Couples who have finally finished the often-rigorous process of getting divorced often have one thing in mind: get out and start anew. But while it’s certainly important to start finding some semblance of normalcy as quickly as you can after a divorce, acting too hastily may have unexpected repercussions for the future—especially when it comes to your finances.

Many divorced spouses often underestimate the impact their separation can have on their retirement. Below are 4 steps to protect your retirement assets during a divorce.

Decide What Happens to Your Retirement Plans

The Internal Revenue Service needs a Qualified Domestic Relations Order (QDRO) to divide the amount in a retirement fund between two former spouses. This document is a court order determining how your retirement assets will be divided, and is also typically presented to your retirement plan provider.

Executing a QDRO can be complicated, and unfortunately, many divorce lawyers don’t fully understand the process. It helps to consult the advice of a financial advisor and hire a divorce attorney familiar with this aspect of your case. Your attorney can tell you about all its nuances and rules, especially the fees, which can be obscenely high if you make a mistake in filing.

Change Your Beneficiaries

Thought your new will covers your retirement accounts? Think again. You should still change your beneficiary designations on all your retirement plans. Unfortunately, many divorced spouses make this all too common mistake, thinking their last will and testament takes care of everything.

Changing your beneficiaries is especially important if you named your former (or soon-to-be) spouse as one of them. Despite your divorced status, your ex will still inherit your retirement money upon your death if it says so in your account. And even if your spouse respects your wishes and gives the money to your kids, he/she can be liable for a tax payment for doing so.

Bottom line? Get your lawyer to execute this simple legal document.

Go Over Your Social Security Benefits

You can receive a portion of your former spouse’s Social Security benefits if you were married to your spouse for at least 10 years prior to the divorce. Now is a good time to compare your Social Security benefits with your ex’s, because you can only claim either one.

And if you decide to remarry, doing so before you turn 60 voids any chance you have of collecting your ex-spouse’s Social Security benefits.

Review Your Investment Portfolio

Now would also be a good time to look at your investment accounts and reevaluate your risk tolerance. There are many instances when a person’s risk tolerance for investment matches that of their spouse. Your risk tolerance may also be more aggressive due to the higher combined income you share with your spouse. As someone who’s single once more, your investment options now need to consider your current income, current savings, profession, and likely future.

Everyone knows divorce can take an extreme toll on your stress levels and emotions, but many people fail to grasp how big of an impact a separation can have on their future retirement. If you’re not sure how to secure your finances, talk to a qualified divorce attorney.
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Medical advancements are adding decades to the average human lifespan, extending it by around 30 years. Of course, this is fantastic news in terms of self-fulfillment and productivity. However, with longer lifespans comes the unprecedented increase in divorce rates in the later years of our lives.

Such separations are often referred to as “gray divorces,” and while the overall divorce rate has begun to decline and stabilize, these late-life divorces see the opposite. And the reasons for this spike are largely unsurprising when you stop to give them serious thought.

Reduced Stigma of Divorce a Contributor?

For one, long-term relationships tend to become more challenge to maintain later on in life. Pair this with our newfound longevity and the dwindling stigma surrounding divorce, and the remarkable increase in gray divorce no longer seems so shocking. Another potential reason is that marriages by this age tend to be the second, third, even fourth for many Americans, and remarriages are sociologically accepted as a contributing factor.

And at this point in the lives of seniors, many of them feel that they’ve done their part—earned their money, got their promotions, put their kids through school. It’s easy to start thinking that the milestones and functions of married life have been lived fully.

But whatever the reason for getting a gray divorce, like all things, it comes with its fair share of benefits and dangers.

Writing for the New York Times, Katie Crouch narrates the positive changes in her family life after her mother divorced at the age of 72. She recounts that her 4-year-old daughter found herself in high demand and at the center of attention, receiving constant phone and Skype calls from her grandparents.

But then there’s the darker side, which mostly has to do with your finances.

Increased Risk of Poverty

First, there is an elevated risk of poverty for senior citizens, who tend to face greater difficulty and higher hurdles in establishing and maintaining their footing in the corporate world. This is especially alarming when you factor how 1 in 3 Americans have not saved a single dollar for retirement.

Dangerous for Housewives

Perhaps no one is more heavily hit by a gray divorce than the housewife, who would have no retirement plans to augment her alimony. Even women who just took time off from work to focus on domestic life are vulnerable to financial difficulty.

Gray divorced housewives face greater difficulty paying for the divorce proceedings and looking for work after years of being at home. This underscores the need for married women to be proactive in securing their personal finances while they still can.
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While many divorce attorneys in Texas know the Lone Star State observes community property laws, many lawyers erroneously believe this extends into a similar concept called “community debt.” This is simply not true.

