Figuring out how your property is likely to be divided in a Texas divorce is one of the most important questions that you can answer. The trouble is that the answers you need are not always easy to find. For one, you have a specific set of circumstances that are not the same as anyone else’s. So, you can talk to your friend about her divorce but how property was divided in her case will be different than how it was divided in your case. Your finances are different from hers and the property that you own is different as well. It is a good idea to talk to people that you trust about their experiences with a divorce, but it would not be wise to rely solely on their experience in divorce since it is likely to be different than your own.
One of the interesting parts about property settlement in a divorce case is that there are so many different options as far as how the process can proceed. Imagine a situation where all the property that you own- your home, land, vehicles, money, bank accounts, retirement accounts, investments, college savings for kids, personal property, and everything else- is represented by poker chips that are located in the middle of your kitchen table. You and your spouse are located on either end of that table with the chips in the middle. What happens in a divorce is you and your spouse are going to figure out how to slide those chips toward either one of you in a way that you believe is fair. If you can’t decide how to do that then a judge will decide it for you.
There are an endless number of ways for property to be divided in a divorce. A just and right settlement is how a judge will approach the division of your property. Considering your current circumstances and where you and your spouse are likely to be after your divorce is how he or she would divide up your property. The popular belief about property division in a Texas divorce is that it always comes down to about a 50/50 split. Right down the middle with you getting half and your spouse getting half. However, what you need to consider is whether this is the reality in divorce cases and where that belief comes from if it is not.
Community property in Texas divorces
The reason why so many people believe that spouses are destined to get half of their property in a divorce is likely due to Texas being a community property state. Being a community property state means that Texas does not consider property acquired or purchased during your marriage to be “hers” or “his.” Rather, your property is treated as “ours” for a divorce. It does not matter whose income was used to purchase the property. It does not matter who earns more money. As long as the property was purchased with community income earned from your jobs during your marriage then that property is community property. Community property is divisible in your divorce.
There is such a thing as separate property, as well. Separate property is any property owned by you or your spouse before your marriage or acquired by gift or inheritance during your marriage. Depending upon your age and the length of your current marriage you may own very little separate property or a great deal of separate property. Many people who are on their second or third marriage or find themselves getting married for the first time later in life are especially susceptible to having a lot of separate property when they get divorced.
What this basic amount of information should tell you is that you need to be able to distinguish between community property and separate property for your divorce. This is usually done by performing an inventory of your property early in your divorce- or even before your divorce begins. For example, you can go around your home with your cell phone camera and take photos of your closets, dresser drawers, safes, and everywhere else in your home where property may be kept. This means being vigilant and detail-oriented. Do not leave any stones unturned when it comes to looking for physical property in your home that you need to keep track of.
Next, you can look through investments, bank accounts, and your retirement savings to determine how much property you own in those areas. You won’t necessarily need to take photos of these types of properties, but it would be wise to save statements showing the value of each account at the beginning of your divorce. Especially with bank accounts, it is wise to monitor these accounts throughout the divorce to determine whether money is being spent in these areas when it should not be. You have probably heard of spouses draining bank accounts in divorce cases. That may not be likely in your situation, but it is always a good idea to have close tabs on your checking and savings accounts so that problems do not arise with overspending. Your household budget is going to change during your divorce so you should bear that in mind and pay attention to your checking and savings accounts during this time.
Another part of the equation that you will need to get in line with is what estate each item of property belongs in the community, your separate or your spouse’s separate estate. This can be easier said than done to figure out. If you own relatively little property, then this may be a somewhat easier question to answer. You can look to the purchase date of the property to figure out, for the most part, what estate each item of property belongs in. However, for more complicated situations you may need to take some time to think about it on a more in-depth basis. For example, if you have a 401K that predates your marriage it is going to take some work to figure out how much of that account is community property and how much is separate property.
Once you have inventoried your property and then classified it you should then work out its approximate value. Nobody is expecting you to hit the nail right on the head but the closer you can get the more accurately you can begin to plan out settlement options for you and your spouse. This is where the rubber this the road when it comes to property settlement and negotiations. Your spouse will see how intentional you are being with negotiations on the property. The more in-depth, detailed and precise you are with your settlement offers the more likely he or she is to take you seriously. Put yourself in their shoes- if you come up to your spouse with a settlement offer that is not well thought out and based on ideas that aren’t reality then would you expect him or her to accept your offer? Not likely. Instead, plan out what direction you want to do in so there are no issues with this when you get into your divorce.
