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TX high asset divorceIn high asset divorce cases, the disposition of real property is often a major sticking point between the estranged spouses. When dealing with large parcels of commercial or agricultural land in particular, it may be necessary to actually subdivide the property. And even after the divorce becomes final, there may still be outstanding issues related to the property that lead to additional litigation.

Ex-Husband Held in Breach of Contract Over Post-Divorce Land Sale

The Texas Second District Court of Appeals in Fort Worth recently addressed one long-running dispute between two parties who divorced five years ago. The former husband and former wife in this case held 300 acres of land in Parker County as community property. Under the terms of their divorce decree, the former wife received 123 acres from that parcel.

Two years later, the former wife signed a contract with the former husband to sell back 32 acres. The contract included a written description of the land, together with an aerial photograph obtained via Google Earth. Under the contract, the former husband agreed to pay a $35,000 earnest-money deposit, which he would forfeit to the former wife in the event of a breach.

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TX divorce lawyerThere are two questions that often come up in high asset divorce cases: First, how does a court properly characterize “community” versus “separate” property? Second, to what extent does the other party's fault in causing the divorce affect the court's division of community property?

Court: Judge Allowed to Award Ex-Wife Greater Share of Community Property Based on Ex-Husband's Infidelity

To give you some idea of how the courts address these questions, here is a recent decision from the Texas 1st District Court of Appeals. In this case, a former husband appealed a divorce judgment that awarded most of the couple's community property to the former wife. On appeal, the husband challenged both the unequal distribution and the overall characterization of some of the property.

The couple was previously married for 10 years. The former wife filed for divorce on grounds of infidelity and cruel treatment. The former husband apparently did not challenge these allegations. The trial court ultimately granted the divorce on grounds of infidelity and cruel treatment.

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TX high asset divorceWhen it comes to a high asset divorce in Texas, both parties need to take care when selling or disposing of anything that might be considered marital property. In other words, do not sell all of your jewelry or expensive electronics and keep the money hidden from your estranged spouse. If you do this, a court may consider such actions “fraudulent” and penalize you when making a final division of the marital estate.

Judge Orders Ex-Wife to Repay Ex-Husband for “Constructive Fraud”

Now, selling assets that partially belong to you may not be fraudulent in the traditional sense of that word. But Texas law does consider it a “fraud on the community.” This is another way of saying one spouse breached their fiduciary duty to the other spouse.

Here is a real-world illustration of what we are talking about. In a recent Texas divorce case, a husband filed for divorce against his wife after eight years of marriage. The couple had no children. In his divorce petition, the husband alleged his wife had sold more than $50,000 worth of “household goods, furniture, and electronics” acquired during the marriage without his consent. Basically, the husband said he returned home one day to find his house “empty.” The house itself was the husband's separate property – he acquired it before the marriage – but everything else was considered community property.

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TX divorce lawyerBecause Texas is a community property state, divorcing couples are usually required to divide all assets acquired during the marriage itself in an equitable manner. In most cases, both spouses retain access to these funds and assets while the divorce is pending, so that they can pay reasonable expenses, such as mortgage payments, utility bills, and childcare costs. Spouses who step outside of these limits could be found to have wasted marital assets, an act that is not taken lightly by divorce courts. If you are preparing for or have already filed for divorce and believe that your own spouse is wasting marital assets, you should contact an experienced high asset divorce lawyer who can ensure that your assets are protected.

What Qualifies as Wasting Marital Assets?

Known as dissipation, the wasting of marital assets during a divorce is prohibited under Texas law, which makes it unlawful to dissipate marital property by:

  • Taking out a loan that has not been authorized by the other spouse
  • Spending marital funds on vacations
  • Making expensive purchases without the other spouse’s approval
  • Withdrawing large sums of money from joint accounts
  • Giving extravagant gifts to friends and family members
  • Gambling large sums

Spouses who discover that their significant other has engaged in this type of waste in order to deprive the other party of an equal share of those assets upon divorce may have legal recourse, so it is important for individuals who find themselves in this position, to speak with an attorney as soon as possible.

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TX divorce lawyerCouples who own especially valuable or unique assets face a number of difficulties when it comes to divorce. Fortunately, individuals who find themselves in this situation do have certain tools at their disposal that can help them prepare for the property division process. Creating a property division checklist, for instance, has helped countless divorcing couples account for, categorize, value, and fairly divide their marital property. Creating a property division checklist, however, can be a difficult endeavor in its own right, so if you are considering divorce and have questions about how your marital assets will be divided, please contact an experienced high asset divorce lawyer who can walk you through the property division process.

Marital Property Categories

One of the biggest challenges faced by divorcing couples is deciding who will retain which assets. To help simplify this process, many divorcing couples are encouraged to create a property division checklist, in which they account for and categorize all of their assets. Although each couple’s property division checklist will look different, there are some basic categories under which most assets fall, including:

  • Personal property, which can include everything from home furnishings and electronics to jewelry and collectibles
  • Financial assets, including bank accounts, stocks and bonds, life insurance policies, retirement accounts, cash, and pensions
  • Real property, which includes not only the marital home, but also any vacation homes, rental properties, undeveloped land, or commercial properties
  • Business assets, including any ownership interests in a business or company equipment

Once a couple has each of these categories in place, they can go through their assets one at a time and place them in the proper category.

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