PROPERTY DIVISION ATTORNEY DALLAS & FRISCO TX

Texas Property Division Lawyer Serving Dallas, Frisco & Plano

Texas is a community property state. Community property means that all property accumulated by a married couple, and all income they each earned during the course of their marriage, belong equally to both of them. If you are getting divorced and anticipate dividing assets and property, you need an attorney experienced with complex estate and asset division cases.It is possible and likely that each has separate property of some sort that remains their own separate property after the divorce.

How Does Property Get Divided During A Divorce in Dallas or Frisco Texas?

Courts encourage divorcing couples to make their own decisions about how the property should be divided. When they are unable to do this, the court will analyze all relevant facts and make an ultimate property distribution order based on what “the court deems just and right.” This is why finding a lawyer for dividing property in a divorce is so important.

What Is Separate Property in A Divorce?

Separate property is owned solely by one of the parties and is not divided as community property. It remains the separate property of the spouse to whom it belongs. This includes:

Property a spouse owned prior to the marriage, which has remained separate property with no comingling with community property (or which can be shown to be separate property, despite comingling. This includes any property with, real estate being the most common.
Gifts given to only one party.
An inheritance by one spouse.
A personal injury settlement from a lawsuit belongs to the person who was injured. One exception is that portion of the settlement funds, which were identified as compensation to the injured person for lost wages, since income from work is considered community property.

How Do I Identify Community Property in Texas?

In Texas, all property is considered community property unless it is proven to be the separate property of one party or the other. Community property will usually include:

All real estate acquired during the course of the marriage no matter how the names on the title are listed. This includes real estate that may be located in another state if, at the time it was acquired, it would have been considered community property under the laws of Texas.
All property, like furniture, cars and even the family pet are community property.
Wages and other forms of compensation paid for work performed that was earned by each party during the course of the marriage.
Value of a small business or professional practice started during the marriage. This includes the commercial good will of the business or practice and often requires expert analysis to determine the value.

Proving Separate Assets In A Divorce

So how do you prove something is your separate property? With the paper, usually. Let’s take for example a bank account you had prior to the time you got married. It had $50,000.00 in it then. Since the date of your marriage, a lot has happened. You put money into that account from your earnings (community property), you’ve put money in from an inheritance, and you’ve moved money out to pay bills or invest in other ventures. Your job, or more to the point, your legal team’s job, is to trace the money you originally had and the money you inherited right up to today. We’ll do that with paper.

Bank Statements Can Help

The first item is the bank statement which shows the balance in that account on the day of the marriage. Then we’ll need to gather all of the statements for that account since then. Without them, all of that money could have been spent in one month and put back in from community sources. The inherited money will need more paperwork; not just the bank statements, but also something showing where the check from the inheritance came from – a cancelled check from the estate, a will, or something else which would show a Judge, clearly and convincingly, that the money was inherited.

Most accounts are used, which means money goes in and money comes out. When you put money into that account which has your separate property already in it, the money becomes comingled. That doesn’t mean it’s hopelessly intertwined with your separate property money, but the more complex the tracing, the more likely a Court will be to find that part or all of your separate estate belongs to the community. The more assets are moved from bank to bank or item to item, the more complicated the tracing gets. If you have the paperwork to support the separate property claim, your experts will have a better chance of preserving your separate property assets. Too many times the necessary documents seem to disappear after a divorce starts, so to the highest degree possible, gather those documents before you start the divorce.

Facing a contested divorce with complex asset and property division? Call our divorce lawyers today to schedule a consultation. Jeff Anderson is board certified in family law by the Texas Board of Legal Specialization and has earned various awards throughout his career.

How Are Retirement Plans and Benefits Split During A Divorce?

Texas law requires the Court to determine the rights of each party in all pension or retirement plans or any other employee benefit plan. An experienced family law attorney will prepare the required documents in order for the plan administrators or employers to properly disperse the funds according to how the Court orders them to be distributed.

How Is Community Property is Distributed?

