Maintenance and Income-Producing Assets in Texas Divorce

Warren Buffet once remarked, “If you don’t find a way to make money while you sleep, you will work until you die.” Many individuals accumulate enough wealth that subsequently generates sufficient income to sustain them…until they face a divorce. The division of this wealth can often provide a comfortable living (or at least cover a significant portion of the divorced individual’s expenses). So, do income-producing assets negate the need for spousal maintenance (known in many places as alimony)? Or do these assets mean there’s even more maintenance to be paid from that income post-divorce in Texas?

Is There So Much Assets Awarded That Neither Spouse Needs Maintenance?

In Texas, the assets awarded during a divorce can influence whether the court decides to grant spousal maintenance. Before determining the amount of maintenance, Texas courts must consider if the assets awarded to either party make maintenance appropriate. According to the Texas Family Code § 8.052, the court considers the spouse’s ability to provide for their minimum reasonable needs independently, considering their financial resources on dissolution of the marriage.

If the assets awarded generate significant income that undoubtedly meets the spouse’s needs, maintenance might not be necessary. However, if the assets don’t yield such clear and substantial income, the court may grant maintenance based on the guidelines set out in the Texas Family Code.

Eligibility for Maintenance in Texas

In Texas, not every spouse is automatically entitled to spousal maintenance. The Texas Family Code sets specific eligibility criteria that a spouse must meet to be considered for maintenance. Here’s a breakdown of the eligibility requirements:

  1. Insufficient Resources: The spouse seeking maintenance must lack sufficient property, including the spouse’s separate property, to provide for their minimum reasonable needs.
  2. Circumstantial Eligibility: One of the following circumstances must apply:
    • Domestic Violence: The spouse from whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that constitutes family violence against the other spouse or the other spouse’s child, and the offense occurred either within two years before the date of filing the suit or while the suit is pending.
    • Duration of Marriage: The couple was married for 10 years or longer, and the spouse seeking maintenance lacks the ability to earn sufficient income to provide for their minimum reasonable needs.
    • Disability: The spouse seeking maintenance has an incapacitating physical or mental disability that prevents them from earning sufficient income to provide for their minimum reasonable needs.
    • Child’s Disability: The spouse seeking maintenance is the custodian of a child of the marriage (of any age) who requires substantial care and personal supervision due to a physical or mental disability, preventing the spouse from earning sufficient income.
  3. Efforts to Earn: The court may also consider the spouse’s efforts to earn sufficient income or develop necessary skills while the proceedings are ongoing.

How Is Maintenance Calculated When Income From Assets Are Not Considered?

In Texas, the court determines maintenance based on various factors, including each spouse’s ability to provide for their minimum reasonable needs. The Texas Family Code § 8.055 provides a guideline for the maximum amount of maintenance, which is the lesser of $5,000 or 20% of the paying spouse’s average monthly gross income.

Income from assets should be considered when calculating maintenance. The Texas Family Code defines income to include revenue from all sources, including investments.

Income From Assets And Non-Guidelines Maintenance In A Texas Divorce

People with substantial assets often have matching incomes. For higher incomes, courts might deviate from the standard guidelines. Any non-guidelines maintenance award allows the court to determine maintenance based on fairness, not just a formula.

The income from any asset awarded can potentially reduce the necessary maintenance to meet that party’s needs. However, a smaller asset award might necessitate a significant maintenance award.

Income Producing Assets And Paying Maintenance In A Texas Divorce

The spouse paying maintenance might also be awarded income-producing assets. In Texas, all of a maintenance payer’s income should be considered. However, there’s a debate about “double dipping” – when an asset is awarded to one spouse and then also considered as a source of income for maintenance purposes.

Despite this debate, Texas law doesn’t explicitly prohibit considering income from awarded assets for maintenance purposes. However, various factors influence the final decision, such as the needs of each party, their earning capacities, the standard of living during the marriage, the marriage’s duration, and more.

To ensure your interests are best represented, it’s crucial to work with a knowledgeable Texas family law attorney who understands these nuances.

To retain an experienced Texas divorce lawyer for your divorce or child custody case in Dallas, Denton, Collin or Rockwall County, please schedule a consultation with us today.