In 2017, National Defense Authorization Act (NDAA) made a radical change to the way states divide the military pensions of divorcing spouses. Before the NDAA, states had the discretion of dividing pensions of divorcing military personnel as they saw fit. Now, the federal government has not only imposed significant restrictions, it has also changed the military pension division rules of 45 states.

Historically, these states divided military pensions using the Time Rule Formula as stated under the Uniformed Services Former Spouses’ Protection Act (USFSPA) of 1982. The formula has been the source of criticism in the past because it allows the ex-spouse to benefit from any increases in rank and time-in-service pay of the military member long after the couple ended their marriage.

Let’s suppose a couple divorces while the military member spouse is an Army Captain with four years of service—all through which the couple were married. Under the old rule, the divorce court could award the service member’s wife 50 percent of his pension and base the corresponding dollar amount not on the husband’s rank at the time of the divorce (i.e. Captain) but the rank at the time he retires. Let’s assume again that spouse rises to the rank of Army Colonel and retires after 20 years of service. Even if the service member divorced his spouse 16 years ago, she would still collect the retirement benefits the Colonel earned with 20 years of service.

Moreover, this award was irrevocable. Even if the military service member were to remarry and stay married to another spouse for the next 20 years, the first spouse would still be entitled to half of his military pension.

The NDAA, on the other hand, implements what’s known as the “Frozen Benefit Rule,” rewriting the USFSPA and stating that a service member’s rank and number of years spent active are “frozen” at the time of the divorce. So, using the same example above, the new rule would limit the share of retirement benefits the non-military spouse can collect to 50 percent of the service member’s pension as a Captain with four years of service. It cannot be based on the total value of his pension at the time that he retires with a higher rank and more time-in-service pay.

This rule, however, is not retroactive, applying only to divorces finalized after the NDAA was signed into law.

What Does This Mean for Military Divorce in Texas?

Nothing. The frozen benefit rule is already in effect in five states, namely Florida, Kentucky, Oklahoma, Tennessee, and Texas. The NDAA applies to all military personnel in the service, including the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration (NOAA), and Public Health Service’s Commissioned Corps.
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As 2019 rolls in, divorced individuals will have no choice to but to bid farewell to alimony tax rules that have been around for decades. Under a new tax code—made possible by the Tax Cuts and Jobs Act (TCJA) of 2017—that takes effect on January 1, alimony payments will no longer be considered tax-deductible for the spouse paying alimony and taxable income for spouse receiving spousal support. These new rules take effect after December 31, 2018 and will not affect existing divorces and separations.

Overall, it looks like spouses will end up pocketing less cash from alimony payments, whether they’re the ones paying or receiving money. But there are ways to make up for this.

Tax Benefits from Selling the Home

If you are getting divorced and thinking of keeping the family home, see if you can qualify for any tax benefits. The best option might be to sell the home to take advantage of a capital gains tax exclusion of up to $250,000 if you’re single and up to $500,000 if you are still married and filing jointly. So, it may be in your best interest to sell the property before the divorce is finalized.

Take Advantage of Child Tax Credits

Under the new tax code, the Child Tax Credit (CTC) amount awarded to parents will see a significant bump next year, raised to $2,000 per qualifying child—up from $1,000 under the current rules. So, if you’re negotiating for child custody, you can use plan ahead and use the CTC to offset alimony taxes.

And this part is important. If you are the parent of three children under the age of 17 and make $100,000 as a divorced spouse (the CTC is unavailable to individuals making $200,000 a year and couples earning more than $400,000), you qualify for $6,000 of tax credits. This makes the CTC more powerful than a tax deduction as it reduces your tax bill dollar-for-dollar.

Consider this situation: You’re a mother of three who owes the $4,000 to the IRS for the previous tax year. But you also qualify for a tax credit of $2,000 for each of your three children, which means you no longer have to pay last year’s taxes.

Look to Other Payment Methods

Spousal maintenance payments don’t have to be in the form of traditional alimony. For example, couples can consider property division payments instead of alimony.

If the couple’s marital estate is worth $2 million, they can agree for one spouse to pay the other $1 million in staggered payments. The benefit? Property division payments are non-taxable.

