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TX high asset divorce lawyerThe division of community property is a complicated process in any Texas divorce, but it is often particularly complex in high asset divorces in the state. If you are planning for a divorce or you have just begun the process of filing, you probably already know that, under Texas law, Texas is a community property state. What does this mean for your divorce and your property? In short, most property acquired after the date of the marriage will be classified as “community property,” or property of the community (the community being your marriage). Property acquired prior to the date of your marriage, as well as certain property acquired after the date of marriage, will typically be classified as separate property. In Texas, community property is divided in a divorce in a manner that is “fair and just,” according to the Texas Family Code.

What, then, is commingled property? The term commingled property refers to debts or assets that have characteristics of both separate property and community property. In a high net worth divorce, dealing with commingled property can get complicated, but an aggressive Austin high asset divorce attorney can help. In the meantime, we want to provide you with more information about commingled property and to discuss how courts handle it.

How a Court Will Handle Commingled Property in a High Asset Divorce

How will a court handle commingled property in your high asset divorce? The answer to that question depends largely on just how commingled the property has become. The level or amount of commingling will probably depend upon a few different factors, including, for instance, the type of property and the length of time for which it has been commingled. If the court can trace out, or separate, the community property from the separate property, it will likely do so. However, if the property is so commingled that it is not feasible to determine what amount of the property is community property and what amount is separate property, all of the commingled property could end up being classified as community property and divided between the spouses.

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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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TX divorce lawyerAll divorce proceedings are complex and potentially emotional for the parties involved. High asset divorces, however, tend to come with their own set of unique issues. For instance, hiding assets is much more common in divorces where one or both spouses have significant, unique, diverse, or particularly valuable assets. Fortunately, there are steps that divorcing parties can take to ensure that their spouses are not attempting to hide assets, so if you and your spouse have decided to file for divorce and you are concerned that he or she may be attempting to hide or waste assets, it is critical to speak with an experienced high asset divorce attorney who can explain these steps to you and ensure that your property is protected.

Most Common Methods of Hiding Assets During Divorce

Unfortunately, it is not uncommon for one spouse to try and hide assets from the other during divorce by utilizing one or more of the following methods:

  • Transferring marital assets out of a joint account into a newly created or already existing account that is only in one spouse’s name;
  • Transferring cash or investments to a friend or relative’s account until the divorce is finalized;
  • Purposely overpaying the IRS and instructing the agency to use the current year’s refund for next year’s taxes;
  • Taking cash withdrawals on debit cards;
  • Delaying any promotions, raises, or bonuses until after the divorce is finalized;
  • Delaying receipt of commission payments; and
  • Purposely failing to report employer retirement accounts or stock options to the financial analyst.

Couples who own an interest in a business have even more options when it comes to hiding assets, including:

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TX divorce lawyerDuring Texas divorces, a couple’s marital property is subject to division. In most cases, this means that divorcing spouses must grapple with who will retain a variety of assets ranging from houses and vehicles to financial assets, such as bank accounts and pensions. Of these types of assets, financial property is often the most difficult to divide. This is especially true for pensions, the status of which depends on when the pension was acquired and whether a pre-existing agreement is in place. For help determining whether your own pension qualifies as marital property and whether you can expect a portion of those payments upon divorce, please contact a member of our high asset divorce legal team today.

Community Property States

Texas is one of only nine community property jurisdictions, which means that almost all assets acquired by a couple during their marriage are considered to belong equally to both parties if they later decide to divorce. The assumption in most cases is that these assets will be divided 50/50 between the parties. This rule applies to physical property, such as real estate and personal possessions, as well as financial assets like retirement accounts and pensions.

Marital vs. Separate Property

In general, retirement assets earned during a marriage are treated as marital property, including:

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Texa high asset divorce attorneyHaving a professional practice can make the divorce process much more difficult, as the parties are usually required to value and divide not only personal property but also professional assets and business interests. These types of challenges are best handled by an experienced high asset divorce attorney, so if you have decided to file for divorce and either you or your spouse has a professional practice, please contact our legal team for an initial evaluation of your case.

Dividing Marital Property

Under Texas law, couples who dissolve their marriages must divide all marital assets equitably. This applies to the contents of bank accounts, retirement funds, stocks, real estate, personal belongings, and even business interests. In fact, even when a spouse doesn’t have a specific interest in a business, as is usually the case when one spouse runs a professional practice, he or she could still have a claim to a portion of the business’s value, although not to the practice itself.

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