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TX high asset divorceUPDATE: To avoid financial issues during divorce, spouses should take care when making any major decisions about money or property, including entering into any major transactions. To ensure that marital property can be fairly divided between spouses, the parties should fully disclose all relevant financial information related to their marital assets, as well as all forms of separate property. Spouses should not sell, give away, destroy, or otherwise dispose of any physical items, financial assets, or other forms of marital property. If a spouse does so, they could face consequences as described below.

Unfortunately, when a person commits fraud against their spouse, this may lead to the loss of assets, limiting the financial resources that are available during the property division process. To prevent this, a spouse may ask the court to issue a temporary financial restraining order. This type of court order will prevent both spouses from making any major financial transactions or taking any actions that could cause financial harm to their former partner. Spouses will be permitted to make regular expenditures to cover the costs of daily life, and as they work through the divorce process, they can ensure that the majority of their marital assets will not be affected, allowing them to reach a settlement that is fair and equitable for both parties. If you believe that a temporary restraining order is needed in your divorce, or if you need to address other complex property issues, an Austin divorce lawyer can provide you with legal help and representation.


When 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.

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TX divorce lawyerThe breakdown of a marriage will often involve strong emotions and heated disputes between spouses, and this can sometimes lead people to behave inappropriately. In some cases, a spouse will waste money or act in ways that result in the loss of marital assets. This is known as the dissipation of marital assets, and it can take a variety of forms. A spouse may make large purchases solely for their own benefit, or they may spend money while having an affair. In some cases, spouses may even purposely destroy property or otherwise waste money or assets in an attempt to harm their spouse. These actions can affect the division of marital property during the divorce process, and complex property litigation may be needed to address this issue.

Fraud on the Community

Asset dissipation is a form of fraud against the “community” of a couple’s marriage, although it will usually not result in criminal charges. In some cases, dissipation may constitute actual fraud if a person acted dishonestly with the purpose of depriving their spouse of the use of marital assets. However, in most cases, dissipation is considered “constructive fraud on the community,” meaning that a person used, gave away, or otherwise disposed of marital assets without their spouse’s consent.

If a family court judge determines that a spouse has committed fraud on the community, they will determine the value of the “reconstituted estate,” which is the total value of the couple’s assets before the dissipation occurred. The reconstituted estate can then be divided between the spouses, and a judge may award a greater share of the assets to the wronged spouse, require the spouse who committed fraud on the community to make a monetary payment to the other spouse, or both.

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TX high asset divorce lawyerDuring a high net worth divorce, spouses will not only want to make sure their own financial interests will be protected, but they may need to take steps to ensure that other family members are not negatively affected by the end of their marriage. Those who come from wealthy families will want to make sure their family’s assets will not be lost during divorce proceedings. Spouses who have acquired significant assets during their marriage may want to ensure that certain assets will be preserved and passed on to their children or other family members. Business owners, executives, and those with large incomes may need to determine how to divide their marital assets in a way that will allow family businesses to remain in operation while making sure they and their families will have the resources they need in the years to come.

Wealth Protection Methods

The divorce process can be complex, and it often involves strong emotions and contentious disputes. This can make it difficult to determine how to divide marital assets fairly, and drawn-out divorce proceedings may end up using up a great deal of wealth that could be put to better purposes elsewhere. In many cases, the best way to make sure family wealth is protected is to take steps to do so before either spouse begins to consider getting divorced. Some ways that spouses can protect their family’s assets include:

  • Marital agreements - If a person enters a marriage while owning significant assets, it is often a good idea to create a prenuptial agreement, which can specify how both community property and non-marital assets will be handled during a potential divorce. This can be a good way to ensure that existing family wealth is protected. For those who acquired valuable assets during their marriage, such as a business or professional practice, a postnuptial agreement can provide similar protections and decide how business assets and other property will be divided if a couple chooses to get divorced in the future.
  • Asset protection trusts - To avoid the commingling of separate property owned by one spouse with community property owned by both spouses, assets may be placed in a trust. In most cases, a person will create this type of trust before getting married. By removing assets from their possession and placing them in the control of a trustee, they can ensure that these assets will be protected from division during divorce. When creating an asset protection trust, a person can provide instructions for how the assets should be distributed to beneficiaries, which may include themselves, their children, charitable organizations, or others.

Contact Our Austin High Asset Divorce Attorneys

If you are looking to protect the wealth owned by your family or other types of assets, the attorneys of Powers and Kerr, PLLC can explain your options and help you put the proper protective measures in place. If you need to determine how to divide valuable assets during your divorce, we can provide you with representation, help you negotiate a workable divorce settlement, or advocate on your behalf during complex property litigation. Contact our Austin property division lawyers today by calling our office at 512-610-6199.

