Being able to protect or maintain your property in a Texas divorce is one of the most reasonable goals you can have for your case. To be sure, there is a significant risk that is a part of every divorce when it comes to your property. The life that you have worked so hard to build as well as the property and assets that make up a significant part of that life R in many cases eligible to be divided between you or your spouse in the divorce. If that is not something that you have a plan for then you need to seriously think about how you are going to proceed in your case and what you can do to help your family both now and in the future from a financial standpoint.
No matter your age or your specific level of wealth you always need to have a plan when going into a divorce when it comes to a division of property. It is not enough to assume that property will be divided by a family court judge in a way that coincides with your well-being or your life. Rather, it is a tremendous risk to simply assume that a family court judge will be able to take into consideration these circumstances of your life and then divide your property in a way that reflects the important circumstances of your life and those of your family. I think if you ask most people who have gone through a difficult divorce, they will agree that this is probably an unrealistic expectation to have in one that most judges simply cannot live up to despite their best efforts.
The fact is that your family court judge, no matter how hard they work or how diligent they may prepare, is not a good substitute for you and your spouse when it comes to figuring out how to divide Community property. Classifying property in your divorce as either separate property or Community property is a more complicated task than you may be giving it credit for. You are doing yourself a major disservice when you assume that your spouse and you are better served by a family court judge making decisions in these regards rather than you and your spouse.
Even if you and your spouse are not on the best of terms at this moment you should be able to set aside your differences and at least discuss the important issues of your case when it comes to property division. Nobody would tell you that the divorce should be free of any acrimony or discussion about important matters. However, it is in everyone's best interest for you to be able to set aside your differences with your spouse and two work towards a resolution to the subjects that are most important to you, your spouse, and your family. The divorce process in Texas gives you ample time to discuss these matters and reach a resolution. You may do so through informal settlement negotiation between you and your spouse or you may also do so through informal settlement negotiations with an experienced family law mediator. Talk to your attorney about your goals for preserving in maintaining the separate property as well as Community property in your divorce.
Many people do not give Community property not enough time and consideration in their cases. There are probably lots of reasons for this, but you should not count yourself among the people who failed to devote enough time to this subject. Rather, you should consider your options wouldn't dividing property and then work with your attorney to determine what goals are most important to you and your family. Community property division and classification is one of those subjects that can have far-reaching effects on your life both now and in the future.
Preservation of separate property assets
The other side of the coin on this subject is a discussion regarding separate property division. Separate property is broadly classified as any property owned by you or your spouse before your marriage or acquired by either of you during your marriage either by gift or inheritance. Depending upon your age and your number of marriages the amount of separate property that you own may be relatively large or small. You should consider these factors as you begin your divorce to make sure that you are paying enough attention to separate property in classifying property with enough diligence.
For starters, property acquired during the divorce itself between the date you filed for divorce as well as the date of your divorce being finalized is largely considered to be Community property. This means that you should not necessarily start purchasing items like crazy as soon as your divorce is filed. The income that you are using to purchase the property as well as the property itself will very likely be classified as Community property. This means that it would be divisible in the divorce itself. It also means that if you start to spend money wildly that you could be accused by your spouse of wasting community funds on unnecessary items during the divorce.
Another general rule to bear in mind for a divorce is that marital property is subject to division in the divorce. A family court judge would divide up your property in a just a right manner based on the circumstances of your case as well as the Community property laws of Texas. When it comes to Community property your age, work experience, fault in the breakup of the marriage, and other factors like this can be utilized to determine how your community as a state should be divided. Another factor that would be used by a family court judge to determine how to divide Community property would be the amount of separate property owned by you and your spouse individually.
As opposed to Community property, separate property cannot be divided in a divorce by a judge. Whichever assets you own are your separate property will be maintained by you and the same will be said of your spouse. So much energy and attention are paid to determining community assets and protecting those assets in a divorce. However, I would like to spend some time discussing how you can protect the separate property that you own and how to enhance your ability to I'm sure that there is no doubt at the separate property you own is separate in that part of the community estate.
Keep track of the value of the property from the date you got married
We have already discussed how Separate property is any property owned before your marriage to your current spouse. An interesting part of that discussion, however, is that any increase in value to a separate property asset would be classified as Community property. This is relevant to a discussion of protecting your separate property in that you will need to be able to show a family court judge the value of the particular piece of property around the date of your marriage to make sure that the pre-marital or separate aspects of the value are maintained. Hopefully, you have kept a record of property or have some sort of historical overview to rely upon when it comes to determining what the value of a piece of property was at the time you got married. Things like stocks or mutual funds have year-over-year overviews that you could fall back to. However, things like real estate may be a little bit more difficult to track the value of. In that type of circumstance, you may need to refer to appraisal district records of value for property taxes.
