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Using Cryptocurrency to Hide Assets in a Texas Divorce
What was once just a hobby for a few has turned into a significant form of investment for many. It is estimated that more than 20 million people in this country own cryptocurrency. The value of the cryptocurrency market hit an all-time high of $2 trillion in April, an obvious boom for anyone who owns crypto assets. But this popularity of cryptocurrency has also created a way for some spouses to hide assets in a divorce.
How Is Cryptocurrency Treated in a Texas Divorce?
Cryptocurrency is considered a marital asset, just like funds in financial accounts, stocks, bonds, 401(k) accounts, and IRAs. Since Texas is a community property state – meaning the marital estate is divided in half in a divorce – the value of any crypto assets the couple owns is also required to be split between the couple.
In situations where one spouse purchased crypto assets prior to the marriage, the growth in those assets may be deemed a marital asset depending on how the couple approached this growth. For example, if both spouses worked together in making decisions in purchases, investing, etc., during the marriage, then the court could rule that profits made during the marriage are not separate belonging to the spouse who purchased the original assets, but are instead marital assets.
Are You Considering a Texas Divorce?
When a marriage has broken down, it can be difficult to decide which way to turn. Do you stay and try to work through the issues that have come between you and your spouse or do you finally walk away and start a new life for yourself? There are many aspects to ending a marriage – both emotionally and legally. Before making the final decision, the following are some of the issues a person should think about when considering divorce.
Will You Be Able to Support Yourself Financially?
If you are the primary wage earner, then this may not even be a question for you to consider, but if you are a stay-at-home parent or only work part-time, you will need to consider how you will be able to cover all of your expenses after your divorce is final. If this is your situation, your attorney may recommend seeking spousal support from your spouse.
Where Will You Live During and After the Divorce Is Final?
When a couple decides to divorce, one of the spouses will usually move out of the home they share together. Will this be you or will it be your spouse? Having this plan in place before you actually begin the divorce process is important.
Tax Obligations to Consider in a Texas High Asset Divorce
There are many complex financial issues that need to be addressed in a high-net-worth divorce. Unfortunately, one of those issues is taxes. When marital assets are divided in a divorce, the IRS considers this income. This is why it is critical to have a skilled high asset divorce attorney advocating for you and ensuring your financial future is protected.
Spousal Support
Prior to 2019, spousal support payments were fully deductible for the spouse who was making the payments and the receiving spouse was required to claim the payments as income on their tax returns. However, for anyone divorced after January 1, 2019, the law was changed so that the spouse making the payments must pay taxes on this money since it is no longer deductible. The receiving spouse no longer has to report the payments as income.
Dependent Exemption
Whenever there are children in the marriage, a decision must be made in the divorce agreement over which parent will be able to claim the child as a dependent on their tax return. There are several common options that the court may order. For example, the parents may alternate years, where one parent takes the claim on even years and the other parent takes the claim on odd years. If the couple has more than one child, the option may be to “divide” the children on their tax returns.
Steps to Take If You Suspect Your Spouse of Hiding Assets
When it comes to divorce, Texas is a community property state. This means that the marital estate is supposed to be divided 50/50. Unfortunately, many spouses do not feel that their spouse is entitled to half of everything the couple owns and will do all they can to prevent that from happening–even if what they are doing is illegal. If you suspect your spouse is hiding assets, there are steps you can take to determine how they are doing it and where the assets are. A skilled Austin complex divorce attorney can help.
Steps Your Attorney Can Take
During the divorce process, there are many types of legal documents and records that must be shared between both parties. Many of these documents are handed over during the discovery phase. All information exchanged between spouses is done so under oath and consequences of intentionally omitting or covering up information can result in serious consequences.
Can Extensive Cosmetic Surgery Be Deemed Asset Dissipation in a Texas Divorce?
One of the most contentious part of a high asset divorce is the division of assets. Although Texas is a community property state – which means all assets are divided 50/50 – it is not uncommon for some spouses to do everything they can to try to keep more of the marital estate “pie” for themselves by hiding assets. Other spouses commit asset dissipation. The legal definition of dissipation of assets is “The use of an asset for an illegal or inequitable purpose, such as a spouse’s use of community property for personal benefit when a divorce is imminent.”
In some divorces, the spouse will hide their asset dissipation, but in other cases, the spending is obvious. One of the more common obvious signs is when a spouse begins spending money from the marital estate on elective cosmetic surgery.