But this option isn’t perfect either. If the spouse paying property division files for bankruptcy, the property division payments could very well go away. In contrast, alimony payments are not dischargeable in bankruptcy.

What if You Beat the December 31 Deadline?

To be honest, if your divorce proceedings began during the last few months of the year, you’re probably too late. For example, if you had filed for divorce in November, it’s very likely you won’t get a judgment until next year.
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While it may seem farfetched to say that social media is the direct cause of broken relationships, according to a 2013 study published in the published in the Journal of Cyberpsychology, Behavior and Social Networking, individuals who spend more time on Facebook are more likely to “experience Facebook–related conflict with their romantic partners,” which could then lead to a divorce.

Speaking with Vox, divorce attorney James J. Sexton notes that social media is a huge factor in a growing number of divorces and separations, adding that he can’t remember a case where social media was not the cause or, at the very least, implicated in some way. The pattern with social media, he says, is consistent: spouses maintain affairs on sites like Facebook or communicate with people they know they shouldn’t.

In other words, Sexton believes that social media has made infidelity easier than ever.

But there are other, subtler, reasons why social media can be dangerous to marriages.

Jealousy and Anger

If you’re in a relationship, you’ve probably, at some point, felt jealous about your partner’s behavior on social media, whether it’s because of the content they ‘like’ on Facebook or Instagram, or their interactions with other people.

And for what it’s worth, your suspicions may not be completely unreasonable, as one survey notes that one in ten adults admits to hiding messages from their partners. Furthermore, eight percent of adults in relationships admit to keeping a secret social media account.

These threats are so real that 14 percent of adults scour their significant other’s social media profiles for signs of impropriety and other questionable behavior.

Excessive Facebook Use

But it’s not just what people do on social media that causes conflict in relationships, it’s also how much time they spend online. More and more people are reporting that their partner’s excessive time spent on social media has negatively affected their romantic relationships.

A study, published in Computers in Human Behavior 22, compared divorce rates between states to Facebook accounts per capita and found a connection between time spent on the social networking site and a decline in marriage quality. In fact, a 20 percent increase in time spent on Facebook over a year was associated with a 2.18 percent to 4.32 percent increase of divorce rates.

The study’s model derived from the individual survey results also predicts that people who avoid social media are up to 11 percent happier in their marriages than people who are on social media all the time.

Social Media Only Complicates Existing Problems

Others, however, argue that social media isn’t so much the cause of separations, as it as a platform that amplifies known issues in marriage, such as distrust, infidelity, and jealousy among others.
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Even under the most amicable circumstances, getting divorced can be tough—more so if you have children. Even if you think your separation is for the best, your children may not see it that way. It’s not surprising then why research tells us that the best way to protect the well-being of your children during a divorce is to keep the process as low-conflict as possible.

For some parents, the solution that works for them is “nesting,” sometimes called “birdnesting.” 

What Is Nesting?

Nesting is the practice where parents keep the family home intact and rotate living with their children. This also means that both parents take turns living in separate residences when they’re not “at home” with the kids.

The idea behind nesting is that it ensures that the children’s lives continue to be as normal as possible. They don’t have to be uprooted from their home and they still get to spend time with both parents. But while nesting sounds like a great thing on paper, there are serious issues that you should be aware of if you’re considering this arrangement.

Accounting, Property Division, and Spousal and Child Support

Nesting presents potential legal issues. For starters, some states may not consider spouses ‘divorced’ if they engage in the practice of nesting. This, in turn, could throw a wrench in the terms of their property division and child/spousal maintenance orders.

Another problem that may arise from sharing a home in a nesting arrangement is the issue of who owns the property. There’s going to be quite a bit of accounting to be done, including figuring how to share the mortgage and upkeep expenses, deciding who will take the mortgage interest deduction, and deciding tax liability when it’s time to sell the home.

Financial Burden

You also need to consider just how expensive nesting can be. Aside from child support and alimony, you also have to deal with the cost of maintaining two separate residences, which can be too much, even for wealthy families.

It’s for this and other reasons that nesting should only be done on a short-term, transitionary basis. Anything beyond six months will be impractical and may end up confusing the children instead of putting them at ease. It may lead them to believe that reconciliation may happen in the near future.