Yes, divorced couples are liable for any property acquired during their marriage, but these laws don’t apply to debt incurred during your union with your spouse, save for a few very specific exceptions.

In this guide, we answer a few questions about community property law, clearing up misconceptions about community debt in the process.

What is Community Property?

Texas, which observes community property laws, treats all assets acquired during the marriage as equal conjugal property. This means that any property acquired by either spouse is shared and subject to property division proceedings during a divorce.

Only under specific conditions can one spouse prove a certain asset is a separate property, which includes property owned by one spouse before the marriage, or property inherited or received as a gift.

What is Community Debt?

Community debt is a false concept that takes the provisions of community property laws, applying them to debt inquired by the couple during the course of their marriage.

Essentially, the community debt concept makes the wrong assumption that any debt incurred by either spouse during their marriage is shared debt. So, if you are debt-free but your spouse incurred credit card debt while you were married, you are supposedly liable for paying off that debt after getting divorced, which again, is not true.

However, there are very specific kinds of debt that a spouse may be liable for.

What Kinds of Debt are Divorced Spouses Liable for?

Texas law requires each spouse to support the other. For example, spouses are liable for providing each other necessaries, be it food, clothing, or shelter.

According to Texas Family Code §3.201, a person can be held liable for the debt of his or her spouse only if that spouse incurred a debt while acting “as an agent for the person” and incurred “a debt for necessaries.” A person, however, is not automatically considered an agent of his or her spouse due to marriage.

What About Debt Incurred Together as a Couple?

Yes, couples can incur joint and several liability for debt acquired together as a couple. During divorce proceedings, the court generally takes a hands-off approach to avoid affecting the rights of the creditor for joint and several liability of debt.

For example, if both spouses are on contract for paying a credit card account, even if the court rules during divorce proceedings that one spouse should shoulder the burden of making all further payments, both parties are actually still jointly and severally liable for said debt.
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Texas county clerks with “sincerely held” religious objections may now delegate the task of issuing same-sex marriage licenses to other officials. According to state Senator Brian Birdwell, Texas Senate Bill 522 institutes a “statutory balance between the religious liberties of marriage-certifying officials and the rights of all couples to marry,” thereby creating an effective middle ground for the contrasting civil liberties in question.

SB 522 provides that county clerks may lend licensing authority to a “certifying official,” allowing them to produce a marriage license in their place. The bill requires that the concerned county clerk must notify the commissioners court of “sincerely held religious beliefs” that may go against their function and office.

These substitute officials may include an available judge, deputy clerk, or magistrate who is willing and able to certify the marriage license application, administer the oath, as well as the actual issuance of the marriage license.

Likewise, the bill prohibits action against officials who recuse themselves from their functions, stating that, “a civil cause of action may not be brought against the person based on the person’s refusal to conduct the marriage ceremony.” This provision effectively protects officials from administrative and civil penalties for refusing to administer these marriage licenses.

To prevent the possibility of same-sex couples facing additional obstacles after a state official delegates the task of issuing a marriage license, State Sen. Sylvia Garcia (D-Houston), amended the bill: “A commissioners court of a county in which the clerk has made a notification under Subsection (a) shall ensure that all eligible persons applying for a marriage license are given equal access to the process and are not subject to undue burden due to the county clerk’s refusal to certify the application for a marriage license, administer the oath, and issue the license.”

The amendment comes in response to the actions of Texas Attorney General Ken Paxton, who defied the Supreme Court’s decision legalizing same-sex marriage. In an advisory released to county clerks and judges, Paxton suggested that they may refuse to issue same-gender union licenses on the grounds of religious freedom, which in effect, places a burden on gender-deviant couples looking to get married.

The State Bar of Texas has made no disciplinary action on Attorney Paxton in spite of the ethics complaint filed against him by over 200 attorneys.

The seemingly tolerant move was not met with resounding applause from gender equality advocates, however.

Equality Texas, an Austin-based nonprofit supporting equal gender rights, asserts that the bill authorizes employees in public office to discriminate based on religious convictions, ultimately permitting them to cite religion as a basis for further discrimination.

Texas Freedom Network President Kathy Miller believes that the bill not only condones discrimination against same-gender couples but also “against virtually any Texan,” including previously divorced as well as interfaith couples.
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Divorces are rarely not messy. What was once a happy a marriage can spiral into a hurricane of emotions, accusations, revelations, and alimony checks. This can create ripples across each spouse’s circle of family and friends. And in many ways, the rise of social media has only made divorces even more complicated.

