Divorce Season – 6 topics to consider when meeting with a lawyer

January-The-Divorce-Month1January is the month for examination of our lives to find areas for improvement. Some join a gym; others focus on weight loss or financial budgeting. But yet others contemplate a more major life change in January – divorce. January to March has become known as the “Divorce Season” with the highest incidence of couples filing for divorce.

According to a study conducted by FindLaw.com and reported in Divorce Magazine, between 2008 and 2011 divorce filings spiked in January, continued to rise through February, then peaked in late March. The first three months of the year are looked upon as the time to start a divorce action.

So where does one start when reaching the decision to start a divorce? Most people start searching for a lawyer by asking friends for advice and searching the internet, but here are six topics to consider:

1. Identify the potential need for a divorce attorney early.

2. Reach out to trusted resources for referrals.

3. Hire an attorney certified by the Texas Board of Legal Specialization in family law.

4. Ask questions of the attorney at the initial consultation.

5. Take inventory after the meeting regarding your feelings regarding the lawyer interviewed.

6. Trust your gut – if it doesn’t not seem right, it probably isn’t.

Read more: How to choose the right Dallas divorce lawyer

Read more: What to ask an attorney during your first interview

 

5 questions if you want to keep the house after divorce

Real estate concept - two hands trying to divide house, isolated

In December, Dallas showed up in the #4 spot on Realtor.com’s list of hottest real estate markets. It moved up one spot from November, when it was ranked at #5. In the latest report, Dallas was outranked by only three other U.S. cities (all of them in California) — San Francisco, San Jose and Vallejo. (See report from Home Buying Institute here.) Houses tend to sell more quickly in these hot markets, compared to other cities across the country. And, stories of first day listing bidding wars are frequently heard around the coffee pot at realtor offices in DFW. So, what does that mean if you are going through a divorce? How do you factor that in to deciding to keep the house, let the other spouse keep the house, or sell it and split the proceeds?

Today I received in the mail a very timely newsletter from John Snell, CDLP about mortgage lending in divorces. He made some very timely points about topics to consider for a spouse who wants to keep the house after the divorce.

1.Why do you want to keep the house after you get divorced?

This question may be difficult to answer for many. For some, one house may be the same as another house — just a place of shelter and functionality. But for others, the home carries many emotional ties. It may have good memories, such as the place where the child took his or her first steps. Or, it may carry negative memories, such as the painful reminder of the broken marriage. Either way, there are many emotional, financial and practical considerations to consider in deciding whether to keep the house.

2.Is your home a good investment (especially in the Dallas real estate market)?

Going through a divorce requires a hard look at your financial interests. Compare the home’s value in the market to the amount owed to determine the net equity. Also, look at the future market trends for your house and your area. Is this a good long-term investment for you? Or, will this prove detrimental to your financial interests over time? A realtor can give you an idea of comparable sales to determine a ballpark value of your home — and they usually do this for free.  (Call Realtor Debbie Murray at Dallas Luxury Real Estate if you want to talk about how much your house might be worth.) One unique factor right now is the heat of the Texas real estate market. In a normal market, the considerations of keeping the house may be different. But in this market, the selling factors may present an opportunity to make a different decision if the value of the house is high.

3.What is the condition of the house?

It is a good idea to look at your house the way a buyer would when you are considering whether to keep the house in the divorce. What are the repair issues that need to be addressed? Is the roof in good condition? Is the a/c unit in need of servicing? You should consider having a home inspection done prior to discussing settlement to look at repair issues that would affect the overall value of the home. Use the cost of repairs to negotiate the value of the house downward during the divorce negotiations.

4.Can you afford the home on your own after divorce?

If you were dependent upon your spouse’s income during the marriage to afford the living expenses related to the house, you need to fully examine whether you can afford to keep the house without the spouse in the picture. For many people, divorce negatively affects their financial status. Income usually goes down and expenses go up. If you are unsure about what you can afford or need help putting together a budget, consult with a financial professional for help.

5.Can you qualify to refinance the home to remove the other spouse from the note after divorce?

Although it cannot be forced in a Texas divorce, you will want to consider the option of refinancing the home mortgage if you are going to keep it after divorce. This will put separation from your ex-spouse on all issues. Otherwise, as long as he or she is on the note, that ex-spouse will have the right to inquire about timely payment of the note in the future. You can call a mortgage lender who specializes in divorce situations (like John Snell) to find out more.

