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TX divorcel lawyerWhen you are getting ready to file for divorce, or your spouse has recently filed, you should be thinking carefully about the divorce lawyer you will hire to represent you. For high net worth couples in Austin, your choice of a divorce attorney is particularly important given that your case is likely to have complications due to the high value of your assets and earnings. You may be wondering: what makes a high asset divorce different? And you might even be thinking that any divorce lawyer familiar with community property division and child custody issues under the Texas Family Code can handle your case.

However, it is essential to keep in mind that there are various issues that do in fact make high asset divorces different from other divorces, and you should always have a Texas high asset divorce lawyer on your side who has years of experience assisting clients in high net worth divorces in and around Austin. The following are just a few of the ways in which high asset divorces are different from divorces involving spouses with lower incomes and assets.

Valuation of Complex Property

High asset divorces often involve high-value complex property that can be difficult to value without the assistance from an appraiser. For example, high asset divorces in Austin may involve businesses that need to be appraised, valuable art collections that need to be appraised for current market value, or real estate in different parts of the country (or even different parts of the world) that will need to be accurately appraised. Often, distinct and high-value property will need to involve multiple appraisers with experience providing valuations for niche assets.

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TX divorce lawyerHigh asset divorces in Texas are complex for many reasons, from community property that is of high-value and difficult to properly appraise to hidden assets. We often think of hidden assets as specific property, both tangible and intangible, that one spouse might try to conceal from the other spouse and from the court. For example, hidden assets often include out-of-state or overseas bank accounts or investments, business holdings, and even real estate. Yet another form that asset hiding can take is when the higher-earning spouse attempts to conceal his or her actual earnings. Income must be reported accurately to the court. If a spouse does hide the full amount of his or her income, Texas law allows the court to award the other spouse a higher amount of the community property. The spouse who hid assets can also face additional penalties.

If you do not know your spouse’s actual income and are preparing for a divorce, it is essential to work with an aggressive high asset divorce lawyer in Texas who can assist you. The following are some of the ways that you and your attorney can determine your spouse’s actual income.

Locate Tax Returns

If you have access to previous tax returns, especially if you filed jointly with your spouse, it is important to get copies of those tax returns as soon as possible. Your jointly filed tax return can allow you to determine your spouse’s reported income for those years. If you are married filing separately and may have access to both of your tax returns, you should make any copies so that you will have this information.

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TX divorce lawyerWhen you are starting to think about filing for divorce in Texas and you own substantial assets, you may be thinking about how the community property rules in Texas will result in the majority of your assets being divided between you and your spouse. Accordingly, you may be wondering whether it makes sense, or whether it is actually worth it, to hire a Texas high asset divorce lawyer in your case. You might have heard of friends who went through a divorce process on their own and were able to work out a marital settlement agreement through communication with their spouse. While there are occasionally situations in which a couple can go through a divorce relatively easily without an attorney, it is not advisable to handle a high net worth divorce on your own.

In high asset divorces in Texas, the parties will be dealing with particularly complex and valuable property, and there is significantly more money at stake. Even if you have a relatively amicable relationship with your spouse now, and she or he promises to be fair, you should know that the process can quickly become contentious if you cannot actually reach an agreement. There is also a possibility that your spouse could be concealing assets from you. The following are just some of the reasons it is essential to have a lawyer during your high asset divorce.

Locating Hidden Assets

High net worth divorces can sometimes involve hidden or concealed assets. Our firm can help to ensure that all community property is identified and classified. If necessary, we can work with you and a forensic accountant to locate any property that your spouse may be concealing.

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TX high asset divorce lawyerWhen a wealthy couple is getting divorced in Texas, each of the parties may have concerns about having assets properly classified and appraised, and one or both parties might have worries about the other spouse attempting to hide valuable assets so that they are not divided in the divorce. As you may know, under Texas law, nearly all assets acquired by either spouse after the date of marriage are considered to be “community property,” and they will be distributed between the parties in the divorce. There are many different methods for preventing a spouse from hiding assets in a divorce, and for revealing hidden assets when one of the spouses has attempted to conceal those assets.

One way that an aggressive Texas high asset divorce attorney can help is by using the process of discovery to prevent assets from being hidden or can help to uncover assets. We want to tell you more about discovery, and how some of the tools of the discovery process can help you in your high net worth divorce.

What Is Discovery in Texas?

The Texas Rules of Civil Procedure govern most matters pertaining to discovery. To be clear, discovery is a procedure in all types of lawsuits, including civil lawsuits for divorce, through which both sides can obtain information from the other side. Discovery is a process that has a wide variety of tools or mechanisms through which the other side can get evidence. Sometimes those mechanisms involve one side asking the other for specific information about a question, and sometimes the discovery process involves requesting materials or documents from the other side.