Do the work and do it well
All of this is well and good as far as planning out a divorce property division settlement is concerned. You can take this information and begin to figure out how you want to approach the subject of division of property. This is not a simple question even for those of you who have relatively simple or small estates. Rather, you are going to need to answer questions about what your current financial circumstances are, what they will likely be in the future, and what your needs are going to look like as you shift into single adulthood. Whatever planning you want to do should be done as much as you can before the divorce begins, if possible.
I say this because the more work you can do yourself in a divorce the more money you can save by not having to receive help from your attorney’s office. If you’ll notice, all the information we’ve provided you with so far in today’s blog post has nothing to do with legal matters. Rather, this is all housekeeping and organizational issues that you can do on your own with some effort. Once your divorce gets going it is going to get tougher to do all these things because your schedule is going to compress and become busier. Therefore, the more prepared you can be in your case the better off you will be as far as the preparation aspects of your case are concerned. Why wait for an attorney’s help when you can do it on your own? Save money and save time by thinking ahead and being attentive.
What are your goals? What are your needs?
When a new client at the Law Office of Bryan Fagan speaks to me about their upcoming divorce, I will ask him or her to tell me their goals. I can look at a case and tell you what goals I would have for you, but those goals don’t matter. What matters is how you view your life and your case. What goals do you have for yourself because of that assessment? Have you given it a great deal of thought? This is what I would ask you to start thinking about. What do you want to get out of this divorce? Start here and move on from that starting point.
You need to assess your situation critically and then make goals that are designed to allow you to have the best transition possible out of the divorce and into your new life as a single adult. Do you want to jump-start your retirement savings? If so, then you need to focus on your retirement or negotiate for a piece of your spouse’s retirement. What about getting a much-needed cash infusion after the divorce to pay debts and save up an emergency fund? In that case, you may forego negotiating as hard as retirement savings and instead focus your attention on cash and other assets that can be sold to position yourself as well as you can regarding your near-term financial future.
Another factor that you need to think about is your work and professional life. If you are the spouse who has a good-paying job and has been the primary breadwinner in your family over many years this is less of a concern for you than it is for your spouse who has not worked in many years. It is a significant disadvantage to not have as much of a work history as your spouse after your divorce. Even if you anticipate receiving spousal maintenance after the divorce those awards are not permanent. Eventually, you will need to find work for yourself that can help you pay your bills. Being able to hone your job skills, dust off your resume or even learn a new set of job skills after your divorce comes to an end is a wise decision if you are asking us.
The family home
Likely the largest asset that you or your spouse own, the family house is frequently a subject of great debate within divorce cases. On the one hand, it is typical to want to keep the house for stability purposes. Divorce cases are notoriously difficult to manage on an emotional level. There are some low days as you begin to prepare for a divorce, just as a head’s up. Sometimes it can feel like you cannot get ahead in your case and that you have nowhere to turn to as far as help is concerned. All in all, divorce is something better left undone unless you can help it.
It is with that backdrop that you may want to approach your home with an open mind. It is tempting to want to remain in the family house after your divorce. After a period of instability like a divorce, many people look at the family home as a port in the storm where you can lick your wounds and get back on your feet. However understandable this mindset may be it can also lead you down the path to financial struggles. Here is why that may be the case for you and what you need to look out for in your situation.
The mortgage on your home is likely based on the combined incomes of you and your spouse. That mortgage is going to be due no matter the outcome of your divorce. The mortgage company, lender, bank, or whoever handles your mortgage is going to want payment no matter what the circumstances of your life are. As a result, your losing a spouse’s income means that you are less able to afford the mortgage than you were before. This could be much less able to afford the mortgage if your spouse earns most of your household income. On the other hand, it could be that if your income is much higher than your spouse’s then you may yet be able to pay the mortgage.
In any event, you need to run a household budget for yourself to determine whether you will be able to afford that mortgage after the divorce is all said and done. If you find that you can afford the mortgage, then you have options when it comes to negotiating your case and attempting to determine what the best course of action is for you and your property division prospects. On the other hand, you may also be in a position where it is for the best for you to offer for your spouse to remain in the home or to sell the house if neither of you can afford the payment on your own.
Selling the house carries with it the possibility of having less responsibility after the divorce and being able to start over anew. You and your spouse can get the house ready to sell and then split the equity in whatever fashion you believe is most equitable. Whatever you both decide to do make sure that you do intentionally. Do not wander into a divorce negotiation on the sale of your home and expect to be able to accomplish your goals. Rather, you should work to develop a plan with your attorney that is acceptable to you based on your current and future financial prospects. The last thing you want to do is to bite off more than you can chew when it comes to your home.
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