The Use of Marital Estate Funds for Cosmetic Surgery
It is quite common for a person going through a divorce to also begin to go through some physical changes, especially if they had been married for some time. They may begin working out more consistently, change the color of their hair, begin dressing in a different style, etc. In some cases, this self-improvement journey can also result in undergoing cosmetic surgery.
Steps to Take When Served with Surprise Divorce Papers
For many couples who decide to divorce, the decision to end the marriage is usually a mutual one. While it may be one spouse who finally makes the decision to file, there has usually been some discussions about the dissatisfaction both spouses have with the marriage. However, there are also situations where one spouse files for divorce and the other spouse is completely blindsided by the legal action. In these cases, it is important for the spouse being served to act quickly and obtain legal representation in the event the spouse used the surprise “attack” for malicious reasons, such as hiding marital assets or interfering with a fair custody agreement.
Child Custody
If you and your spouse have children, the surprise divorce filing could also be an attempt to get the upper hand in any child custody decision the court makes, especially if your spouse had already made arrangements to move with the child out of the marital home, with or without your knowledge. The important thing to remember if this happens is that even if your spouse has left with your child, the courts will have the final say in custody issues, regardless of your spouse’s surprise move.
Preparing for a Texas Divorce
When a couple with a high net worth makes the decision to end their marriage, it is not uncommon for the divorce process to become complex and drawn out. Along with the “normal” acrimony couples may have due to the breakdown of the relationship, now there is the added stress and frustration of child custody, the division of assets, and other issues that may need to be decided. This is why it is important to have a seasoned Austin high net asset divorce attorney representing you.
Having a Long-Term Plan
One of the critical components for a successful outcome of your divorce is to have a long-term plan that addresses child custody, child support, division of assets, division of property, and spousal support. Working with your attorney and putting a solid strategy in place is one of the best ways to protect the interests of your children, have a less contemptuous divorce, and achieve the best possible outcome for you and your children.
How to Determine the Value of a Family Business in a Texas High Asset Divorce
One of the most complex parts of a high asset divorce is the division of assets and property. This division becomes even more complex when there is a family business involved. Since Texas is a community property state and in order to ensure the division of the marital estate is equal, it is critical that the parties have an accurate dollar amount of the company’s value.
How Is the Value of a Family Business Determined?
There are three types of methods that high asset divorce attorneys can use to determine the actual worth of the business – asset, market, or income valuation. Business valuations are usually conducted by either a certified public account (CPA) or an appraiser, and that person will determine which of the three approaches will work best for your family business.
With an asset valuation, all of the assets of the company are listed. This includes the intellectual, the physical, and the personnel. This is the best type of valuation for companies that are fairly young and has not really begun showing a profit yet.
Can I Get a Divorce in Texas If I Am Pregnant?
The recent decision by the U.S. Supreme Court regarding Roe v. Wade has triggered a firestorm of both information and misinformation, from both sides of the political spectrum. One piece of information that recently went viral on Twitter was a post about it being illegal in five states to get a divorce if you are pregnant. One of the five states listed was Texas. This tweet has led many Texans to wonder if this is true or not.
Divorce When Pregnant
Although there is nothing in Texas law that specifically forbids a divorce while the wife is pregnant, the truth is that it is very rare for a divorce to be granted before the child is born. There are certain decisions that need to be made when a divorcing couple has a child, including child custody, visitation, and child support. If a divorce is granted prior to the birth of the child, those issues would not normally be part of the litigation and divorce agreement and would necessitate the couple having to go back to court after the child is born. Or, if they were included in the original divorce agreement and there ended up being special circumstances, those issues may have to be relitigated. Relitigating is something courts want to avoid, so any decisions about the divorce are held off until the baby has arrived.
Key Issues That Should Be Addressed in a Texas Parenting Plan
When a couple makes the decision to divorce, one common concern they often have is how to make sure the divorce will have the least amount of negative impact on their children as possible. It is well documented how much of an effect divorce and child custody has on families, with new living arrangements often needed, new family dynamics, and new roles for everyone. The smoother these changes occur, the better adjusted children will be.
It is not always easy to work together with someone you are divorcing, given the acrimony that may be present, however, that should be the goal when it comes to co-parenting. One of the most important tools that can help attain that cohesiveness between parents is to create a parenting plan that you both can agree on.
Creating a Parenting Plan
As you negotiate custody with your soon-to-be ex-spouse, you will also want to set down guidelines regarding how this shared custody will work. Every parenting plan is different because it should be tailored to your specific situation. Some parents may need to have only a brief overview of what is expected, while other parents will need extensive details included in their plans.
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