Compensation in Divorce

Compensation and Property Division

In Texas, it is generally assumed that any property obtained during a marriage belongs to both parties as community property, unless there are specific exceptions. One such exception is compensation received from a personal injury lawsuit, unless it is intended to replace lost income. Community property is shared by both spouses and is usually divided by the court based on what is fair. It is important to note that community property also includes any compensation earned by either spouse during the marriage.

While it is usually straightforward to determine the value of compensation during a divorce, there are some cases where it can be challenging. For example, if one or both spouses receive non-cash forms of payment, such as deferred compensation plans, restricted stock options, or employee stock purchase plans, it can be difficult to accurately determine their income. Additionally, contributions to a retirement plan may also be considered community property depending on when they were made. To evaluate the value of non-cash compensation and determine whether it should be classified as separate or community property, expert assistance from a forensic accountant is often necessary.

Spousal Support

The compensation received by each party during a divorce proceeding has a direct impact on whether one party is entitled to or required to provide spousal support. In Texas, spousal support can be awarded in certain situations, such as when the marriage lasted for ten or more years, and the spouse seeking support lacks sufficient income and property after the divorce to meet their needs. However, it is presumed that this type of support is not necessary. The presumption can be challenged if the party seeking support can demonstrate that they have tried persistently to earn sufficient income to provide for their needs or have attempted to develop the necessary skills to do so.

If the court decides that support is necessary, it will order periodic payments based on the future income of the other party. As such, the compensation earned by both parties now and in the future is a crucial factor that the court considers when determining whether to award spousal support. Additionally, the amount and duration of support to be awarded will also depend on the compensation and financial resources of each spouse, as well as the ability of the spouse seeking support to generate an income.

Speak with an Experienced Divorce Attorney

Many marriages fail due to disagreements over finances, and these disputes can continue during the divorce proceedings. If you or your spouse are considering ending your marriage, it's wise to consult with a divorce attorney to explore how income and assets earned by either party may impact the dissolution process. The experienced attorneys at Wilson Whitaker Rynell have a strong track record of managing complex divorce cases, and we will work diligently in pursuit of the most favorable outcome possible. Our firm represents clients in divorce cases in various Texas cities, including Dallas, Austin, Houston, Fort Worth, and all cities within Dallas County, Tarrant County, Collin County, and Denton County.