For the most part, there is no right or wrong answer to this issue. Each situation is unique and has different positive and negative thoughts to balance. Through the combined advice of your Dallas Texas divorce attorney, your DFW realtor, and your divorce-specialized mortgage lender, and your financial professionals, you can reach an educated and informed decision.

Divorce in the new year — first in America and Texas

Today-In-History2Divorcing early in the new year dates back to the first divorce ever granted in America.

On this day, January 5, in 1643, Anne Clarke of the Massachusetts Bay Colony was granted a divorce from her absent and adulterous husband Denis Clarke, by the Quarter Court of Boston. According to History.com, Anne filed an affidavit with a community leader where Denis admitted to abandoning his wife, with whom he had two children, for another woman, with whom he had another two children. Denis also stated his refusal to return to his original wife. The Puritan court was left with no option but to punish Denis and grant a divorce to Anne. The Court’s final decision read, “Anne Clarke, beeing deserted by Denis Clarke hir husband, and hee refusing to accompany with hir, she is graunted to bee divorced.” (sic)

Divorce wasn’t legal in the U.S. until 1701 when the state of Maryland passed a law legalizing divorce. In 1949-50 South Carolina legalized divorce, and in 1970, Alabama legalized no-fault divorce. But divorce regulation was originally introduced by the Code of Hammurabi in ancient Babylonia. Rome also had a method of informal, private divorce and in 449, the emperors of Rome changed the law to allow for divorce in the event of certain acts such as homicide, robbery, or if the husband could prove the wife was “(1) going to dine with men other than her relations without the knowledge or against the wish of her husband; (2) going from home at night against his wish without reasonable cause; (3) frequenting the circus, theatre or amphitheatre after being forbidden by her husband.” By 700’s the Catholic Church, and Italy, disavowed divorce.

Conflicting stories exist as to when Texas granted the first divorce. In Texas history, possibly as early as the 1500s, Caddo Indian women were permitted to divorce their husbands by placing his belonging outside of their lodge. But after becoming part of America, two stories conflict about when the first Texas divorce took place. One source states that the first divorce in Texas, as an American state, seems to have been granted in 1840 in Nacogdoches between Susan Calenelly Johnson and Y.C. Johnson. But another source cites the first divorce in Texas being granted on march 24, 1838 in Harrisburg (later Harris) County to Susanna Dickinson because her then husband John Williams, who she married on November 27, 1837 beat her and her daughter who would have been 3 years old at the time.

 

Resources:

First divorce in the colonies, History Channel

Women in Texas History, A Project of the Ruthe Winegarten Memorial Foundation for Texas Women’s History

Dickinson, Susanna Wilkerson, Texas State Historical Association

The Texas History Teachers’ Bulletin, Volumes 10-14

History of Divorce: Around the World by Molly Kalafut

5 Tips for Planning for Divorce in Texas in the New Year

new year divorceWe all have family members or friends who have been through divorce. Although societal stigmas may still exist to some extent, divorce is far less scandalous these days, and often viewed as something that just happens to some couples.  If you are divorcing, this is a healthy perspective for you to take and remember as you navigate the process and move forward.

Clients often say “Divorce is an emotional rollercoaster”, which is an incredibly accurate description. You pay a fee, stand in line, take your seat, strap in, lose control, get tossed about, and eventually come to the end.  Here in Texas, however, we understand the difference between riding the Judge Roy versus the Texas Giant (a patron recently died riding the Texas Giant).  While you may not avoid the ride, preparation can help dictate whether you are strapped in the Judge Roy or the Texas Giant.  Remember, in divorce, preparation isn’t just power, it’s everything.

If you find yourself headed for divorce, you should consider taking the following steps to protect and prepare yourself:

