JLJ Family Law » Archive of 'Mar, 2010'

College Expenses for Your Child

Payment of college costs is a concern of most parents, and especially those going through a divorce. Although the payment of college expenses may be negotiated in a divorce and specified in a decree of divorce, the courts do not have the ability under Texas law to order a parent to pay for college expenses for a child. Once a child graduates high school and is 18 years of age, they are no longer eligible for child support; therefore, the court cannot make orders for their support.

Student loan reform legislation was signed into law on March 30, 2010 that promises to lessen the financial burden for those applying for student loans. The law affects loans that originate beginning July 1, 2010. Besides increasing money available for the Pell grant program, the program is supposed to lower the fees charged because banks will no longer be middlemen in the process. The law also helps students with regard to paying back the loans. Monthly payments will be capped at 10 percent of discretionary income rather than 15 percent.

For additional information see: http://naicu.edu/news_room/the-student-loan-reform-bill-a-perspective

Separate Property: What it is and How to keep it

Under the Texas Family Code, separate property consists of (1) property owned or claimed by a spouse before marriage; (2) property acquired by the spouse during marriage by gift, devise, or descent, and (3) recovery for personal injuries sustained during marriage, except for recovery for lost wages or earning capacity.

Community property is defined as all other property acquired during the marriage other than separate property.

These rules apply whether a marriage ends by divorce or death of a spouse. For instance, if a person’s Will gives separate property to someone, then it will be important to determine what the separate property consists of.

There is a higher standard of proof under the law to prove a claim for separate property. At the time of divorce, all property is presumed to be community property unless proven otherwise. Separate property must be proved by clear and convincing evidence. The key to proving a claim for separate property is good record keeping. Maintain documents of assets and debts existing on the date of marriage, and keep on-going records. It is not sufficient to show you had an investment account at marriage with $10,000 in it, and that the account at divorce is your separate property. Why? Income earned during marriage from separate property is community property (because it was earned/acquired during marriage). Additionally, it is unlikely that there would be no deposits or withdrawals in the account during the marriage, and it needs to be determined if those were separate or community.

Let’s look at some common divorce scenarios:

1. Investment account value was $50,000 at date of marriage and $100,000 at date of divorce.

There will most certainly be fluctuations in the value of stocks during marriage, up and down. Those don’t change the character of the stock. One share of Southwest Airlines stock worth $50 at marriage is still separate property at divorce even if the stock is now worth $75.

Interest income is community. Deposits into the account after marriage from community property (e.g. wages) are community, and any investments purchased with those funds are community.

The typical scenario at divorce is that the investment account is mixed: community and separate. If the spouses cannot agree on what is separate then it is necessary to hire a forensic accountant to trace the account from the date of marriage to divorce. This is where good records come into play. Without them it is unlikely that a clear and convincing case can be made.

2. House Owned Prior to Marriage, Sold after Marriage, and Proceeds used to Purchase New Home with Spouse

Maintain all closing documents from the sale of the first house and purchase of the second house. Keep bank statements to show what happened with the proceeds from the sale of the first house (e.g. deposit into bank account, copy of check and statement showing money going toward the purchase of second house).

This is another typical situation of mixed title, because usually there is a down payment, which, in this case, is separate property, and a mortgage note signed by the husband and wife. The separate property interest equals the down payment divided by the purchase price.

The Texas Legislature allows spouses to change the rules of characterization, and that can be done through pre-marital and post-marital agreements. There are technical rules to follow in drafting the documents, and you should consult an attorney if you think that you need such an agreement.

In the meantime, keep all of your records

How will Health Care Reform impact divorcing women

By Jody L Johnson of JLJ Family Law

Health Insurance for Divorced Women

Most women going through divorce are covered as a dependent on their husband’s health insurance; therefore, it is important to be aware of your options for coverage post-divorce.

1.         COBRA

COBRA (The Consolidated Omnibus Budget Reconciliation Act) is a federal mandated law that was designed to protect employees and their families from losing coverage as a result of divorce, death, job loss or other specified circumstances.  If your spouse’s coverage is through a company that employs at least 20 people, then you are eligible for coverage for up to 36 months post divorce.  Unless you and your spouse agree otherwise, you will be responsible for payment of the premiums which can unfortunately be significant.  As a result, many view COBRA coverage as a stop-gap option until better coverage is available.  Under COBRA, you do not continue as a dependent on the policy.  Instead, you are offered individual coverage similar to what you had as a dependent. It is fraudulent to remain as a dependent post-divorce.  It is possible to negotiate for your spouse to pay some or all of the cost of COBRA coverage either as part of the financial settlement or as a form of alimony.

2.         Current Employer

If you obtain employment and your employer offers an affordable health plan, then it is recommended that you look into enrolling in the plan.  Unfortunately, many divorced women who seek employment after divorce, find that employers either don’t offer insurance benefits or don’t offer enough hours to qualify to enroll in the health insurance program.

3.         Individual Health Plans

An individual policy may be your best or only option in some situations.  It is important to weigh the cost of the policy against the benefits and perceived need of coverage.  There are policies that are less costly for healthy individuals that basically insure against catastrophic health concerns. Essentially you would self-insure for everything else.   Try to negotiate for the cost of coverage to be factored into the settlement, especially if your cost will be much greater than your spouses cost.

What is the impact of the new Health Care Reform legislation?

The full impact is yet to be seen.  However, one important cornerstone of the new legislation that will significantly benefit divorcing women is the ability to obtain health insurance regardless of pre-existing conditions.  It is not uncommon for women of divorce to have one or more pre-existing conditions.  Those conditions can either prevent them entirely from obtaining insurance, or preventing them from obtaining insurance for the condition they most need it for.  The new legislation is designed to eliminate this impediment.  For more information about how the new legislation may affect you, please refer to http://bit.ly/az5LM7

For additional answers to questions about health insurance and divorce, please refer to http://bit.ly/bu36aW

For more information on family law solutions, visit www.jljfamilylaw.com

Same Sex Relationships

Although Texas does not currently permit same sex couples to marry, and the issue of whether same sex couples legally married in other states may obtain a divorce in Texas is currently be litigated, it is possible to enter into contractual agreements regarding many issues that same sex couples face when they are beginning or ending a relationship

Protecting and Defining Financial Interests and Property Rights

When entering into a relationship, it is important to define financial and property issues such as: how bills will be paid, how property will be owned (and divided upon separation), financial support for a partner. It is possible to draft cohabitation agreements that address the issues that are important to couples in order to achieve their goals.

Same Sex Parenting

Whether a partner has children from a prior relationship, or the couple has adopted a child or conceived through artificial insemination, it is important to ensure parental authority for non-biological parents and to protect the child’s continuing relationship with parents. In such situations, it is recommended that parenting agreements be memorialized in writing.

Ending a Relationship

Many same sex couples assume they have no process to assist them with ending a relationship. However, there are two viable process options available: mediation and collaborative law. Both processes have the advantage of being confidential, and give the couple a forum for reaching contractual agreements regarding the division of property, child support; partner support, child custody, and other issues that are specific to the needs of each particular family. For more information on collaborative law, visit www.jljfamilylaw.com.