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TX divorce lawyerGoing through a divorce tends to be a tumultuous and stressful time in a family’s life, so it is not uncommon for couples who are going through this life change to focus primarily on the emotional aspects of the dissolution. This instinct is to be expected, and in many ways, is even encouraged as a means of helping children and relatives transition to post-divorce life. However, it is also important for the parties involved to focus on the significant legal implications of dissolving a marriage. For instance, whether or not a divorcing couple has children, they will need to divide their marital property equitably and may also need to grapple with whether one spouse will be required to pay alimony. Ensuring that these determinations are fair to all parties requires effort from both spouses, which includes the compiling and organizing of important financial documentation. This can be an arduous process, especially for couples with significant or unique assets, so if you and your spouse are planning on filing for divorce, you should contact an experienced high asset divorce attorney who can help you get your documentation in order.

Gathering Financial Information

Being prepared with necessary financial documentation and paperwork can go a long way towards ensuring that any property settlement agreement proposed in negotiations or by a court is fair and equitable. The exact documentation that divorcing parties will be asked to produce depends in large part on their specific circumstances. For instance, couples with children may need to provide different paperwork than would a couple who has significant assets and no children. However, there are certain documents that almost every divorcing couple will be asked to produce, including:

  • Income tax returns, often going back as far as five years;
  • Employment information, such as pay stubs and W-2s;
  • Bank statements;
  • Loan documentation;
  • Pension plan documents;
  • Investment and retirement account statements; and
  • Credit card statements.

Divorcing couples may also be asked to produce documentation related to any wills or trusts that they previously created. Documents detailing all of a couple’s assets will be necessary, including appraisals and financial affidavits, as will documentation related to expenses. If, for instance, a couple uses a daycare service, they would need to provide evidence of receipts or invoices that demonstrate the cost of those services.

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TX divorce lawyerWhile many divorcing couples go into the divorce process with the expectation that they may disagree on certain issues, such as who will retain the family home, many fail to remember that they will also need to determine how any retirement assets like 401(k) accounts will be divided. However, it’s important to take these types of unique assets into account when distributing assets, as they can play a crucial role in helping individuals become financially secure after their marriages are dissolved. For help understanding the complexities of dividing retirement accounts during your own divorce, please contact one of our dedicated Round Rock high asset divorce attorneys today.

Does the Account Qualify as Community Property?

How a 401(k) account is divided upon a couple’s divorce depends in large part on whether the funds in the account are characterized as community property or separate property. In most cases, 401(k) plans do not simply fall into one category or the other, as it is common for 401(k) plans to contain both types of property. This is because even if a 401(k) plan was started by one of the parties before a marriage took place, which would technically make it separate property, the interest in the plan that accrued during the course of the marriage will still qualify as community property, making it equitably divisible under Texas law.

Dividing the Account

Spouses who believe that they have a claim to the interest on a retirement plan will need to determine the amount of their share, which will be equal to the value of the plan at the time of the marriage (when it was considered separate property) minus the value of the plan at the time of divorce.

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TX divorce lawyerIt’s usually a good idea for those who are going through a divorce, especially couples with unique or valuable assets, to sit down and make a list of all unusual assets that might otherwise get left off a list of marital property. To ensure that all of your own property is accounted for and that any property settlement agreements that are presented to you and your spouse are fair to both parties, please contact a member of our Leander high asset divorce legal team today.

Unusual Assets

A couple’s marital assets usually consist of any property that was earned or brought into the home during the marriage itself. In fact, some separate property, which is made up of assets that were brought into a marriage, can become marital assets if they are commingled with marital property. While most couples remember to account for the family home, vehicles, real estate, and bank accounts when creating a list of their marital assets, it is not uncommon for a family to forget to list and value more unusual assets, such as:

  • Animals, including not only the family pet, but also livestock;
  • Memberships to gyms, golf courses, and country clubs;
  • Benefits from previous employers, such as pensions and retirement accounts;
  • Pre-paid cemetery plots;
  • Capital loss carryovers for prior tax returns;
  • Life insurance plans;
  • Interest acquired from loans made to relatives or friends;
  • Digital assets, including not only websites and blogs, but also cyber currency, such as Bitcoin;
  • Trademarks and patents;
  • Airline reward points, such as frequent flyer miles;
  • Credit card reward points;
  • Royalties;
  • Timeshare interests; and
  • The contents of a safe deposit box.

Even valuable assets in the family home can be overlooked during divorce, including:

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TX divorce lawyerMost married couples share financial advisors. However, once a couple decides to get divorced, it is usually a good idea for each party to hire a new financial advisor, accountant, and tax advisor, who can ensure that his or her interests are protected. This is especially important in cases where one spouse had the majority of contact with the family’s financial advisors during the course of the marriage. Hiring a new financial team can give divorcing parties peace of mind that their advisors have no shared or conflicting loyalties and will treat them in a fair and impartial manner. If you and your spouse are thinking about filing for divorce and you are in need of recommendations for a financial team of your own, please contact our dedicated high asset divorce legal team today for assistance.

Financial Teams

Financial teams hired to assist with high asset divorces are usually made up of a number of individuals, including:

  • Business valuation experts;
  • Certified divorce financial analyst;
  • Certified public accountants;
  • Certified financial planners;
  • Commercial property appraisers;
  • Personal property appraisers; and
  • Residential property appraisers.

All of these individuals play an important role in valuing property. For instance, certified public accountants can help explain the tax implications of retaining certain assets, while a forensic accountant can help ensure that one spouse isn’t hiding assets or attempting to commit fraud by identifying and valuing marital property.