  1. Know Your Assets & Debts – There should be nothing about your marital finances that you do not know. It may take some catching up, but so be it. Take steps necessary to get access to accounts, your financial advisors, your CPA, and get educated. Copy all year-end financial statements, work related (W2s, 1099s, 401(k), IRA, pension) and personal bank and investment statements. Run a credit report on yourself and your spouse.
  2. Separate your Non-Marital Assets – The dictionary would define non-marital assets as property considered by the courts to belong to one spouse or another and that which is not available for equitable distribution. Basically that just simply means they are not part of the assets divided in a divorce. Some types of these assets include: Inherited property; Items brought to the marriage or owned before the marriage; Gifts given specifically to one person as opposed to the married couple; Proceeds from personal injuries.  Sometimes these non-marital assets can become mixed with marital. An example of this would be if an item such as a boat were purchased prior to marriage, and then sold during marriage in order to purchase another item such as a car. In situations like this, it is very important to have a traceable paper trail showing where the assets were and where they were transferred into to be able to claim it as a non-marital asset.
  3. Walk the Line – In other words, don’t do stupid stuff. Consider yourself to be under a microscope. No alcohol, no drugs, no questionable behavior. Put your love life on hold and stay single. Change passwords on all social media accounts and refrain from posting anything that would upset your children or spouse. In fact, it may be best to just avoid social media all together until the process is concluded.
  4. Focus on the Kids – If you have children, start listing parenting issues and visitation options. Be sure to inform yourself as to the children’s lives – who are their doctors, teachers, tutors, friends, and activities. Hopefully you already have a solid relationship, but if not – no better time than immediately to start spending quality time with your kids.
  5. Hire an Experienced Divorce Lawyer – Even by adhering to all these principles, the divorce process can be very confusing and difficult to manage. There is a large amount of information and guidelines that must be considered, which are often fact specific. For this reason, it is important to consult with and hire an experienced divorce attorney who will be able to walk you through this process and help protect your rights. Keep in mind that an experienced attorney can make sure you avoid mistakes that could make the ride a lot less bumpy.

Lastly, many people say they want to make this the last good holiday for the families. If that’s the case, respect each other, save the arguments for another day and try to start a new tradition for yourself this year. By doing that, next year will be easier and you will be on your way to making the best of your life the rest of your life!

Don’t let holiday cheer become a custody disaster

christmasMy favorite holiday of the year is officially almost here – Christmas! With schools beginning Christmas school vacations for students this week or early next week, parents should plan accordingly with their holiday possession schedule for their children. So make sure to check your children’s school calendar to know the date and time they get dismissed. If your children are not in school, then look at the school calendar for the school district you live in.

In Texas, generally the non-primary conservator will have possession of the child in even-numbered years beginning at the time the child’s school is regularly dismissed for the Christmas school vacation and ending at noon on December 28 of that given year. Then the primary conservator will have possession of the child beginning at noon on December 28 and ending at 6:00 p.m. on the day before school resumes after the Christmas school vacation. In odd-numbered years the possession periods are generally switched for the parents. This means that the primary conservator will have possession of the child beginning at the time the child’s school is regularly dismissed for the Christmas school vacation and ending at noon on December 28 of that same year, and the non-primary conservator will have possession of the child beginning at noon on December 28 and ending at 6:00 p.m. on the day before school resumes after the Christmas school vacation. Many times we see conservators agree to ending their possession periods for the holidays on the day the child’s school regularly resumes after the Christmas school vacation. You should check your divorce decree or most current court order to see if that provision is in it.

Similar to other holidays, if you and the other parent conservator wish to make agreements regarding the possession schedule that differ from your divorce decree and/or most recent court order, you should put those agreements in writing to avoid confusion or conflict. Sometimes parents are in pending custody suits over the holidays. Some of the common questions we receive relate to confusion as to what order the parents are to follow regarding holiday possession. Unless you and the other parent have agreed otherwise, you should follow your most current court order governing the holiday possession schedule for your child (or children). For example, if you are involved in a pending suit to modify your custody arrangement and the most recent court order in place is your divorce decree, then that divorce decree will govern unless you and the other parent have come to another agreement regarding the holiday possession schedule.

We know the holidays can be a stressful time of year, but don’t let a custody dispute make it a disaster. Make sure to ask questions ahead of time so there is a clear possession schedule to follow over the holidays. Remember that this time of year can be challenging for children as well. Try to work together with the other parent to make this time of year magical and happy for your children so they can create their own family holiday memories. We hope everyone enjoys the holidays and has a Merry Christmas!

Who gets the house in a Texas divorce?

gingerbreadhouseA lot of times the question comes up of “who gets the house”. Because the home is often the largest single asset in a divorce, it is important to know what courts consider in making this decision. First, courts consider the ability of the parties to continue making the mortgage payments, taxes, insurance, and other upkeep expenses. Although debt is a consideration in making the just and right division, courts do not want to impose any liabilities on a party that in all likelihood cannot be met. If the spouse lacks income to pay for the home, then that spouse will not likely be awarded the home. If a spouse is going to have to move, I always recommend that it happen sooner than later so the spouse and children, if any, get settled in to the new situation.  Another factor involves whether or not there are children involved. If there are children involved, courts try hard to keep their environment as stable as possible. In that regard, courts consider which of the parties has primary possession of the children and frequently award the house to that spouse.