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TX divorce lawyerDivorces can be extremely contentious regardless of the income levels of the spouses or the amount of assets they share. However, high net worth divorces in Texas often are among the most contentious, given that the parties have more to lose financially than other couples who are going through the divorce process. When one or both parties realize that divorce is likely in their futures, issues about hidden assets may start to arise. If you have concerns about your spouse hiding property or trying to prevent certain assets from being classified as community property, you should reach out to a Texas high asset divorce attorney as soon as possible. At Powers and Kerr, PLLC, we routinely assist clients with this very issue and can discuss options for working with a forensic accountant to locate hidden assets.

In the meantime, we want to provide you with some useful information about recognizing when a spouse may be trying to hide assets before a divorce.

Why Would a Spouse Attempt to Hide Assets?

Why would any spouse in Austin, Texas try to hide assets before a divorce case? As you may know, Texas is a community property state. What this means is that, under Texas law, nearly all property acquired by either spouse after the date of the marriage will be classified as community property and will be subject to division in the divorce case. A spouse might try to hide assets to prevent those assets from being classified as community property and divided. There are many different ways that people can try to hide assets, and it is important to recognize the signs. If you do have concerns, you should speak with your divorce lawyer as soon as possible.

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TX high asset divorce lawyerThe first step you should take when you know divorce is imminent is to hire an experienced Austin high asset divorce lawyer. Once you have a dedicated high net worth divorce attorney on your side, it will be important to talk with your lawyer about working with financial experts on various aspects of your case. From forensic accountants to art appraisers, there are a variety of financial experts who may be able to provide necessary knowledge in your divorce case. The following are the top reasons you should consider working with financial experts in your Texas high asset divorce case.

1. Locate Hidden Assets

Locating hidden assets is one of the most important reasons to work with a financial expert in your high net worth divorce. While Texas law requires parties to provide full and complete lists of all property to be classified as community or separate property, one of the parties may attempt to hide assets by unlawfully transferring them through a gift (or otherwise) to another party or moving money between community property and separate property accounts.

Unlike some other accountants, forensic accountants have experience providing evidence for the courtroom and conducting investigations. Forensic accountants are specially trained to identify fraud and hidden assets, and to provide expert testimony about those matters.

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TX divorce lawyerWhile very few of us ever get married with the intention of later filing for divorce, Texas residents file for divorce more often than you might expect. Making plans in the event of divorce are important for Austin residents of all income levels, but planning is particularly important for wealthy Texans and high earners. We want to discuss some tips for preparing for a high net worth divorce in Austin at multiple points in time—from the time of your marriage to the moments shortly after filing for divorce. If you need assistance with your divorce, an experienced Austin high asset divorce lawyer can help.

1. Sign a Prenuptial Agreement

Under the Texas Family Code, two people who are planning to get married can enter into a prenuptial (or premarital) agreement. While prenuptial agreements are helpful for people at all income levels, they are particularly necessary for individuals who are high earners or would anticipate a high asset divorce in the event the marriage does not last. In a prenuptial agreement, the parties can reach an agreement about how certain assets will be divided or distributed in the event of divorce.

2. Avoid Commingling Separate and Community Property

Avoid commingling separate property and community property wherever possible. In other words, any property you acquired before the marriage, or any property acquired through gift or inheritance during the marriage, should be kept separate. Do not use those assets to contribute to community property, such as investing separate property into a community property account or by using separate assets to improve the marital home.

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TX divorce lawyerHigh asset divorces in Austin, TX are complicated for numerous reasons, from matters of property division to alimony. One of the more complex and contentious issues that can arise in a high net worth divorce is the matter of hidden assets. Particularly in high asset divorces where one of the spouses was the primary earner during the marriage, the other spouse may have concerns about hidden or concealed assets. When the non-primary earner does not control the finances of the marriage and does not regularly manage business issues or jointly owned accounts, it can be difficult to know exactly what the assets from the marriage look like in sum. Yet discovering hidden assets can be extremely important given that Texas is a community property state.

Under Texas law, couples who get divorced in Texas should know that community property is owned equally by the spouses. Accordingly, courts divide the property recognizing that both spouses have an equal interest in it while also taking into account what kind of division would be fair to both parties. If there are substantial hidden assets, one of the spouses could end up losing out on property to which she or he is entitled. While assets can be hidden in any divorce—regardless of the extent of the property owned by the married couple—hidden assets in a high net worth divorce can total tens of thousands of dollars. As such, it is essential to ensure that neither spouse is hiding assets in the divorce.

Know Where to Look for Hidden Assets

Even if you do not immediately suspect your spouse of hiding assets, it is important to know where to look for “red flags.” For example, itemized deductions in Schedule A in past tax returns could reveal property that you did not know existed. Or, for instance, details about assets that have generated interest and dividends (located in Schedule B) could reveal that your spouse has more money than she or he has listed. Tax returns can also provide information about business profits and losses (Schedule C), as well as capital gains and losses (Schedule D). Information about capital gains and losses can provide information about certain securities in which your spouse has invested, as well as stocks or real estate.

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