If you get divorced in Texas, you’re going to need to do a lot of negotiating with your spouse. You have to figure out how to divide your assets. You also need to determine child custody and custody support. Depending on how long you were married, you may need to agree on alimony too.
In Texas, only marriages that lasted more than ten (10) years are subject to alimony. And, if ordered, alimony is usually paid monthly. When you and your spouse negotiate alimony, you have a few options:
- Pay alimony for a certain number of years, with a payment made each month
- Figure out a lump sum payment in lieu of alimony
- Move some assets around to make up for what your spouse would have received in alimony
A lot of people would opt for a lump sum payout or set-off if possible. This way, you’re not paying alimony for years. However, there are benefits and detriments to doing this. Some of these are practical. Others are legal.
If you’re considering getting a divorce, you need to contact a family law attorney in Houston.
How Does Your Family Law Attorney in Houston Calculate Potential Alimony?
One of the hardest things is putting a value on alimony. In order to calculate alimony, your lawyer will try to negotiate an amount with your spouse’s lawyer. These negotiations will be based on income – both yours and your spouse’s.
The general rule when it comes to calculating alimony is as follows:
Spouse X Annual Income – Spouse Y Annual income = Divided by 3
So, let’s take an example.
Husband makes $100,000 per year. Wife makes $40,000 per year. The difference between the two salaries is $60,000. Now, let’s divide this amount by 3. We end up with $20,000.
In this example, your wife could be awarded as much as $20,000 per year in alimony. That’s roughly $1,500-1,600 per month. Who wants to pay this kind of money every month for several years?
Your Family Law Attorney in Houston Will Determine a Fair Lump Sum Settlement
In the example above, we looked at a case where the husband would be paying almost $1,600 a month in alimony. That was $20,000 per year. Let’s use this example to find out what a fair lump sum settlement would be.
When your attorney determines alimony, he has to negotiate a duration for the alimony. He’ll work with your spouse’s attorney to do this. There’s a chance both parties will want to resolve the alimony issue upfront rather than have it drag on for years.
Let’s say that the attorneys agree that you’ll pay alimony for 8 years – that’s a total of $160,000 if you paid it monthly. Of course, you’re not going to pay the full amount if you opt for a lump sum settlement.
Your family law attorney in Houston is going to offer a less amount if your spouse takes it upfront. Let’s say that you and your spouse agree to a lump sum of $100,000. Once this is paid, no further alimony payments will be made.
How Does a Set-Off or Settlement Work?
If you and your spouse on a settlement amount, you still have to determine how this will be paid. You have a few options.
If you have that kind of cash, you can pay the settlement that way. Of course, you have to use your half of the cash assets to do this. Otherwise, it defeats the purpose of settling alimony.
The other option is to use your assets to set-off the agreed upon amount. If there’s enough equity in your marital home, you can sign the deed to the house over in lieu of alimony. You can also use other assets to pay the lump sum.
If you have a retirement account, or investments, you can liquidate them to pay the alimony settlement. You’re entitled to do this one time if you get divorced without the tax penalty.
Call a Family Law Attorney in Houston to Help Negotiate Your Divorce Settlement
Although you may want to take advantage of an alimony settlement, keep in mind there are drawbacks. For instance, once you pay this settlement, you can’t get it back. There’s nothing your attorney can do if you change your mind once the divorce is finalized.
For all you know, alimony could’ve terminated in a year or two. For all you know, your wife may remarry or move in with another man. This will mean that you pay the equivalent to 5 years in alimony instead of 2.
This is the risk you take. It’s one reason why your wife may be willing to take much less than she would’ve gotten over time.
Call and schedule your initial consultation with a family law attorney in Houston today.