A lot of people are under the misconception that just because the house is awarded to one spouse the other is no longer liable for the mortgage. Unfortunately, the courts are powerless to change liability on a debt. If spouses have joint debt, such as on a house, the divorce court cannot do anything about that. Sometimes a spouse will agree to try to refinance a joint liability, but there’s little a court can do to force that to happen.

A spouse owns a business in Dallas Texas but how does an attorney handle that in a divorce?

business-valuationDid you know that businesses with fewer than 500 employees account for over 99% of all employer firms in the U.S.? And, very small businesses with fewer than 20 employees account for half of the country’s nonfarm GDP and have generated 60-80% of the net new jobs over the past decade?

For the entrepreneur of a small company the family business is another asset in the marital estate that is subject to division upon divorce in Texas. Once the entity is evaluated by a forensic CPA and a value assigned to the community property portion of the asset, the typical division will provide a lump sum payout to the uninvolved spouse at the conclusion of the divorce.

A business consists of tangible assets like buildings, bank accounts, inventory, tools, furniture, and the like; but also, a business has intangible assets such as mortgages, leases, labor, accounts receivable, and goodwill. Valuing the goodwill of a business presents its own complexities because of the distinction between the goodwill of the enterprise versus the goodwill of the owner.

Enterprise goodwill is the capacity of a business to attract new customers or keep old ones due to great locations, reputation for superior service or skill, or anything else that influences customers to continue a professional relationship. Personal goodwill describes the nontransferable ability of an individual to attract and maintain customers due to his or her particular reputation. The goodwill of the enterprise can be considered in the valuation of the entity; whereas, the goodwill of the owner belongs to the owner himself or herself and is not a marital asset.

Another issue in valuation of a business is whether the spouse owner has control over the entity – whether he or she has to share power or decision-making authority. Thus, the value of the entity can be reduced based on a discount for lack of control over the entity.

Another discount that applies to the valuation of a business entity in a divorce is the discount for lack of marketability. In other words, the valuation isn’t being performed between a willing buyer and a willing seller and, in some cases, can’t be sold easily.

Business valuations are usually performed in Texas divorces by a CPA who is Accredited in Business Valuation, a Certified Business Appraiser, or someone recognized by the American Society of Appraisers. Regardless, the expert must be familiar with the nuances of Texas divorce laws as applied to business entities as a marital asset.

Top Five Concerns Regarding Small Business Ownership and Divorce in Texas

storefrontWhen the parties to a divorce own a small business, a Texas divorce can have a deeper and more difficult effect. Not only are the emotions high due to the breakup of the relationship, but also one spouse or both spouses may be concerned about their future livelihood after the divorce because of the division of marital property and a small business.

One: Type of business entity

The first concern in addressing issues related to a small business in a divorce relates to the type of entity of the business. Is the business a corporation, partnership, or sole proprietorship? The rules of divorce differ depending on what type of entity is being divided.

Two: Date of Formation

The date a business was formed is the second step in evaluating the effect of divorce on a business. If the business was formed before the date of marriage, it is probably separate property such that the business or its value cannot be divided in the divorce as an asset of the marriage. If, on the other hand, the business began during the marriage, there will be a presumption that it is community property of both parties and subject to the divorce court’s division. However, that presumption may be rebutted under certain circumstances if evidence exists showing the funds used for the initial formation came from one spouse’s separate property.

Three: Changes in Formation

The third question regarding the evaluation of small businesses in divorce is a determination of whether there have been any changes in the formation of the business during the marriage. Even if the business is separate property at the time it was formed, it can be transformed into a community property asset if the business changed its entity type. For example, if one spouse owned a sole proprietorship before the marriage, but during the marriage, that spouse learned of the benefits of incorporation and incorporated during the marriage, the business may be transformed into a community property asset.

Four: Operation of the Business During Divorce

A very important issue to address regarding a small business during a divorce involves issues related to continued operation of the business while the divorce works through the process. This can be particularly problematic if both spouses were involved in the day-to-day activities of the business prior to the divorce being filed, but who cannot get along after the divorce is filed to co-operate the business. Under this type of circumstance, the divorce court may have to intervene and award one party or the other the right to operate the business within certain parameters. In extreme circumstances, the court may appoint an independent receiver to operate the business until the divorce can be concluded and the business awarded to one party or the other.