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TX divorce lawyerIt is not uncommon during a divorce for the parties involved to get so caught up in the emotional aspects of dissolving their marriage that they fail to focus on coming up with a property settlement that serves the best interests of both spouses. This can end up costing both parties a significant amount of time and funds, while also making it much more difficult to prepare for post-divorce life. In fact, divorcing spouses may not even realize the full value of the marital assets that they are surrendering to the other without any attempt at negotiation. This is especially likely in situations where one or both spouses own unique assets, such as collectibles that are hard to put a price on, but could be extremely valuable. For help ensuring that this doesn’t happen to you, please contact a member of our dedicated high asset divorce legal team for assistance.

Valuable Collectibles

Although when many people think about valuable collectibles, they imagine antiques or coin collections, the reality is that there are a number of different kinds of valuable assets that a person can collect that fall under this category, including wine, jewelry, and art. In other cases, a person’s collections may only be of interest to a certain group of collectors. However, that doesn’t mean that these types of items don’t have value. In fact, odd items, such as antique medical devices can bring in large sums on auction websites, where collectors from all over the world can search for particular rare collectibles.

Marital Assets

Collectibles, like any other type of asset, is considered community property when it is obtained during the course of a marriage, and as a result, will be subject to the state’s marital property distribution laws. Many find it difficult to part with collectibles purchased or received during marriage, so it is often in these individuals best interest to use these items as leverage in a trade-off for another asset that the other spouse would rather receive.

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TX divorce lawyerWhile most people assume that one of the most difficult aspects of divorce is coming up with a child custody arrangement that meets the needs of all parties or learning to co-parent with one’s former spouse, the reality is that dividing marital property is actually one of the most time-consuming aspects of any divorce. This is especially true for high asset divorces, where couples have significant, diverse, or unique assets that are difficult to inventory, appraise, and divide. Furthermore, while not all divorcing couples have children, most will have at least some assets that need to be divided before a divorce can be finalized. For this reason, it is critical for those who are considering divorce, to contact an experienced high asset divorce attorney who can explain the property division process and ensure that their rights and interests are protected.

What Is Equitable Division?

Texas is a community property state, which means that all of a couple’s marital, or community property, must be divided equitably upon divorce. While in many cases, this could take the form of an equal division, it could also result in one spouse receiving more assets than the other, especially if one of the spouses is receiving alimony. Assets that often fall under the category of marital property include:

  • The family home;
  • Real estate;
  • Vacation properties;
  • Retirement plans and benefits;
  • Vehicles;
  • Jewelry;
  • Antiques;
  • Artwork;
  • Personal possessions;
  • Bank accounts; and
  • Investments.

While dividing a couple’s bank accounts equally between two parties may be a relatively simple feat, dividing other assets, such as vehicles and personal belongings is much more difficult. When it comes to selling the family home, for instance, couples are usually required to engage in a complex process that involves:

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TX divorce lawyerDissolving a marriage can be a contentious process, especially for couples with acrimonious relationships. Fortunately, there are ways to avoid the long drawn-out process that litigating a divorce can turn out to be. For instance, more and more couples have begun turning to collaborative divorce as a viable option when dissolving a marriage. To find out more about collaborative divorce and whether it is right for you and your family, please contact a member of our high asset divorce legal team for advice.

Confidential Proceedings

Collaborative divorce is an alternative to standard divorce proceedings that involves not only attorneys, but also financial planners and family therapists, all of whom are focused on negotiating a settlement agreement between the parties that serve the best interests of both spouses. In addition to giving the parties more of a say in creating their own settlement agreements, collaborative divorce also allows couples with significant assets to divide their property as they see fit in a confidential setting. Most divorces that are litigated in court are a matter of public record, which can create difficulties for business owners and others with significant financial assets or holdings in their communities. Collaborative divorce gives the parties the option of keeping all of this information private and confidential.

Assistance from Professionals

Collaborative divorces can also help avoids the creation of an adversarial setting, but instead, require the parties to focus on each other’s interests and goals. This process is helped along by the input of mental health professionals who can help the parties better communicate with each other. For instance, when a couple has children, therapists play a key role in coming up with a detailed parenting plan, but also in teaching co-parenting skills.

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TX divorce lawyerEnding a marriage requires couples to grapple with a host of difficult issues. For instance, divorcing couples must make the transition from married life to single life and come to terms with the emotional implications of ending a marriage. However, these are not the only considerations that come into play during divorce. This is especially true for couples who have unique, diverse, or significant assets, as these individuals are forced to not only physically separate but to financially separate as well. This can be a difficult process for spouses who have accumulated substantial wealth during their union, making it particularly important for those who find themselves in this type of circumstance, to retain an experienced high asset divorce attorney who can help protect their financial interests.

Obtaining Assistance from Finance Experts

Coming up with a fair property settlement during the divorce process requires a thorough understanding of marital money management, as ignorance about the existence of or value of certain assets and liabilities is a serious disadvantage. In many cases, spouses who don’t feel confident in their knowledge of their financial situations are encouraged to hire one or more financial professionals who can delve into their family’s economic complexities. Forensic accountants, in particular, can play a critical role in uncovering hidden income, as well as:

  • Determining whose accounts are being used to pay for which expenses;
  • Determining what types of insurance policies a couple had, who is listed as a beneficiary, and the source of payments; and
  • Creating a thorough list of each party’s debts and assets.

Valuation experts can also help ensure that all of a couple’s assets are labeled with their fair market value, while tax advisors can help divorcing individuals avoid unnecessary tax burdens. Finally, certified accountants can help trace the origin of a piece of property, which is crucial to the process of determining whether an asset qualifies as community or separate property.

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