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TX high asset divorce lawyerWhile the art scene in Austin is not quite like the art scenes in New York or London, many Austin residents have large collections of valuable artwork, including sculptures, paintings, and other art objects. Many married couples in Austin collect art together, and their homes are filled with their collection. In the event such a married couple decides to get divorced, the matter of the art collection can become extremely contentious. Dividing an art collection can be quite a battle, especially when the parties do not want to see the collection divided at all. To be sure, many people who collect art feel that the collection is priceless and do not want to see any of it sold or distributed. Yet in a high asset divorce in Austin, all community property will need to be distributed between the spouses. And while the parties may personally believe that the collection is priceless, it is possible to place a market value on almost any work of art for the purposes of dividing it in a divorce. Let our Texas high asset divorce lawyers tell you more about dividing art collections in a Texas divorce.

Recognize That the Whole Collection May Be Community Property

As you may know, Texas is a community property state. What does this mean for a high asset divorce and an expensive art collection? Under Texas law, nearly all property (aside from a few exceptions) acquired after the date of the marriage is classified as “community property.” In a Texas divorce, all community property is divided between the spouses. For many married couples in Austin who have been collecting art for years or even decades, most if not all of the collection is likely to be classified as community property and will be divided as part of the divorce.

Determine the Date of Purchase and Other Documentation

If you believe that one or more pieces in the art collection are not community property, you will need to get documentation to prove it. If you purchased the painting prior to the marriage, it is important to find any receipts you have for the piece. Even if you cannot locate a receipt, it may be possible to work with your Austin divorce attorney to gather evidence that proves the painting was in your possession long before you got married and that, accordingly, it should not be part of the division of community property.

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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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