The general rule in this regard is that the longer your marriage has lasted the more difficult it will be to document the value of the property when you first got married. We have already mentioned how some assets are investments and are probably going to prove easier than others to display a history of their values over time. Depending on who keeps track of the investment or other item for you that may be the case that the bank or financial institution only keeps a record of documents like this for a few years at a period if you and your spouse have been married for 20 or 30 years then it can be relatively difficult to track down something like that from the beginning of your marriage thus, you would be relying upon yourself to keep documentation and have accurate records.
Once you have located the documents or other financial statements that you need you should be sure to save a copy of them in a place that you have access to. A USB disk is sort of an old-school way of doing this but a newer school method of saving these kinds of documents would be via the cloud or even by scanning them with an app from your phone. The bottom line is that you do not want to put yourself in a position where you save them on your home computer and somehow lose access to the documents because you either move or are prevented from accessing your home.
As a last resort, you may need to hire a forensic accountant or another expert to value certain assets of yours. You should share this information with your attorney at the beginning of your case. He or she can help you to prepare a strategy on how to classify, value, and ultimately protect this property. Do not neglect to do this until the end of the case. Depending upon the circumstances of your case, the work that you and your attorney put into the separate property classification of your case can also have a major impact on how your community estate is divided.
Don’t confuse anyone- keep your separate property in your name
This one sounds sort of silly but we're telling you- don't confuse the situation any more than you must. It is not certain that this alone would change the characterization of an asset from separate to community property, but it could be. A judge could interpret you're adding your spouse’s name to a separate property asset as a gift from your separate estate to the community estate. An example where you may be tempted to do this would be about real estate whose loan you are attempting to finance. In doing so you may be interested in updating the name on the deed to your home to reflect your new spouse's name. Keep in mind that if you owned that home before your marriage then that home would be characterized as your separate property. If community property funds were utilized to pay for the mortgage, then there may be a reimbursement claim that your community estate has, but the home itself would be your separate property.
The above rule also applies to investments. If you are moving money in between accounts that bear only your name then you are not changing the separate property nature of the funds. However, if you move a separate property investment from an account with your name into an account with both your and your spouse’s names then this means that it will likely be interpreted as a gift to the community state.
When it comes to items that are gifted to you by other people you should be careful to keep the documentation records that were provided along with the gift. The less you utilize those gifts to purchase household items or pay bills the better you're being able to make arguments that the particular asset is part of your separate estate. An example of this would be to ask any family member who regularly gives you money to ensure that they are very clear about how they give the money to you in terms of the name that is used. a check written should be written out specifically to you and not to you and your spouse.
Any non-monetary gifts that are made to you should also be carefully documented with the information kept track of with diligence. If you were to receive a vehicle from a family member as a gift, then you should make sure to title the vehicle in your name. It is just easier to keep your documents and order and to leave no doubt about how the property should be classified. The more diligent you can be about keeping this information straight the less work would have to be done during the divorce. Less work during a divorce can save you time but also money.
Prenuptial and postnuptial agreements
Of course, one way to render this entire discussion today moot would be to create a premarital or post-marital property agreement. These are documents that you could create with your spouse or fiancé either before your marriage or after the two of you get married. You can contract with him or her on how property matters would be determined at the time of a divorce. By doing so you can avoid having to argue these subjects with your spouse During a divorce.
You can think about these subjects Ahead of time with your spouse and work through them together with less pressure on you. The two of you can work together to create essentially whatever outcomes you would like regarding how your property is divided. You would only be limited by the amount of creativity that the two of you have as well as your willingness to work together on these subjects.
My final thoughts are on separate property in a divorce
One of the most important things to keep in mind when it comes to classifying property in a divorce is that you need to have a plan before your case to have a chance to accomplish your goals. Wanting to keep as much money as you can or give as little money away to your spouse as possible aren't great goals to have unless you can be more specific about how you were going to accomplish those goals. This means being intentional about your goal creation as well as how you are going to go about accomplishing their goals is essential.
From my perspective, being able to work with an experienced family law attorney Can be the difference between being able to accomplish your goals and not even having goals in the first place. For that reason, he should make it a goal of yours to speak with multiple attorneys both about the process of drafting a premarital or marital property agreement as well as the possibility of discussing how to position yourself before a divorce to protect the separate property that you own.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
if you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family circumstances may be impacted by the filing of a divorce or child custody case.