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Would a strategic divorce be worth any money savings?

| Oct 25, 2019 | High Asset Divorce |

Many Sugar Land couples decide to end their marriages due to some sort of incompatibility. Perhaps they fell out of love, one cheated on the other or arguments about everything from dinner to money have become too much. The point is that they decide to divorce because they no longer want to be in the marital relationship. However, a new trend appears to contradict this thinking.

Some couples are deciding to enter into what is being called a “strategic divorce.” They still love each other, but want to divorce in order to gain something, such as saving money on taxes, getting a child financial aid or qualifying one spouse for Medicaid. While it might make sense to divorce only on paper, there are significant drawbacks that deserve serious attention prior to making any decision.

Divorce means dividing property, which includes businesses, retirement accounts and more. Since Texas is a community property state, a family law judge will begin the property division process with the assumption that a Sugar Land couple owns all assets jointly. Each spouse could end up with a portion of that family business and any retirement accounts. This may not immediately alarm a couple only divorcing in order to gain some financial advantage, but it should since the assets awarded to one spouse become separate property.

An interest in the family business could be sold. The funds in a retirement account could now be given to a different beneficiary. Numerous choices become available for a person when he or she owns a piece of property separately instead of jointly with a spouse.

The perceived gains through a strategic divorce could end up backfiring. This decision requires a significant amount of thought and investigation from every angle. Before making such a choice, it would be wise to sit down with an experienced family law attorney for a full assessment of the current circumstances and what could realistically happen once the divorce is finalized.