Child support in a high asset divorce can work a bit differently than child support for a low-income family or a middle-class family. While Texas’s child support law still applies, the calculation for and amount of child support will likely be quite different. If you are anticipating a high net worth divorce in Austin, Texas, it is important to discuss all aspects of the divorce process with an aggressive Texas high asset divorce lawyer. In the meantime, we want to say more about child support in Texas and how high net worth parents should be thinking about child support in relation to their divorce.

General Information About Texas Child Support Laws

Before we explain how a high asset couple should be thinking about child support in their divorce, it is essential to understand how child support works under Texas law. First, Texas is one of only a handful of states that still uses a “percentage of income” model. While a number of states have shifted to an “income shares” model in which both parents’ incomes are used to calculate a total child support obligation, Texas only uses the income of the obligor parent’s income (the parent ordered to pay child support) to calculate the child support obligation.

In Texas, courts take a flat percentage of the obligor parent’s income as the child support amount. That flat percentage is based on the total number of children for which the obligor parent is providing support. The guidelines look like this:

While many high net worth divorces in Texas involve spouses with nearly equal earning power or separate assets, a significant number of high asset divorces also involve spouses where only one was the primary earner during the marriage. Whether the other spouse was a stay-at-home parent or simply earned significantly less in the marriage, the prospect of divorce can be extremely daunting for that spouse. Although gender roles are shifting, the non-primary earner spouse often ends up being a woman. And many women who go through high asset divorces in this position do not take all the steps they can to position themselves well financially. It is particularly important for women to consult with financial advisors more often than they do and to work with a divorce attorney who has experience handling high net worth cases.

The following are some of the reasons women should consider a financial advisor in a high net worth divorce. If you need help with your divorce case or have questions about financial matters, an experienced Austin high asset divorce attorney at our firm can speak with you today.

Not Enough Women Work with Financial Experts, But They Should

According to a new study, women do not work with financial advisors and other financial experts nearly as often as they should in divorce cases. This is even true for women who are non-primary earners who are going through high asset divorces. Indeed, over 95 percent of women do not use a financial advisor when going through a divorce despite having financial goals they want to achieve.

What makes a high asset divorce in Austin, TX  a high asset divorce? In other words, how much money does a married couple need to have in order to be considered to have a high net worth divorce? And when a married couple is anticipating a high asset divorce, how might the case differ depending upon the source of the assets and the likelihood that one or both spouses will continue to contribute to those assets in the future, even after they are divided as community property?

To be clear, not all high asset divorces are the same. For example, some involve two spouses who have both contributed significant assets to their community property through high-paying careers and family inheritances, while some involve scenarios in which only one of the spouses was the primary source of the monetary assets that make up the community property. These divorce cases can look quite different from one another, and the experienced Austin high asset divorce attorneys at our firm want to tell you more.

Both Spouses Were High Earners During the Marriage

When both spouses were high earners during the marriage, the prospect of dividing certain types of community assets under Texas law, such as retirement benefits or stock options, may not be as daunting since both parties likely anticipate that they will continue earning a substantial paycheck and benefits after the divorce and may not actually see any of those benefits transferred directly to a spouse. Moreover, when both spouses are high earners, the matter of alimony or spousal maintenance is often much less of a concern.

When you are thinking about the financial issues and economic realities of a high asset divorce in Austin, Texas, one of the things you may be considering is whether it makes sense to stay in your marital home or to sell the property and share the profits. First, you will need to determine whether the home is likely to be classified as community property. If so, it is important to consider all factors in determining whether it makes sense to keep the property. Our Austin high asset divorce lawyers will say more about the complications of keeping a marital home after a high asset divorce.

Is the Marital Home Community Property?

Before you start to consider whether it could make sense to negotiate a property settlement in which you keep the house, you will need to know first whether the house is even likely to be classified as community property.

