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How to Handle a High Net Worth Divorce in Texas

Facing a high net worth divorce in Texas can be a complex and emotionally charged experience. This guide provides key insights and strategies for navigating the unique challenges and legal considerations of high-asset separations in the Lone Star State.

High Net Worth Divorce in Texas: An Overview

Divorce is a complicated and difficult process no matter what kind of case yours is. Many people have somewhat “typical” divorces that involve a husband and wife who each work and earn an income that is considered middle class. Maybe there is some retirement savings to consider but for the most part there are not a lot of moving pieces to be overly concerned with.

On the other hand, you may be considering a divorce from your spouse where your case will be much different from the one described in the previous paragraph. If you and your spouse earn a high income and have accumulated significant amounts of property and assets it is not a good assumption to make that what works for most divorcing spouses in terms of property division will work for you in your divorce.

Leaving a division of assets to the judge in your case is a risk because the standard that courts use “a just and right division” may turn out to be anything but for your particular situation. The Law Office of Bryan Fagan, PLLC would like to walk you through some of the more pertinent issues in high net worth divorces in this blog post.

Potential Issues in High Net Worth Divorces

As we’ve already touched on, high net worth divorces are different than other divorce cases. One issue that I have seen occur much more frequently in high net worth divorces than in other sorts of divorce cases is that one party or the other will attempt to conceal assets in hopes that their spouse will not be able to discover them.

In Texas, a community property state, any asset originating during your marriage is subject to division between you and your spouse in a high net worth divorce. This situation incentivizes your spouse to either hide assets to prevent division or mischaracterize assets as their separate property. Separate property belongs only to your spouse and is not divisible with the community estate, preventing you from receiving a share of that asset.

Forward Thinking and Advanced Planning Can Offer Advantages to Litigants

If the above scenarios concern you then it is essential that you plan with your family law attorney early and often for outcomes inside and outside of the courtroom. The most critical analysis that you and your attorney can do is to help determine if an asset is part of the community estate or is your separate property.

Your attorney can help you “trace” the funds that were used to pay for an asset, as in where the source of the purchasing funds came from in order to determine if an item is truly community or separate.

In addition, your lawyer will provide you with a more objective opinion as to whether or not something actually is your separate property. I have seen clients vehemently argue their position as to why one asset or another is actually their separate property.

Sometimes, your emotions as a party to the high net worth divorce will not allow you to see a situation objectively as a judge would. Your attorney’s advice and counsel on this sort of subject is essential.

Concerns for Business Owners

First, determine whether part or all of your or your spouse’s business qualifies as community property. If it does, assess the business’s value accurately to align settlement offers with the actual situation. Consider sharing the costs of business appraisal with your spouse for equitable expense distribution. Once you have a valuation, negotiate with your spouse to divide the business.

Decide whether to keep the business for income. If you choose this, prepare to compensate your spouse for their share of the business’s equity or offer a similarly valued asset from the community estate.

If neither of you want any future part of the business (other than the value of it) then finding a suitable buyer for the company is important to allowing your divorce to proceed without needless delays.

Retirement and Investment Asset Protection

If you or your spouse have been saving substantial amounts of money for retirement then those retirement accounts are likely to be part of the community estate. In many cases, savings are in Individual Retirement Accounts (IRAs) or 401(K)s through one of your employment places. If so, you can’t just divide the money in half in your Final Decree of Divorce.

Instead, you must draft a Qualified Domestic Relations Order (QDRO) with your Decree of Divorce. The judge signs this, instructing your retirement plan’s administrator to execute the agreed divorce terms. When dealing with hundreds of thousands (or more) of dollars, having an eye for detail and negotiation experience is crucial.

High Asset divorce attorneys for Southeast Texas: The Law Office of Bryan Fagan, PLLC

How to Handle a High Net Worth Divorce in Texas

If you are considering filing for divorce and have found that the factors above apply to you then you will need an experienced divorce attorney in the field of high net worth divorces. The attorneys with the Law Office of Bryan Fagan, PLLC work to ensure that our clients with high incomes and complex estates are handled with respect and care. To learn more about our office and the services we provide clients please do not hesitate to contact us for a free of charge consultation.

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Contact Law Office of Bryan Fagan, PLLC Today!

At the Law Office of Bryan Fagan, PLLC, the firm wants to get to know your case before they commit to work with you. They offer all potential clients a no-obligation, free consultation where you can discuss your case under the client-attorney privilege. This means that everything you say will be kept private and the firm will respectfully advise you at no charge. You can learn more about Texas divorce law and get a good idea of how you want to proceed with your case.

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