The only divorce term that applies to virtually every case is the division of marital property, and even in a fairly straightforward divorce, the matter can be incredibly complex.
If you’re facing a divorce, it’s important to know that the division of your marital assets could play a critical role in your future finances, which makes working closely with an experienced Round Rock property division attorney from the start the best strategy.
What is community property?
Some couples carefully keep their assets separate throughout their marriage – thinking that, as a result, they don’t have what’s called marital property – but that isn’t how the law works.
Texas is a community property state, and this means that anything you come to own, anything your spouse comes to own, and anything that the two of you together come to own while you’re married belongs to both of you.
It doesn’t matter who made the purchase, whose name is attached, or who makes use of the asset – such as a vehicle that only one spouse drives. If you acquired it during your marriage, it is marital property with very few exceptions that include the following:
An inheritance or gift that one spouse alone received
A property or asset that one spouse purchased with funds that belonged to them alone
The pain and suffering compensation that either spouse received in a personal injury claim that was initiated during the marriage
If you’ve been married for any length of time, you almost certainly have community property that will need to be addressed in your divorce.
How do I know the extent of our community property?
If your spouse handles the finances in your home, the scope of your assets may not be clear to you, and compiling financial documentation early in the divorce process is critical. In fact, if you’re planning on filing for divorce, it’s to your advantage to gather as much information about your finances as you can before you file.
While you’re entitled to this information after you file, obtaining the documentation you need over the course of your divorce can be time-consuming. This generally translates to being more costly in the context of your divorce and can leave you more vulnerable to financial wrongdoing on your divorcing spouse’s part.
The higher your overall assets are, the more complicated they are – such as if there is a business involved. And the less direct involvement you have with your family’s finances, the more challenging it will be to accurately assess what you’re dealing with in the first place.
The higher and more complicated the assets, the more likely it is that you will need to have professional valuations conducted and potentially require professional forensic accounting.
The bottom line is that you can’t fight for your financial rights if you don’t know what you’re fighting for. Establishing the extent of your community estate early on is key, and your trusted property division lawyer will help make this happen.
How will our assets be divided?
In Texas, community property must be divided between the spouses in what the state considers a just and right manner. This means that your assets must be split between you fairly – in relation to a wide range of relevant factors. Sometimes, this means splitting assets between spouses evenly, and sometimes, it doesn’t.
Factors like the following guide the fair division of assets in Texas:
The length of the marriage
Each spouse’s separate estate, which is discussed below
Each spouse’s income and the degree of any earning discrepancy
Each spouse’s earning potential
Whether wrongdoing played a role in the dissolution of the marriage, which can potentially affect property division even in a divorce that’s based on irreconcilable differences – or a no-fault divorce
The contributions each spouse made to the marriage, including in the form of homemaking and caring for the children
The division of property in your case will be unique to the circumstances involved, and proceeding with caution and the skilled legal representation of your focused property division attorney is in your best interest.
Do either of us own separate property?
If you or your spouse owned something of value prior to your marriage and kept it strictly separate during your marriage, it remains that spouse’s separate asset. This can include real estate, a business, land, or anything else of value, but – as with everything else related to divorce in Texas – it’s complicated.
Proving the Separate Nature of the Asset
To begin, it’s important to know that the State of Texas presumes everything you own as a couple is marital. This means that, if either one of you is claiming separate assets, you’ll need to prove their separate nature.
This involves providing evidence that traces the asset’s ownership history. Any commingling of marital and separate property can do serious damage to a claim that an asset is separate property.
The Commingling of Separate and Marital Assets
Most couples take a yours, mine, and ours approach to marriage and don’t give much thought to keeping separate assets strictly separate. This means that the assets that they may have assumed were separate might be less separate than they thought.
The more commingling there is going on, the greater the risk that separate assets will be categorized as being at least partially marital.
Commingling can mean a lot of things, but prime examples include all the following:
Failing to keep the financing for separate assets separate from the family’s finances
Using marital funds to grow, maintain, or finance a separate asset
Managing a separate asset, such as a business, without taking a salary – which deprives the family of the earnings that would have been generated if the asset wasn’t separate
Simply lumping everything together and treating everything like marital property, which isn’t uncommon in marriages
Establishing that an asset is actually separate can be a tall order, but fiercely advocating for your financial rights can make a serious difference in your financial future, which makes it worth the effort.
