The number of gray divorces involving spouses over the age of 50 has increased sharply in recent years, and assets such as retirement plans are often the subject of fierce debate during property division talks. This is especially true in states like Texas with strict community property laws that require marital assets to be divided equally. Pension plans are often a thorny issue because they are significant assets that can be very difficult to place a value on.
There's a common misconception that men are forced to give up a lot of financial wealth when they get divorced, but losing money is a common problem for high earners of both sexes in Texas. A woman who worked as a certified financial planner estimates that she lost more than $1 million in retirement savings during her divorce because she didn't have a prenuptial agreement. Other unfortunate financial circumstances also contributed.
Texas residents who are contemplating divorce may find it interesting to learn some of the ways that spouses try to hide assets from each other in the months or years leading up to divorce. Many people have the idea in their head that when discussing a spouse hiding away marital assets, the conversation is always about a man hiding money from his wife. However, the modern reality is different. In many homes, both spouses earn the same amount of money. It is not uncommon for the wife to be responsible for managing finances, including paying bills and monitoring investments.
Prenuptial agreements were once quite rare, but they have been gaining in popularity in recent years. They are more common in states like Texas that have strict community property laws, and they are particularly useful when one of the parties involved owns a business. Community property laws require marital assets to be divided equally, which can lead to contentious negotiations over how much a business was worth when a couple married and how much its value increased during the marriage.
Amazon is a household name in Texas and across the country. Many have even heard that the company's CEO, Jeff Bezos, is going through a landmark high-asset divorce. On July 5, the divorce was finalized by a judge, ending Jeff's 25-year marriage with his former wife MacKenzie. According to the divorce settlement, MacKenzie Bezos will receive $38.3 billion in Amazon stock, marking 4% of its outstanding shares. Amazon said in April that 19.7 million shares in the company would be registered in her name after the divorce was approved in family court.
The division of financial accounts can be one of the most contentious issues in a divorce. Texas residents who maintain accounts separate from those of their spouse should be aware that having assets in their name only will not protect those assets from being divided in a divorce.
Divorce can be a time of major financial changes for people in Texas; the financial effects of the end of a marriage can be some of the longest-lasting. However, in order for people to advocate for themselves during a divorce and secure a fair settlement, it is important that they better understand their own financial situation. In many families, one partner, typically but not always the husband, is responsible for handling most of the family finances. As a result, the other spouse may know little about marital assets, debt and income, potentially putting them at a disadvantage in the divorce.
A divorce in Texas can lead to various insurance-related issues. If a spouse has health coverage under a spouse's employer-based plan, for example, they might need to look into getting a new policy. COBRA allows a three-year continuation of the employer's plan, but this is still temporary.
One difficult aspect of divorce for people in Texas might be keeping talk of the divorce out of the office, but it is necessary to do so. The stress of divorce can negatively affect a person's work performance, and talking about the divorce or other personal issues at work may cause problems later if any coworkers are deposed as part of the process.
As a couple goes through the divorce process in Texas, they have many things to think about. If they are parents, there are questions of custody that need to be addressed. If they are homeowners, they need to resolve questions about property division. During the divorce process, it is easy to be focused on the here and now and the emotions that divorce kicks up. However, divorcing individuals also need to think about their future, particularly how the financial decisions they are making now will affect them when they reach retirement.