Couples who just filed for divorce or are newly-divorced are especially vulnerable to social media misuse, with some cases leading to consequences as serious as losing child custody.

The key to avoiding this is knowing a few important social media dos and don’ts that apply both in the online and real world.

Don’t Embarrass Yourself Online

You see someone cute at work, go for a night out with your friends, or find yourself a new lover shortly after your divorce, and your first impulse might be to post about it on your online page. Resist. If you’re in the middle of a divorce, your spouse’s lawyer probably has a magnifying glass on you right now, and every move and statement you make can be construed against you.

That means a simple group picture of a night out with friends is now fodder for the opposing counsel to question your parenting skills. Post wisely, or child custody and spousal support could be on the line.

Don’t Continue Using Social Media as Your Personal Journal

A divorce can take a massive emotional toll on anyone, with the slightest mistake and frustration ruining your day. Further complicating this is how many people have the habit of expressing their troubles and frustrations on Facebook or Twitter, which, as previously mentioned, can come right back and hurt your case unnecessarily.

If expressing yourself is cathartic, now may be the perfect time to visit a bookstore and pick up a journal. Let your frustrations and discoveries out on paper where no one else can see and take them against you (although personal journals can be subject to discovery – ask your lawyer). Remember to keep your frustrations and rants private.

Don’t Expose Your Ex

Having married your spouse, it’s only natural that you know about secrets about that person. In times of anger and agitation, you could be tempted to rage, go online, and shame your ex for everyone to see. But in situations like this, it’s best to seek the moral high ground.

From a more practical standpoint, remember that your spouse also knows things about you that you wouldn’t want to be shared online. So it might be better to hold your peace than cast the first stone.

The safest and quickest thing to do during a divorce is to deactivate your social media accounts—at least until the divorce proceedings are finished. Not only does this prevent you from making a mess online, it makes your online history unavailable for research, and protects you from viewing provocative posts yourself.
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Reversing the previous decision of a lower court, the Texas Supreme Court ruled that under the Texas Occupations Code, licensed family and marriage therapists can diagnose the mental, behavioral, and emotional problems of their clients, provided their assessment falls under their expertise. Among other things, the decision allows family and marriage therapists to provide diagnostic assessments to couples going through a divorce, or spouses with troubled marriages.

Justice Jeffrey S. Boyd delivered the High Court’s decision on February 24, reversing an earlier ruling by the Third District Appeals Court done in favor of the Texas Medical Association.

The decision originates from a 1994 rule passed by the Texas State Board of Examiners of Marriage and Family Therapists, which permitted marriage and family therapists (MFTs) to offer “diagnostic assessment which utilizes the knowledge organized in the Diagnostic and Statistical Manual of Mental Disorders (DSM)…as part of their therapeutic role to help individuals identify their emotional, mental, and behavioral problems when necessary.”

Curated and published by the American Psychiatric Association, the DSM is the universal reference system for diagnosing mental health disorders in the U.S. and in many countries around the world. According to the Therapists Board, the ability to conduct diagnostic analyses through the DSM is at the heart of an MFT’s practice and services.

For example, diagnostic assessments play a crucial role in an MFT’s ability to:

Diagnose a client’s mental health problems
Develop a plan of treatment
Determine suitable treatment services
Provide recommendations to treatments with other health professionals

In 2008, the Medical Association disagreed with the rule and sued the Therapists Board and its directors. In its push for a court to invalidate the rule, the Association argued that allowing MFTs to conduct diagnostic assessments also allowed them to practice medicine without a medical license.

But the Board argued the rule specifically prohibits MFTs to provide medical diagnoses, or any other kind of diagnoses, outside their expertise. Rather, it permits MFTs to diagnose a number of nonmedical mental disorders related to psychological issues and experiences, such as, but not limited to:

Mood disorders
Depression
Anorexia
Bulimia
Anxiety
Behavioral disorders
Personality disorders
Addiction

The Travis County District Court ruled in favor of the Medical Association, invalidating the diagnostic-assessment rule on the grounds of exceeding the scope of the Therapists Act.

The Texas Supreme Court, however, saw otherwise. Justice Boyd considered the arguments raised by the Therapists Board, particularly the claim that the appeals court decision “makes Texas the only state to prohibit Licensed MFTs from performing an integral part of their profession that is essential to their ability to properly treat their clients.”