As you likely know, Texas is a community property state. Accordingly, under Texas law, courts divide community property (or property of the marriage) between the spouses, while usually, separate property is not divided. For many Austin couples, the marital home is considered community property or, at least, part of the value of the home is community property. While a number of Texas couples purchase a home together after they are married, there are a variety of ways that a marital home may have characteristics of both community property and separate property. For example, if a couple uses separate funds to place a down payment on the house but makes mortgage payments from community funds, commingling has occurred and the types of property will need to be traced out.

Divorce involving business owners can be particularly complicated, especially in an Austin high asset divorces. When one or both of the spouses own a business, the division of community property can become extremely complex. The following are just a few special considerations for dividing a business in a high asset divorce. If you have questions or need assistance, you should get in touch with an Austin high net worth divorce lawyer as soon as you can.

Business Appraisals Are Extremely Complicated and Should Be Done Early

Chances are good that much (if not all) of your interests in a business will be classified as community property and will be subject to distribution. Sometimes spouses own a business together, while in other scenarios only one of the spouses is involved in a business. In either circumstance, it will be essential to have a proper business appraisal done to ensure that the court knows precisely how much your business (or business interests) are worth when determining how to divide community property.

Business appraisals are extremely complex and require the skills of an experienced business appraiser. A business appraiser can complete different types of business appraisals, including those for the purposes of selling the business and those for the purposes of identifying the value of a business in a divorce. Businesses can be valued in various ways, as well. For example, a business appraiser can provide a fair market value, which can take into account all intangible assets of the business as well as tangible assets (like equipment and furniture). A fair market value provides a number that reflects what the business might sell for. You can also consider a capitalization of earnings valuation which attempts to calculate the “net present value” of the business based on “its projected future earnings.” In addition to appraising the business, you may also need a valuation of your business stock.

High asset divorces in Texas are different from other types of divorces. These divorces often involve complex property division and complicated valuations of community property. Since all community property is divisible under Texas law, it is essential that high-value assets be appraised accurately. Beyond complex property division matters, high asset divorces can also be much more complicated in terms of spousal maintenance issues, as well as matters pertaining to child support and even child custody. Given that high asset divorces are so complicated, it is easy to make mistakes if you do not work with an experienced attorney. Those mistakes can cause problems in your divorce case and can, in some situations, be irreparable.

An aggressive Texas high asset divorce lawyer at Powers and Kerr, PLLC can begin working on your case today. In the meantime, the following is a list of common mistakes you should avoid in an Austin high net worth divorce.

Failing to Work with an Expert Appraiser

In a high asset divorce, it is essential to work with an appraiser who can provide an accurate and fair valuation of your valuable property. If you fail to work with an expert appraiser, the court may value property in ways that do not take into account the unique aspects of the property, or your spouse’s valuation may be the sole evidence that the court uses to place a value on the property. You should work with your lawyer to hire an appraiser who has experience providing market and insurance valuations of the particular kinds of property that will be classified as community property in your divorce.

The 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.

Planning for a divorce is complex no matter what kind of property you own with your spouse. To be sure, even when a couple owns relatively few assets and has a limited amount of debt that will be classified as community property under Texas law, accurately identifying and valuing property can still be complicated. Yet these processes are significantly more difficult and complex in a high asset divorce. And it is not just increased complexity surrounding the division of community property that can make a high asset divorce different. In addition to the division of community property, maintenance or alimony can also have significant implications for your taxes.

Our Texas high asset divorce lawyers want to help. The following are a few key ways that a high net worth divorce is different from other divorces.

More Money Means the Stakes Are Higher

While there is no set monetary figure to define a high asset or high net worth divorce, we typically use this term to talk about divorces in which the couple has $1 million or more in assets. Austin is a city where married couples have family roots for generations while also being a place where musicians and artists have decided to live. Accordingly, there are many married couples in and around the Austin area who might qualify for a high asset divorce. When a divorce involves millions of dollars, the stakes are simply higher.