How could my job affect my divorce outcome?

 Posted on March 01, 2022 in Child Support

Texas spouses undergoing a divorce have three main legal issues to work out in their divorce decree. These include establishing conservatorship (custody) for their children, dividing assets and debts, and sharing future income.

If you are the family's breadwinner, there's a strong chance you may end up paying child support and spousal maintenance. If that's the case, it's crucial to understand how any career-related changes affecting compensation could impact your support requirements.

Three situations that can affect support obligations

Texas uses a formula to calculate child support based on the noncustodial parent's net income and resources. The lower-earning spouse must request spousal maintenance. In either situation, it's essential to know how any changes to your income can affect these payments. Here are three scenarios:

1. You get a new job or change careers

First of all, it's advisable to avoid starting a new job during a divorce, which are two of the most stressful events we can face. From a support standpoint, you should know that your ex will likely share any pay increase, but your obligations may not be reduced if your income decreases.

2. You or your ex are fired or laid off

The reason for losing your job is the key factor here. If you were laid off through no fault of your own, such as for downsizing, the court may reduce the amount of support. But you will have to prove that matters out of your control compromised your income.

If your employer fired you for poor performance or misconduct, the court would likely hold you to the same level of support. Severance packages are typically treated as income.

Another situation to consider is if your lower-earning ex-spouse loses their job. Since Texas wants to ensure that children maintain a similar lifestyle to before the divorce, your support obligations may increase until your former partner's income returns to its previous level.

3. Are commissions or bonuses shared?

Deferred compensation may be considered a marital asset, with at least a portion – earned during the marriage – divided during divorce. However, if your employer offers annual bonuses or commissions and you have traditionally used it to pay for family expenses, courts may consider it income and include it in support calculations. It's vital that your attorney makes sure your ex's lawyer doesn’t try to “double count” it as a marital asset and income.

What if I’m retiring?

The rules for support obligations during retirement can also be complicated. Reasons also matter here, such as whether your retirement is mandatory or optional and whether you can collect retirement funds without penalty. If they are to be divided, how will that affect your support obligations? Just as in the scenarios above, a thoughtful approach and experienced legal guidance are necessary.