Boyd also refuted the Medical Association’s claim that the rule allowed MFTs to diagnose all kinds of mental disorders with no limits.
“(T)he rule itself specifically states that MFTs may only make diagnostic assessments ‘as part of their therapeutic role to help individuals identify their emotional, mental, and behavioral problems when necessary.’ Another Therapists Board rule explicitly limits an MFT to services ‘within his or her professional competency,’” the ruling reads.
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Aside from the heavy toll on your emotions, a divorce also raises a number of issues concerning your finances. For many married couples, the family home is often their most expensive asset, so it’s no surprise why dividing a home’s value, or at the very least agreeing on what to do with it, can be a prickly affair. And with the ending of your marriage, the family home can turn into a place neither of you may want to continue living in afterward.

If this problem is something you’re dealing with right now, below are a few options to choose from to resolve the issue of the family home.

Let One Spouse Keep the House

There are cases where one of the parties will want to continue living in the family house. Perhaps they don’t want to let go of the place they call home, or know that keeping their residence is the most convenient option.

Option 1 – Your Spouse Keeps the Home
In any case, if you or your soon-to-be ex-spouse decides to keep the house, one of you will have to be released from the liability of paying the mortgage. This means executing the proper documentation.

Option 2 – You Keep the Home
On the other hand, if you’re the one who keeps the house, you can either continue under the same mortgage terms or refinance the mortgage to get better rates. You also need to have documents drafted to remove your soon-to-be ex-spouse’s rights to the home;

No One Keeps the Home

This means both spouses agree to sell off the home and split the proceeds. If you haven’t been married for very long or just recently moved into the house, you’re probably still paying the mortgage, which means you’re still liable for making payments, even after dissolving the marriage

If you and your spouse can agree on it, selling the house is usually the most expedient and cleanest option for dividing the property. You can then use the proceeds from the sale to pay off your mortgage, allowing you to move on from any payment liabilities and start life anew. Depending on how much you earned from the sale, you can also use the proceeds to pay off any conjugal debt you might have.

Take note, there are no guarantees that you can sell the home at a profit. Your home’s value will depend on several market factors, including the condition of the house, the neighborhood it’s in, and the general real estate outlook in your city or county.

Deciding to end a marriage is always hard, and dealing with the fallout is even harder. It’s best to plan ahead for what happens after the divorce, especially in matters that deal with money and property.
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Reversing the previous decision of a lower court, the Texas Supreme Court ruled that under the Texas Occupations Code, licensed family and marriage therapists can diagnose the mental, behavioral, and emotional problems of their clients, provided their assessment falls under their expertise. Among other things, the decision allows family and marriage therapists to provide diagnostic assessments to couples going through a divorce, or spouses with troubled marriages.

Justice Jeffrey S. Boyd delivered the High Court’s decision on February 24, reversing an earlier ruling by the Third District Appeals Court done in favor of the Texas Medical Association.

The decision originates from a 1994 rule passed by the Texas State Board of Examiners of Marriage and Family Therapists, which permitted marriage and family therapists (MFTs) to offer “diagnostic assessment which utilizes the knowledge organized in the Diagnostic and Statistical Manual of Mental Disorders (DSM)…as part of their therapeutic role to help individuals identify their emotional, mental, and behavioral problems when necessary.”

Curated and published by the American Psychiatric Association, the DSM is the universal reference system for diagnosing mental health disorders in the U.S. and in many countries around the world. According to the Therapists Board, the ability to conduct diagnostic analyses through the DSM is at the heart of an MFT’s practice and services.

For example, diagnostic assessments play a crucial role in an MFT’s ability to:

Diagnose a client’s mental health problems
Develop a plan of treatment
Determine suitable treatment services
Provide recommendations to treatments with other health professionals

In 2008, the Medical Association disagreed with the rule and sued the Therapists Board and its directors. In its push for a court to invalidate the rule, the Association argued that allowing MFTs to conduct diagnostic assessments also allowed them to practice medicine without a medical license.

But the Board argued the rule specifically prohibits MFTs to provide medical diagnoses, or any other kind of diagnoses, outside their expertise. Rather, it permits MFTs to diagnose a number of nonmedical mental disorders related to psychological issues and experiences, such as, but not limited to:

Mood disorders
Depression
Anorexia
Bulimia
Anxiety
Behavioral disorders
Personality disorders
Addiction

The Travis County District Court ruled in favor of the Medical Association, invalidating the diagnostic-assessment rule on the grounds of exceeding the scope of the Therapists Act.

The Texas Supreme Court, however, saw otherwise. Justice Boyd considered the arguments raised by the Therapists Board, particularly the claim that the appeals court decision “makes Texas the only state to prohibit Licensed MFTs from performing an integral part of their profession that is essential to their ability to properly treat their clients.”

