With the New Year now upon us, there’s ample opportunity to reflect on the past year and our goals and resolutions for the next. If initiating or resolving a divorce or family law-related matter is on your list of things to take care of in 2019, our team at Coker, Robb & Cannon, Family Lawyers is here to help you get started – no matter how complex your case may seem.
We have helped men, women, and families throughout Denton County, Collin County, and the surrounding areas of Texas since 1998, and we have spoken with many clients during their initial consultations, we know getting started on your legal journey isn’t an easy thing to do. Fear, frustration, second-guessing, in addition to unfamiliarity with the law and how divorce and family law cases work often add the difficulty many people face when staring this process.
What’s Ahead in Divorce & Family Law
Fluid and constantly evolving, the law is always being reshaped and redefined by changing views, new technology, social trends, and various fleeting or fickle factors. We see that all the time in matters as complex and personal as divorce and family law, and it’s why our firm goes to such great lengths to stay apprised of changes, keep our clients informed, and tailor our tools and strategies accordingly.
As an exercise in planning for the future, and a helpful illustration of what you can expect, should this be the year you initiate a divorce or get started on that family law case, our attorneys have put together a few important points about what’s ahead for divorce and family law in Texas in 2019.
New Spousal Support Tax Treatment
Perhaps the biggest shake-up when it comes to divorce law involves the taxation of contractual alimony . As we have discussed on our blog, the new tax changes were passed as part of the “Tax Cuts and Jobs Act,” a comprehensive tax reform bill that has far-reaching tax changes for individuals, corporations, and other business entities. It also has major implications for divorce, especially in terms of new policies for taxing contractual alimony payments.
As of 2019, spousal support will now be taxed differently than before. Here’s a quick run-down of what the changes entail:
- The new tax law will no longer allow people who pay contractual alimony to deduct those payments from their taxable income, and recipients will no longer have to pay taxes on the support payments they receive.
- The new taxation of alimony applies only to divorce cases finalized after December 31, 2018.
- If you have a divorce that was finalized in 2018 or before, spousal support taxes will remain the same. However, if you seek a post-divorce modification of contractual alimony(for reasons involving substantial changes in circumstances), any new arrangement will be subject to the new tax law.
The tax update is a big deal, and will likely change how spouses negotiate, mediate, or litigate resolutions over post-divorce maintenance. Because it cancels out motivations for higher-earning spouses to pay support and benefit from deductions, the change may provide incentive to fight for lower payments, or find other ways to negotiate compensation in lieu of support, such as disproportionate awards or transferring of other assets during property division negotiations.
The new tax law means Texas spouses starting their divorce in 2019 will need to work with knowledgeable lawyers who can help them better understand their rights when it comes to tax implications for spousal support.
The tax update may also impact other aspects of your divorce or family law case, such as:
- Revisiting prenuptial or post-nuptial agreements
- Business valuation (for divorcing spouses who own a private business) due to lower corporate tax rates, and changes in taxes paid by owners rather than the company.
- 529 college savings plans (for divorcing parents), which can now be used for private school tuition, rather than only post-secondary education or college as previously required under the law.
- Personal exemptions, including exemptions for dependent children and negotiations over which parent will use the exemption and / or claim the Child Tax Credit.
Potential Legislative Changes
Texas lawmakers will reconvene for the 86th Regular Legislative Session in 2019, which creates potential for changes to the state’s Family Code. Historically, the Texas Legislature sees many proposed bills and measures that have a possible or even unintended impact on divorce and family law issues, such as removing no-fault divorces, extending divorce filing waiting periods, and other proposals that may increase litigation costs, lengthen an already stressful process, and have other consequences in family cases.
As family law attorneys and not clairvoyants, we know it’s difficult to predict potential legislative changes. Though recent minor changes to the state’s Family Code in the previous Regular Session suggest this year won’t see substantial changes, there’s always the potential for updates and reform, especially given legislative turnover from last year’s mid-term election.
Case Law: The Courts & Family Law
Changes to our statutory laws and Family Code are slow and hard-earned, which means potential changes in divorce and family law matters are more likely to step from major or landmark decisions in the courts. This is known as case law, and it means that opinions from high courts like the Texas Supreme Court of the Court of Appeals which interpret the state’s Family Code may set new precedent that will be used in future cases and may very well redirect the way certain issues are handled and resolved in your particular case.
As an example, 2018 saw some significant decisions and precedent from the Supreme Court of Texas, with opinions addressing issues such as the division of assets and debts, and matters related to children. A few major decisions from the past year include:
- In re H.S., a case where the court ruled grandparents can pursue a suit affecting the parent-child relationship (SAPCR), which concern child custody, support, and parental rights.
- Dalton v. Dalton, which involved rejection of a wage withholding order and QRDO (an order used for the division of retirement benefits) to enforce unpaid alimony.
- In re Marriage of I.C., which affirmed a prenuptial agreement’s penalty clause.
- Bradshaw v. Bradshaw, a case which addressed the property division standard of “just and right” and resulted in a wife being awarded the family home due to a husband’s abuse of a child in the home.
With certain family law trends making their way into Texas, and the Texas Supreme Court’s acceptance of more cases concerning the state’s Family Code, there’s renewed focus on this area of law, and chances that more impactful and precedent-setting opinions may be handed down.
Trends & Expectations
As with potential changes from the legislature and the court, it’s not always possible to accurately read the tea leaves about what’s in store for Family Law. However, certain trends noted in the past year, including some we’ve discussed on our blog, may continue to become more important issues that play a role in more divorce and family law cases, or prompt more significant changes. Some of these recent trends include:
- Increases in “Gray Divorce,” which involves older spouses who have unique and specific issues in their cases, such as retirement, health care, limited income, Social Security, and more.
- A rise in prenuptial agreements, especially among women, younger couples, and older adults with previous marriages and divorces.
- Millennials getting married at a later age, which means they might have different concerns related to separate property, higher education and student loan debt, and prenuptial agreements, among others.
- More states passing “pet custody” laws that directly address ownership of dogs, cats, and other family pets in divorce.
- More interest in avoiding litigation through negotiations, collaborative divorce, mediation, and other alternative dispute resolution methods.
Get Started on Your Divorce & Family Law Case. Call (940) 293-2313
Whatever 2019 and the future may bring, Coker, Robb & Cannon, Family Lawyers will be here to help families across Denton and Collin Counties as they navigate the unique issues of their divorce or family law cases. With more than 95 years of collective experience and three Texas Board of Legal Specialization Board Certified Family Law Specialists, our legal team has the tools to help clients find effective solutions for a variety of situations.
Contact us to speak with a lawyer about your potential case.