Only Works If Both Parents Are on Good Terms

Another reason nesting should be done on a short-term basis is because it can create opportunities for the kind of conflict that caused you and your spouse to divorce in the first place. If you can’t agree to set aside your differences and put the children first for a few months, a nesting arrangement will stand on shaky ground.
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One of the more unexpected effects of going through a Texas divorce is one spouse losing his or her health insurance coverage once the divorce becomes final. Given how expensive healthcare is, it’s important to be mindful of this consequence after a divorce, especially if you are currently under your spouse’s health insurance plan.

If you’re presently employed, the most sensible thing to do is move to your company plan—premiums are low and deducted from your payroll, which means you also get a tax break. The appeal of company health insurance is why many at-home spouses seek employment or look for associations that offer group health insurance plans after a separation.

But what if you can’t do either? Below are a few options to choose from.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allows individuals to keep their health insurance coverage for a specific period provided a qualifying event, such as a divorce, happens. COBRA is particularly useful for individuals who are part of their spouse’s company health insurance, as a divorce—no matter how amicable—automatically terminates the dependent spouse’s coverage.

This is where COBRA comes, applying to employer health insurance groups with at least 20 employees. If you are in the middle of a divorce, you can use COBRA to remain under your ex-spouse’s health insurance plan for up to three years. The key, however, is to fill up and return COBRA enrollment forms within 60 days of receiving an eligibility notice—missing the deadline forfeits this option.

State-sponsored Continuation of Healthcare Coverage

Texas and some other states allow individuals who are not eligible for COBRA or have exhausted their COBRA coverage to avail for of state-sponsored healthcare coverage continuation—a perk often called mini-COBRA.

In Texas, the following rules on coverage continuation rights apply:

Dependents can stay covered under their ex-spouse’s employer’s health plan for up to nine months if they are not eligible for COBRA.
Depends who have exhausted their COBRA coverage can seek state-sponsored continuation for six more months after their COBRA continuation ends.

When in doubt, check with your state’s department of insurance and the company’s human resources to go through the finer details of this setup.

Affordable Care Act (ACA)

You also have the option of buying individual health insurance under the ACA instead of going through a group-based plan. You can purchase your plan through the government exchange or off-exchange directly through a health insurance provider or broker. Either way, individual plans are guaranteed issued free of any underwriting or exclusions for pre-existing conditions. Benefits are also more robust than ever—a big reason behind why many people get healthcare coverage under ACA after losing group coverage.
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According to the Internal Revenue Service, if you have a capital gain after selling your primary home, you may be entitled to a $250,000 tax exclusion on your return. In fact, if you a file a joint return with your spouse, you can exclude up to $500,000 of the return from your income. But what if you and your spouse are in the middle of a divorce but continue to live in the marital home? What happens when you make the decision to finally sell the house?

Background on Capital Gains Home Exclusion Rules

The general rule, as per the IRS, is that spouses have a right to exclude from taxes any profits made from the sale of a primary home, provided they meet two main conditions:

The married couple used the property as their primary home for two out of the last five years
The profit from the sale does not exceed $500,000

If you’re single, the rule of using the home as a primary residence for two out of the last five years still applies. The exclusion however, is slashed by half and is now only $250,000.

Of course, there are other rules on excluding home sales from taxes, but the two above are the most important ones.

What About Divorced Couples?

For divorced spouses, the key is whether one or both parties will continue to live in the home and treat it as the primary residence. If both spouses are in compliance with the home ownership rule and take advantage of it, they should be able to exclude a total of $500,000 from the profit of their sale from federal taxes if they file jointly and up to $250,000 if separately.

But things can change as the divorce progresses. If the divorce has yet to be finalized, you can still continue to file joint tax returns. Of course, you need to consider the fact that among many divorcing couples, one spouse often moves out of the home. When this happens, the clock automatically begins ticking on the residency requirement of two out of the previous five years.

Your best bet to prevent time from affecting your sale is to sell the home in the early stages of the divorce. If the divorce drags on and one spouse decides to move out, that person may no longer be eligible for the full $250,000 federal tax exclusion.