Boyd also refuted the Medical Association’s claim that the rule allowed MFTs to diagnose all kinds of mental disorders with no limits.
“(T)he rule itself specifically states that MFTs may only make diagnostic assessments ‘as part of their therapeutic role to help individuals identify their emotional, mental, and behavioral problems when necessary.’ Another Therapists Board rule explicitly limits an MFT to services ‘within his or her professional competency,’” the ruling reads.
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As a business owner, you’re probably used to tracking a wide range of risk factors, whether it’s your competitors, technology, supply and inventory costs, marketing, and churn among others. However, have you stopped to consider the damage a divorce can do to your business?

If you’re managing a family-owned business together with your spouse, a separation can be put the fate of your company in jeopardy. And for couples that have their entire net worth tied to their business, a divorce can easily be the ruin of their financial health, leaving them with insufficient cash to buy each other out.

Depending on the circumstances of your divorce, you may have to keep the business up and running and split profits, which may not be an option for ex-spouses who have parted on bad terms. Another option is to shut down the business entirely and split the assets, or sell the business and split the selling the price.

But it doesn’t have to be this way, not when you have a number of options for protecting your business.

Get a Prenuptial if You Can

Although it has a pejorative aspect, a prenuptial agreement before your marriage can help save your business by specifying what happens to the company should your marriage end in a divorce. When done right, prenups can be airtight, protecting your company from property-division laws, even in community property states like Texas.

An ironclad prenup should have the following characteristics:

The agreement comes in a written document
It’s executed voluntarily before witnesses
It has full disclosure from both spouses (i.e. cannot be unconscionable)

Use a Trust to Protect Succeeding Generations

It takes foresight, but one of the best ways to protect your family’s wealth in the long term is by using a trust, which will protect the next generation of your family should any of them go through a divorce.

For example, if a father gives his son shares in the family business worth $2 million, this amount can be placed in a trust accessible to him and only him. Should he marry and remarry in the future, his spouse cannot touch this money, even during a property division battle.

Stay Together for the Business

One of the simplest solutions to managing a business during a divorce is to remain as co-owners, even after dissolving the marriage. This, however, is easier said than done, as many divorcing couples are locked in emotional battles and cannot stand the sight of each other, much less run a business together. Still, this option is worth considering if you and your ex-spouse parted on amicable terms and can agree to “stay together” for the company.

You’ll often hear many businesspeople say that business is business, even when family is involved. But when it comes to divorce, the lines between family and business can get blurry.
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Many people entering a divorce often don’t have a full understanding of just how expensive the process of separating from their spouse can be. Even if you’re divorcing under amicable circumstances, if you’re careless and don’t take care of your finances, your soon-to-be ex-spouse could make a serious impact on your long-term financial health.

If you’re going through a divorce, it’s understandable that you wouldn’t want to deal with complicated financial matters in the middle of an emotionally draining time of your life. However, you cannot afford to detach yourself from these issues and have someone else decide the future of your finances. If you want to retire with your savings and pension intact, follow these strategies.

Gather As Much Documentation As You Can

Being prepared with sufficient documentation is half the battle in property division. The side with the most paperwork and records at their disposal is often the one that walks away having protected their interests. At the very least, you should have three to four years’ worth of financial statements, whether from individual or joint accounts.

If your soon-to-be ex were to make a large purchase using your joint account before the divorce is final, any documentation you have will allow your lawyer to include the purchase in the property division process.

Know the Ins and Outs of a QDRO

A Qualified Domestic Relations Order (QDRO) is a document that splits and changes the ownership of qualified retirement plans like pensions and 401(k)s. The approval of a QDRO is notoriously complex, and if an administrator like Vanguard or Fidelity Investments handles your investment plan, tiny mistakes (such as using “and” instead of “but” and vice versa) in processing a QDRO can lead to exorbitant fees, not to mention having to start the process all over again.

Get an Experienced Divorce Lawyer

Even if you’re separating from your partner under the best of circumstances, it’s still a good idea to have a skilled divorce lawyer by your side to help you protect your finances. A lawyer can help prevent you from making the most common financial mistakes divorcing couples make, which will be a godsend in cases where the divorce is tumultuous, or where your ex is making unreasonable demands in terms of alimony or asset division.

Get a Financial Planner

While your divorce lawyer can certainly help protect your finances, financial planners live and breathe numbers. They understand taxes, interest rates, fees, and actuarial calculations in ways most divorce lawyers don’t. Having a financial planner working with your attorney can expedite the process of dividing assets and ensure you’re on top of your future tax and credit obligations. Lastly, a financial planner will protect your credit score during and after the divorce, preventing your former spouse’s financial decisions from affecting your ability to take on loans in the future..
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