If the parties put together their own Marital Settlement Agreement dividing their community property, the Agreement must be presented to the Court for approval. If the Court finds the Agreement is “just and right,” it will incorporate it as part of it final order.

Property division that is “just and right”, as the law requires, means a fair and equitable distribution. With this in mind, the court considers can consider virtually any relevant factor. Some of the most common ones are:

The length of the marriage.
The role of the parties during the marriage. For instance, whether one was employed or pursued a career while the other stayed home to care for children.
The education, earning ability and employability of both parties.
Each party’s health.
Each party’s age.
Whether either party engaged in any fraud by trying to conceal assets.
Whether one party was at fault in the break-up of the marriage.
Which spouse has custody of the children.
Tax consequences to either party depending on how the distribution is ordered.

In making the “just and right” distribution order, the Court has wide discretion. For example, the Judge may order that property, such as the family home or other real estate, be sold and the proceeds divided. Another option may be for one party to buy out the interest of the other party. One party may keep the house and the other one receive the money that is in a savings account. The division does not have to be 50/50. Those factors listed above could lead the court to make a distribution that is not equal as long as it has good reasons to justify its order.

If I’m in the Process of Divorcing My Spouse, Is My Current Income Separate Property?

Many divorcing spouses want to know if they’ll be able to retain all of the money they’ve earned after the divorce has been filed but before it’s finalized. In short, Texas law says that community property (or, in other words, property of the marriage) is categorized as such until a divorce decree is entered. To be sure, up until the very date that the divorce is finalized, any money you earn or property you acquire likely will be considered community property.

Will the Judge Divide Property in Half During A Divorce?

When spouses decide to divorce, many are under the assumption that the community property rules in Texas require a judge to divide property 50/50 between the spouses. While Texas is not an “equitable distribution” state (in which a judge will divide property based on what’s fair to each of the spouses), a Texas judge still has discretion when it comes to property division. Under Section 7.001 of the Texas Family Code, the court is supposed to order a division of the estate “in a manner that the court deems just and right.”

In other words, the court will take into account a number of different factors when dividing marital property—some of which can affect the quantity of distribution—including but not limited to:

• Difference in the spouses’ earning ability;
• Who has been granted conservatorship of the child; and
• Fault in the breakup of the marriage.

Income Partitions Can Make You Pay With Your Property

In Texas, partitioning income transforms income from community property to separate property owned by the husband or wife. Without a partition, income is presumed to belong jointly to both spouses, regardless of who earned it.

Upon divorce, non-partitioned income is considered community property and subject to fair division. However, the Texas constitution and state statutes give spouses the option of partitioning their respective incomes. If the couple divorces, the money each spouse has earned – and generally any purchases he or she made with that money – will be awarded to the spouse who earned it.

It’s not difficult to partition income in Texas. All that’s required is a written, signed agreement. But because marital agreements are often bitterly contested during divorce, it’s wise to have a qualified attorney represent you in the income partition process.

Secrets of Negotiating Property Division in Texas

Negotiating the division of property in divorce is an art form all its own. It’s a three-step process: characterize the asset, value it, divide it. In Texas, Courts divide up the community estate in a just and right manner (a fair manner). That doesn’t necessarily mean 50/50.

Characterizing the Asset

Characterizing the asset means identifying whether it is community property, separate property, or a mixture of the two. Once the community estate is identified, you know what is to be divided. But that’s just the first step. Valuing it is just as important. For instance, a bank account with cash in it is pretty easy to value – look at the balance. But a retirement account, a house, or securities can have more complex issues.

Inaccurate Retirement Savings Totals

The purpose of most retirement accounts, like 401K’s or IRA’s, is to defer the tax on them. That means the tax will have to be paid at some point. As you are negotiating your estate, keep in mind that your retirement accounts are not worth the statement balance. In fact, they may be worth even less than the balance minus the tax. If one of the parties will be liquidating a retirement account early, then the highest marginal tax rate and the early withdrawal penalty might need to be subtracted from the value of the account.

