What Are Your Asset Division Goals?
The end of a marriage involves both opportunity — the chance to regain your independence, the ability to again chart your own destiny — and letting go; letting go not only of the past, but also of the physical objects that threaten to keep you symbolically shackled to your former spouse.
When it comes to property division, ask yourself, “What do I want?” Some individuals feel that they deserve the greater share of the marital property. For others, it would be preferable to simply cleave the marital estate in two and be done with it. The legal strategy you employ in your divorce should certainly cater to your ultimate goals in property division. But whatever those goals are, you should recognize that property division can become much more complicated than either former partner could have foreseen.
At Fabio & Merrill in Houston, our attorneys have more than 35 years of experience providing asset division services to people facing divorce, including dividing real estate, retirement accounts, inheritances, business interests and more. We are prepared to handle even the most challenging matters. Through investigation into complex financial situations and partnerships with forensic accountants, appraisers and other financial experts, we ensure that all assets are properly valued and characterized, so that you can get your fair share.
Texas Is A Community Property State
In Texas, assets that are acquired during the marriage are generally considered community property — that is, property owned by both husband and wife. These assets are subject to division between the couple in a fair and equitable manner, regardless of which spouse acquired it or in whose name the property is held.
Property acquired by one spouse before the marriage belongs solely to that spouse and is not subject to division. Income from separate property is divisible, however. There are also limited exceptions to the broad community property rule; for instance, property inherited solely by one spouse during the marriage or property received as a gift by only one spouse during the marriage is considered separate property.
So how will all that community property be divided? Under the Texas Family Code, judges are tasked with dividing marital property in a manner that is “just and right.” This does not necessarily mean 50-50.
Judges look to many relevant factors, including the age and earning capacity of each spouse, the respective contributions to and responsibility for depletion of the marital estate, and fault for the deterioration of the marriage, when applicable. Although many Texas property divisions are close to a 50-50 split, it is not unusual for judges to approve divisions of 55-45 or 60-40, nor is it unusual for the parties to agree to a non-50-50 split.
For those of high net worth, it is particularly critical to work with representation equipped to identify and value marital assets. A failure to do so can result in unfair allocations that adversely affect the financial future of each party. Not every firm possesses the skill and experience needed to handle complex estates or wealth.
The Characterization Of Assets
All property and assets held by the spouses must be characterized in one of two ways: as community property, having been acquired during the marriage, or as separate property, meeting requirements that exclude it from the division. This can become complicated when dealing with inheritance, trusts, investments and other complex accounts.
This often requires a detailed identification of each asset and possible tracing of assets to determine their use, accounting, and gains and losses over the duration of the marriage to provide the most accurate fair and equitable division possible.
The Division Of Real Estate
The value of real property, whether residential, commercial or unimproved, is determined by establishing its fair market value at the time of the marital dissolution. Valuation is most often accomplished through the comparable sales approach which looks at the price fetched by recent sales of similar property. Likewise, personal property can be valued based on its fair market price, although when a market value is not available, the price of personal property is based on its intrinsic value, which can be highly subjective.
The Division Of Retirement Benefits
Retirement accounts and investments for the future can be particularly difficult to value and divide. When dividing certain types of retirement benefits, most notably a 401(k) account or private pension plan, a document known as a Qualified Domestic Relations Order is required to guarantee the recipient spouse’s interest in the plan. For a defined contribution plan, a lump sum payment, rollover to an IRA or creation of a separate account within the plan may be an option, while the form of payments from defined benefit plans can vary based on the needs of the parties and the stipulations of the plan itself. Our attorneys are skilled in determining accurate current and future values of the accounts and providing a division that is fair and equitable, taking into consideration possible tax implications.
The Division Of Businesses
If a business, significant share in a company or a professional practice is held by the couple or one spouse, the business must be evaluated and valued to determine what is due each spouse upon divorce. Each situation is unique, requiring a thorough understanding of business valuation that could affect a fair and equitable division.
Closely held business interests that are part of the marital estate present their own challenges in property division. As with other assets, market value is the preferred valuation method — but establishing market value for a business can be difficult, and when there is no comparable market for the business in question or a second method must be employed to ensure more reliable results, an asset approach (based on the assets and liabilities of the business) or an income approach (based on the economic stream provided by the business) will be employed.
Learn more with our property division FAQ.
Find Out How We Can Help You Get Your Fair Share
To learn more about how our lawyers can help you protect your separate property and pursue a fair division of the marital estate, please call us today at 713-568-3341 or toll free at 866-761-1513. You can also email us. Our law office is centrally located in Greenway Plaza, just north of 59 inside the 610 loop.