Five: Where do the customers come from?

For a court to determine the proper value of the business entity, the valuation expert must examine where the business’ customers come from. If customers employ the business because of the reputation or abilities solely of the individual owner of the business who does the work, that intangible value is the “personal goodwill” of that individual and is not an asset that can be considered in the value of the business for division purposes. On the other hand, if the business gains customers due to the reputation of the entity itself, that intangible value is an asset of the business to be included in valuation.

Dealing with business entities in a divorce can be complex. Not only do the business issues relate to the division of property in the breakup, but the business entity may provide the crucial income that supports the family. This can create emotional frustrations and fears as the divorce process works through as well.

Why choose a board certified family law attorney?

Board certification in Texas is a voluntary designation program for attorneys and paralegals. To become board certified, an attorney must have been licensed to practice law for at least 5 years, devoted a substantial percentage of his or her practice to family law for at least three years, demonstrated experience and involvement in handling family law cases, attended continuing education in the area of family law, and passed a peer review. Once all of these criteria are met, an attorney may then sit for a 6-hour grueling written exam. If passed, the attorney is board certified for a period of 5-years, subject to renewal.

Out of over 70,000 attorneys in the State of Texas, only 797 are board certified in family law!

O’Neil Wysocki has three lawyers and one paralegal that are board certified in family law. Michelle May O’Neil has been board certified in family law since 1997, and recertified every five years since. Michael D. Wysocki received his board certification in family law in 2011, and Eric Navarrette became board certified in 2013. Sandra Allen, paralegal to Michelle O’Neil, received her certification in family law from the Texas Board of Legal Specialization in 2007, making her one of only four board certified family law paralegals in Dallas County, Texas.

Hiring a board certified family law attorney to represent you in your family law or divorce matter, whether you are in Dallas or anywhere in the State of Texas, ensures you give yourself the best chance at a successful outcome. You can be assured that an attorney who is board certified has at least a minimum level of competence, experience, and expertise to handle your matter.

Thanksgiving and divorce parenting time

Thanksgiving divorceHoliday season always seems to sneak up on us. In the blink of an eye, you go from carving pumpkins and picking out Halloween costumes to feasting on turkey and stringing Christmas lights. Now with Thanksgiving just around the corner, the holiday rush really begins. From planning the family gatherings, grocery shopping, endless hours of cooking, and, my favorite, Christmas shopping, I am sure everyone’s to do list is overflowing. However, do not forget to make it a priority to check your divorce decree or current court order regarding holiday possession. During the holidays, the last thing a parent needs is a disagreement regarding the holiday possession.

 In Texas, holiday possession generally supersedes your regular weekly possession. The Texas Family Code provides that conservators alternate Thanksgiving possession each year, with the Thanksgiving possession beginning at 6:00 p.m. on the day your child is dismissed from school for the Thanksgiving break and ending at 6:00 p.m. on the following Sunday. Many times parents have chosen to elect the alternate periods of possession, which could mean that the Thanksgiving holiday periods of possession begin at the time the child’s school is dismissed for the Thanksgiving break. If your child’s Thanksgiving break begins on the Friday before Thanksgiving, then the parent who has the right to possession of the child for the Thanksgiving period will have possession that weekend. It is important to note this because it is easy to forget that the regular scheduled weekend possession before Thanksgiving may be superseded by the holiday possession schedule.

Additionally, many times divorce decrees and court orders have provisions that allow parents to mutually agree to possession dates and times that differ from the possession schedule provided in the order. In the spirit of the season, it is always encouraged that parents work with another on possession arrangements that ultimately serve their children’s best interest. If you come to an agreement on the holiday possession that differs from your current court order, make sure that agreement is clear to both sides. Nothing interrupts holiday cheer like a trip to the courthouse, to make possession clear. Far too many times, we see clients in a frenzy over a conflict on the breakdown of the holiday possession because they made outside agreements and now one parent is not following that agreement. Making these agreements in writing is encouraged because it reduces the likelihood of confusion and misunderstanding.

So let this Thanksgiving be one that is focused on family, while making the center of that focus your child. Remember, working out differences peacefully and amicably benefits everyone. The biggest recipient of that benefit being your child. Gobble Gobble! Happy Thanksgiving!

 

 

LexBlog