That can mean a reduction of nearly 50% in some cases. Even if the account is not going to be liquidated, the taxes which will be paid on the money at the time of retirement can be considered and a reduction of the overall value of the asset might, and very often is, appropriate.

Dividing Real Estate

Real estate can be valued using market comparisons, an appraisal, or in some cases even a tax value (though tax values are often inaccurate). If the party receiving the house does not intend to sell it, Courts will often give the entire value of the house to that party (less mortgage). But if the house is to be sold in the near future, the costs of sale might need to be considered. For most houses 7.5-8% can be taken off of the value to compensate for realtor fees and closing costs.

Dividing Stocks and Bonds

When stock in a corporation is bought, it has a basis – the money spent to purchase the securities. If the price of the stock has risen since it’s purchase, the increase in value is taxable. Many people will buy shares of stock at different times, which means they may own the many shares of the same stock, but different shares have different basis’ and, therefore, different tax implications. The stock with the highest bases is the most valuable, since there is less gain on the stock and, therefore, fewer tax consequences. So be wary of cherry picking – choosing the stocks which, on their face, seem to have equal value, but in reality, have a lower tax liability associated with them.

The tax and liquidation costs of assets can easily be overlooked if you’re not paying attention. If you’re going to divide the community estate on an “apples to apples” approach, the liquidation implications should be factored in.

Dividing Art Collections During Divorce

While art collecting isn’t a hobby practiced in all homes, marriage dissolution can result in heated property disputes, particularly over highly valued collections. According to a recent article in the Wall Street Journal, attempts to divvy up art can lead to brutal arguments over property division. Indeed,

“of all the fights that can erupt during divorce proceedings . . . some of the biggest take place over artwork.”

One attorney with experience dividing high dollar estates said she’d place property division and artwork in the “same category as child-custody battles,” emphasizing the emotional attachments that divorcing spouses often have to these pieces. Couples tend to be so attached to their collections, in fact, that their emotional considerations can outweigh financial ones. In many divorce cases where spouses have large art collections including expensive paintings and sculptures, it will take a lot longer to decide who gets the art than to decide who gets real estate, automobiles, and stocks.

How can you make sure that paintings, sculptures, and other works of art to which you’re emotionally attached can be divided equitably and without too much distress on either side? The Wall Street Journal makes some recommendations for ensuring that your invaluable assets:

Make an inventory of your art: when you know you’re about to go through a divorce, it’s important to make a truthful and detailed list of your art. You’ll want to specify which pieces were acquired before the marriage and which pieces were purchased during the marriage. If you’ve sold any art during the marriage, you should add it to the list and indicate the price of sale. In most cases, art that you purchased before your marriage won’t be considered marital property. Even if you purchased a painting before your marriage that arrived at your home after you were married, it typically will be listed as nonmarital property. However, in some cases, art purchased when you were single but sold during your marriage may be considered marital property.

Hire an appraiser for your collection: it’s important to know how much your artwork is worth. Whether you want to hire your own appraiser or agree on an appraiser with your spouse. Keep in mind that the situation can get complicated when appraisers have widely varying numbers—a situation that often arises when it comes to paintings and sculptures.

It’s important to keep in mind that you cannot hide any property when you’re going through a divorce. If you fail to disclose certain assets, you could face serious repercussions.

Art as Community Property in Texas

In Texas, you should remember that property division will leave you and your spouse with equal portions of your assets (and debts). Texas is a community property state, which means that all the assets you’ve acquired during your marriage will be split evenly. However, community property rules don’t apply to nonmarital assets, which are generally those you obtained before your marriage. However, property division can be extremely complicated, and it’s important to have experienced legal counsel on your side.

If you’re in the process of divorce and have questions about property division or other family law matters, contact us so our attorneys can assist you.

Help with Complex Property Division

If you need a divorce that requires a complex property division, call Jeff Anderson today to schedule a consultation at (972) 248-8383.

Schedule A Consultation With Award Winning Attorney Jeff Anderson

Contact property division lawyer Jeff Anderson today. He has the legal experience and talent to guide you through the property division process and make sure your division is fair and equitable.

Property Division