Step-by-Step Guide for Dividing Marital Assets in Texas
Monday, February 10th, 2014 and is filed under Divorce - Blog Category
As you go into your divorce, you’re probably curious about the process for dividing assets during divorce in Texas. Each state has its own legal standard for the division of assets. When you watch TV, people will often refer to getting “half of everything,” but the law is more nuanced than that. So what is the process for determining, valuing, and dividing assets for those obtaining a divorce in Texas?
Before assets can be divided in the divorce, we have to determine what they are. The initial step involves identifying all the property owned by either you or your spouse, including property that may have been obtained outside of the marriage.
Step 2: Determine which assets are community property.
Community property is defined as anything obtained during the marriage. Even each spouse’s individual earnings during the marriage are considered community property, as are any assets acquired with those earnings. Employment benefits and retirement accounts accumulated during the marriage are included in community property. Meanwhile, stock options obtained during the marriage can be community property, even if they will vest after the dissolution of marriage, but Texas law on stock options in divorce is complicated. Ask your attorney or Certified Divorce Financial Analyst about any stock options you feel should be considered community property.
If something was owned prior to the marriage or was a gift or inheritance, that would be considered separate property and protected from division. During this step, you also need to determine which debts are shared and which are separate. A debt that was incurred prior to the marriage is considered a separate debt, as is any debt against a spouse’s separate property.
Step 3: Determine value for community property.
Once it has been determined which assets are community property, value of these assets will need to be assessed. This means that homes, valuable collections, investments, businesses that are considered part of the marital estate, and debts will need to be appraised and a value of the estate determined. Make sure that you use professional, independent appraisers for each type of property to ensure that your attorney has accurate numbers for negotiating your settlement.
Step 4: Determine “just and right” division of marital assets.
In Texas, the legal standard for dividing assets in a divorce is that the division be “just and right.” How is this determined? Starting at a 50/50 split of the estate, including both assets and debts, the split is then adjusted based on a number of factors. These include:
- Whether either spouse has a disability
- Inequities in earning potential between spouses
- Who will have custody of the children
- The values of each spouses separate assets
Personal feelings can also factor into distribution of assets; one partner may value certain assets more than the other partner, and these factors will be weighed as well.
A Certified Divorce Financial Analyst can help with defining and dividing assets during a divorce, helping to ensure that you receive a settlement that is in your best interests.