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TX divorce lawyerEvery divorce case will involve financial issues that a couple will need to address as they divide the property they own and determine whether one spouse will pay financial support to the other. However, high net worth divorces will often require spouses to consider complex financial matters related to high-value assets, multiple real estate properties, investments, business interests, and different forms of income, including bonuses, executive compensation, and retirement plans. When determining how to handle these concerns in a way that ensures that each spouse receives a fair and equitable share of the marital estate, it is important to consider tax issues that can affect the spouses both during their divorce and in the future.

Common Tax Concerns in High Asset Divorces

Some tax-related issues that divorcing couples with a high net worth may need to address include:

  • Capital Gains Taxes - Certain types of assets may be liquidated during the divorce process to ensure that their value can be divided between spouses. If these assets appreciated in value since they were acquired, capital gains taxes may apply to the profits earned, and spouses should be sure to understand who will be responsible for paying these taxes. When selling a marital residence, up to $250,000 of gains can be excluded from capital gains taxes when filing as a single person, or $500,000 can be excluded when filing as a married couple. These exclusions will be available if the person or couple lived in a home for at least two of the previous five years prior to the sale.
  • Carryforwards - Business owners and others with high incomes can realize tax benefits by carrying forward certain types of losses, expenses, or deductions and applying them to future tax years. These may include carryforwards for capital losses, investment interest expenses, charitable contributions, or a business’s net operating losses, These carryforwards are considered marital assets, and they should be divided between spouses along with other types of marital property.
  • Retirement Assets - Either or both spouses may own retirement savings accounts, or they may be eligible for pension benefits. Funds from these retirement accounts may be transferred between spouses as part of their divorce settlement, and to avoid paying taxes on these withdrawals, spouses should be sure to use Qualified Domestic Relations Orders (QDROs). Spouses may also want to work with a financial advisor to understand whether taxes will apply to pension benefits or other retirement assets either at the time of the divorce or when they begin using these benefits after retirement.

Contact Our Austin, TX Divorce Tax Planning Lawyers

With the proper planning, you can ensure that you will be on good financial footing following your divorce. If you and your spouse have a high net worth, you will want to be sure you have considered all aspects of your financial situation, including the income you earn, the assets you own, and the taxes that will apply both before and after your marriage ends. The attorneys of Powers and Kerr, PLLC can advise you of the issues that you will need to address, and we will help you negotiate a divorce settlement that will meet your needs, or we will advocate for your interests when litigating your divorce in court. Contact our Austin high asset divorce attorneys at 512-610-6199 to schedule a consultation and learn how we can help with your case.

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TX divorce lawyerWhen couples get divorced, one issue that they will need to deal with is how to divide the property they own. In some cases, this may involve complex property litigation, especially if a couple has a high net worth or owns complex assets. One issue that can complicate this process is distinguishing between community property and separate property. In some cases, these forms of property can become commingled, making it difficult to determine what types of property should or should not be divided between the spouses.

Examples of Commingled Property

Community property includes all property or assets that either spouse acquired while the couple was married, while separate property includes property the spouses owned before they were married, as well as assets received by a spouse as a gift or inheritance. Separate property can become combined with community property in a variety of ways, including:

  • A spouse may own a house before they were married, but during the couple’s marriage, both of the spouses may have contributed to ongoing mortgage payments or improvements, maintenance, or repairs to the home. During divorce, the house may still be considered the separate property of the spouse who originally owned it, but the other spouse may be reimbursed for their contributions to the equity in the house or the improvements that caused the house to increase in value.
  • A spouse may receive an inheritance during the couple’s marriage, and this amount may be deposited into a joint bank account, with both spouses making additional deposits to and withdrawals from the account during the marriage. Under Texas law, it is presumed that community funds are withdrawn from joint accounts before separate funds, so if the balance of the account is higher than the amount of the inheritance, the inherited funds will be considered separate property. If the balance of the account is less than the amount inherited, the spouse who received the inheritance may retain ownership of the full balance.
  • A spouse may use funds or other assets owned before getting married to make investments, and money earned from these investments may be reinvested or used in other ways during the couple’s marriage. Distinguishing between community property and separate property may be complex in these cases since dividends earned during the marriage will usually be considered community property. To determine what portion of these assets are considered separate property, it will be necessary to trace assets back to their source and demonstrate that they originated from separate property.

Contact Our Austin, TX High Net Worth Divorce Attorneys

If you own complex assets or have a high net worth, determining how to divide property with your spouse during your divorce may be a complex undertaking. At Powers and Kerr, PLLC, our attorneys can help you understand how Texas law applies to your community property and separate property, and we will make sure these matters are addressed properly during your case. Contact our Austin property division lawyers today by calling 512-610-6199.

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