The Increased Value of the Separate Asset
You should also know that the amount a property increases in value during your marriage is likely to be treated as a marital asset. This means that even an asset you can clearly demonstrate belongs to you alone may be both separate and marital property.
Distinguishing which part is marital and which part is separate comes down to establishing the asset’s value at the time of your marriage as well as its value at the time of your divorce and splitting the difference fairly, which adds an additional layer of complication.
For example, if either of you brings a retirement account into the marriage with you, its value when you marry belongs to the original owner. The amount that the account grows in value during your marriage, however, will be treated as community property that must be divided between you fairly.
What are my priorities in terms of property division?
If you’re facing a divorce, you have specific concerns related to property division, and some of them may focus on specific assets. For example, if you are invested in staying in your family home – perhaps in the role of the primary custodial parent of your shared children – it’s important to strategize a path forward that could accommodate this goal.
When you have a plan in relation to your negotiations, it can afford you considerably more leverage because it comes with the insight of knowing where to make compromises and where to hold firm.
Your dedicated Round Rock divorce lawyer will help you determine which goals are in the realm of possibility and will help you craft a negotiation strategy that paves the way toward achieving those priorities that are within your reach.
If your overall goal is simply a fair division of assets that protects your financial rights, it will likely come down to crunching the number and demonstrating what’s fair in your unique case.
As long as your soon-to-be ex is willing to engage in fair dealings, which includes being transparent and truthful, hammering out a division of marital property that works for both of you should be manageable with the skilled legal guidance of your respective property division attorneys.
Can I trust my spouse not to engage in financial wrongdoing?
The truth is that the stress of divorce can inspire people who are generally trustworthy to become less so, and finances are a common trigger. The greater your spouse’s involvement in your marital finances – and the less involvement you have – the more risk there is that they could engage in financial infidelity without being discovered.
This is yet another reason why establishing an accurate accounting of your marital estate early on is so important. Your knowledgeable property division lawyer has seen it all when it comes to financial tricks in divorce and will employ due diligence to help ensure that it doesn’t happen to you.
If you sense that your spouse isn’t on the financial up and up, don’t hesitate to discuss the subject with your attorney. It might be time to hire a forensic accountant to join your team.
Will our case go to court?
Most divorces, including those that involve complex property division terms, are settled out of court in Texas, and yours is very likely to also settle. If negotiations between the two of you and your respective lawyers don’t get the job done, mediation may.
At mediation, you and your divorcing spouse will come together – along with your respective property division attorneys – in an effort to reach mutually acceptable terms in a process that’s designed to support effective negotiations.
A professional mediator who serves in the role of a neutral third party will guide the process, and the goal is to inspire you and your divorcing spouse to open your minds to the possibility of greater compromise by building on the agreements you’ve managed to reach so far.
Any professional witnesses either of you are working with, such as valuation experts or forensic accountants, can help you bolster your positions during the mediation process. Mediation can help you get a much clearer idea of what would likely happen at court, which can be very motivating in terms of digging deeper when it comes to negotiations.
The benefits of resolving your property division case at mediation rather than in court include all the following:
The process is much less formal than going to court, which can help take much of the edge off.
You won’t be at the mercy of the court in terms of scheduling, which means your divorce could be finalized in a timelier manner.
The mediation process is private, while court records are a matter of public information.
You can’t be pressured into accepting terms in mediation that don’t work for you, which means that mediation is only legally binding if you and your divorcing spouse both sign off on the terms you reach agreements regarding.
Mediation can turn down the emotional heat on your divorce, which can help make things easier on everyone, including your children.
Mediation brings everyone involved in your divorce into one location in which a controlled negotiation process takes place, and this fact alone can make a big difference for many divorcing couples.
Property division in divorce is paramount, so the best course of action is to take it seriously from the outset.
Seek the Skilled Legal Guidance of an Experienced Round Rock Property Division Lawyer Today
Brett Pritchard at The Law Office of Brett H. Pritchard is a distinguished Round Rock property division attorney who appreciates just how significant your case is to your future and will leave no stone unturned in his focused efforts to protect your financial rights.
Learn more about what we can do to help by contacting or calling us at 254-781-4222 and scheduling a free consultation today.