When that happens, be ready for that spouse to ask for a larger share of the marital assets during property division to cover for future taxes as the divorce is finalized.

Other Considerations

If you plan on taking the tax exclusion, you should also remember that you can’t have taken one for another home sold in the last 24 months. In addition, if you remarry before selling your previous marital home, you may forfeit your right to qualify for the exclusion.
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The financial impact of a divorce tends to be one of its more overlooked consequences. For women in particular, what happens next after a divorce can be especially devastating to their financial security. It’s a phenomenon known as the “divorce gap,” and was first documented in a study that showed divorced were more likely to see their income fall by a fifth and stay that way, whereas divorced men were more likely to see their income rise by a third.

But according to a new study published in June this year by the Center for Retirement Research at Boston College, there’s a way for divorced women to their retirement: having their own home.

The study also found that formerly married but currently divorced women have historically been more financially secure than single women who have never married. The Center for Retirement Research attributed the critical factor on home ownership, noting that divorced women are more likely to own a house than single, never married women.

But while these results speak volumes of just what it takes for women to survive a divorce in terms of assets and finances, many divorce lawyers and financial advisors are concerned that it might encourage divorcing women to insist on keeping the house in a separation even when they don’t have the means to continue paying the mortgage, pay taxes, and maintain the property, all while paying for all their other living expenses.

In other words, keeping the house is not necessarily the best move in all divorce cases.

The researchers, however, note that while the study specifically mentions home ownership as a factor for moving on from a divorce in a more financially sound position, they added that there’s a broader point to be understood. It’s that divorced women tend to benefit from receiving a fair share of any marital assets, compared to never-married women who can only depend on themselves when saving and accumulating assets to fund their retirement.

But there’s an important catch.

The reason the report specifically mentions a home is because of its illiquid nature. In other words, assets that divorcing women accept in the settlement should be kept intact until retirement. And it’s much easier to do that with a house, which also offers the benefit of building equity. But for other assets converted into cash for retirement savings, the researchers note that there’s a high risk of women dipping into their savings for other expenses, whether it’s a holiday or a child’s college tuition.

The report also adds that when it comes right down to it, regardless of gender, marrying and staying married is still the best decision from a purely financial standpoint. The study also reveals that overall, women benefit from an equitable division of assets with the help of their lawyers.
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Parental alienation in a Texas child custody case can escalate this already contentious part of a divorce, which has long been associated with parents trying to make each other look bad, into a level where one parent manipulates a child or children to reject the other parent without a valid cause.

While parental alienation has always happened in bitter divorce battles involving children, only recently have family courts in Texas begun to take notice and take action when this happens, as they realized that this could profoundly harm the child or children caught in the middle of a child custody case.

What is Parental Alienation in Texas?

In a formal sense, “parental alienation” happens when one parent intentionally manipulates the child (or children) to cause him or her to reject the other parent without a valid cause. In many cases, a parent will vilify and demean the other parent in front of a child, causing him or her to share the feelings of hurt and anger, which then strains the relationship between the child and other parent.

Why Does Parental Alienation Happen?

Oftentimes, parents intentionally or unintentionally alienate the other parent because they sincerely believe that having custody is what’s best for their child or children. Other times, parents will smear each other out of spite over the divorce or out of fear that their ex-spouse will cut them out of their child, or children’s, lives.

Under the Texas Family Code, the Court, which will always act in the best interest of the child, will try to ensure that both parents are equally involved in their child’s life. But the problem is that identifying parental alienation can be a counterintuitive process, as any judge or juror would tend to assume that children who dislike one parent must be doing so because of a valid reason. Assumptions would then point to abuse or neglect at the hands of the alienated parent.

Consequences of Parental Alienation

Conditioning a child to hate one parent through propaganda can be extremely harmful to a child’s development, as well as his or her emotional and mental well-being. For all intents and purposes, manipulating a child to believe that one parent has been abusive or unloving is tantamount to child abuse.

But as family courts continue to realize the reality of parental alienation, the burden of proving its existence during a child custody battle will ultimately fall on the shoulders of a capable family law attorney.

