front of a judge. This option is primarily used by couples who are able to agree on most or all aspects of the divorce, which extend from child custody agreements to the division of property. If you believe that any of these points will be contested, our divorce attorneys will be able to help guide you through the divorce proceedings and handle every aspect of the case for you.

Call Today

If you feel as though divorce is the best option for you, give us a call to schedule an appointment with our divorce attorneys in Baytown. We can be reached at (281) 420-8020.

Comprehending Child Custody in the Divorce Process

What You Need to Know About Child Custody Laws

While few couples embark on life’s journey together with the expectation that their marriage will end prematurely, the American Psychological Association notes that 40 to 50 percent of marriages will result in divorce. If you and your partner have chosen to separate from each another, make sure you understand what your rights and obligations are regarding child custody. Here are some things you should understand.

Who Gets the Kids?

One of the first questions to be brought up during the divorce process is which parent the children will be staying with. If you and your partner both want to remain actively involved in raising them, you may find that joint custody works well; however, many couples find that sorting out the details of where the children will live and go to school can be tricky.

Custody of Minor Children
If you and your spouse cannot come to an agreement on how you’d like to divide your children’s time and care, you may experience a custody dispute. In cases where there is a custody issue that cannot be settled by the individuals involved, a family law attorney may be able to offer guidance and assistance.

During a divorce, going to court is sometimes necessary to resolve certain problems. If you and your partner simply cannot agree on who will have custody of the children or how to arrange visitation, the court may be required to decide these issues. Your divorce lawyer can advise you as you prepare to meet with a judge who can settle your dispute and determine how custody will be shared.

Types of Custody

Settling on custody arrangements for a child involves more than just choosing where the little one will spend his or her weekends. Did you know there are different types of custody? You and your partner will quickly discover that you’ll not only need to arrange for the physical custody of your child but also the legal custody.

Physical custody determines where a child lives. For example, if your child lives with you one week and your former partner the next week, you will have shared physical custody. If your child lives only with you and does not see your former spouse, you will have sole physical custody. Note that when physical custody is shared, one parent may still be the primary caregiver.

Legal custody may also be shared, but one parent is sometimes awarded sole legal custody. This type of custody includes more than just where the child resides. Legal custody includes the power to make medical decisions for the child, the ability to determine the child’s religion and the power to choose where the child attends school. Even if you are awarded sole physical custody, you and your partner may still be awarded joint legal custody. This means that even if your child doesn’t live with the other parent, your former partner may have a say in how the youngster is raised.

How an Attorney Can Help

If you’re going through a divorce, you know that emotions can quickly become unruly. Whether you were married for two months or two decades, it’s possible to have a difficult time communicating effectively with your former partner. A family law attorney understands this, which is why it’s important to seek assistance from a lawyer who can help facilitate communication while simultaneously informing you of your rights and obligations. The lawyer you retain can also assist you with paperwork, documentation and legal representation if you need to appear in court.

Remember that support is available. You don’t have to face divorce on your own. In fact, you shouldn’t. Our team is ready to assist you through the entire process, including dealing with disputes regarding physical and legal custody of the children. Stewart Law is prepared to handle your case as you move through this challenging period and on to the next stage in your life. To arrange an initial consultation at our Baytown office, please call us at (281) 420-8020 or contact us by email. We’d be happy to answer your questions and discuss your options.

 
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