If you feel that you are being alienated from your child, a Texas divorce attorney will help you by recommending and facilitating these measures:

Calling in mental health experts to assess the psychological state of the child and your relationship with him or her
Seeking custody modification to move the child to a neutral dwelling
Seeking custody arrangements that let you maintain contact with the child
Requesting the court to order therapy as intervention
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For many couples, planning for divorce might as well as be hoping for the worst to happen to their marriage. But just like life insurance, planning for a divorce is something you’ll thank yourself for doing when the need for it actually arises. And with 40 to 50 percent of marriages in the United States ending in divorce, the chances of it happening to you are not exactly out of the realm of possibility.

If you’re in the middle of a divorce, careful planning is key to a speedy and hassle-free resolution. And contrary to what you might think, divorce planning happens before, during, and after the divorce, and, ideally, with the help of your family law attorney. Here are a few things you need to know when planning for divorce.

Make Up Your Mind

If you’ve yet to file for divorce, now is as good a time as any to decide if this is really the right choice for you. Divorce is stressful, painful, and expensive. It represents a dramatic change in your life that will affect your emotional well-being and finances. This is a decision that should never be taken lightly.

Do Your Homework

There’s a lot work that needs to be done, so do your research. Not only are there different divorce timelines to consider, the divorce process itself can vary between states. In Texas, fo example, either spouse must have been a resident of the state for at least six months before filing, and must have lived in the county of filing for at least 90 days. While a divorce attorney is not technically necessary, going without one could lead to costly mistakes.

Take Time to Set Goals

What do you intend to accomplish with your divorce? More importantly, what are your goals in terms of your personal and financial life? A divorce is likely to throw a wrench in any 5-year plan, so it’s important to re-align your goals during and after your separation.

What’s Best for the Children?

When it comes to child custody in Texas, the Court will always have the child’s best interests in mind. You and your spouse will likewise have to think about what makes sense for your children. Is 50/50 or joint custody the best option? Should the mother keep the children? Perhaps something unorthodox like taking turns living with the children in the family home (while the other spouse lives in another home) could be what’s best for the family.

Assemble Your Team

Aside from a reliable Texas divorce attorney, your team can also be composed of a therapist, a financial advisor, and an accountant (for your taxes). Most people make the mistake of treating their attorney as their therapist, but they are ultimately specialists in matters concerning the law, not the heart.
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College is more expensive than it’s ever been, so it’s not surprising why thousands of college graduates are still struggling with student loan debt years after finishing school. But according to a new report, the problem of exorbitant student debt has gotten so bad that it is now causing marriages to end in divorce.

While financial problems have long been identified as a primary cause of failed marriages, a report by Student Loan Hero is perhaps the first to pin marital distress on student loan debt—a problem most commonly associated with the Millennial generation.

The report states that 13 percent of divorced borrowers blamed their student loan debt for the failure of the marriage.

Unfortunately, this trend may only become more prevalent in the years to come.

How Bad is the Student Loan Problem?

It’s estimated that more than 44 million Americans carry the burden of tens of thousands of dollars in student loan debt, contributing to an incredible national total of $1.5 trillion. But not only has the percentage of students borrowing money for college increased over the last 10 years, the amounts they’re borrowing have also grown steadily in recent years. The Student Loan Hero report points out that graduates from the class of 2017 were saddled with an average of $39,400 in student loan debt.

It’s no surprise why many couples feel they’re being held back by this amount of debt, as it can affect their financial and lifestyle decisions, such as when they can get a home or when they should have kids.

Student Debt Affecting Family Decisions

And true enough, millennials are taking longer to buy homes and get married because they want to be financially secure first—a feat easier said than done when you have a small mountain of debt nagging at you.

A New York Times survey published in July this year also found that of the respondents who said they didn’t want children or felt unsure about having children, 13 percent blamed it on having too much student debt. And of those who had or expected to have fewer children than planned, almost 50 percent said it was because of financial pressure/instability.

The results of the Student Loan Hero study echo those of the Times survey, indicating that 46 of respondents took their time to start a family because of student loans. In addition, one-fourth of the respondents admitted to keeping their student loan debt a secret from their partners, while 36 percent said they lied about it.

The problem of student loans and its effect on divorces needs to be further established, but one thing is clear—it has exacerbated the financial and marital issues that many couples around the country have long faced.
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