No matter the unique circumstances of your marriage and separation, the financial of any divorce can prove a tedious and complicated process. Although property division is generally easier for those with fewer assets, even those couples are at risk of running into roadblocks or receiving an unfair outcome. However, property division becomes increasingly complicated the more assets the couple holds.
Generally, couples with a high net worth will need to address a larger number of asset categories, compared to a couple of average wealth. In addition, each of these categories hold a larger, more diverse set of assets. In order for a Texas family court to fairly divide these holdings between the divorcing parties, it must adhere to special legal considerations set forth by Texas state law. High asset divorce cases are unique, and they require an attorney who understands the complexities of such situations.
Dividing Real Estate in High Asset Divorce
One of the asset categories most high asset couples will eventually face is real estate. In order to begin dividing real estate, it is necessary to first assess the market value of each property owned by the divorcing couple. It isn’t unheard of for high asset couples to possess more than one piece of real estate, potentially including both a home property and a vacation property or investment property. The more properties the couple owns, the more complex the valuation and division process may become.
In the example above, if the home property and vacation property are approximately the same value, and each party is willing to take one of these properties, the situation is relatively straightforward. Unfortunately, this simple solution often isn’t the case for many high asset couples. Rather, many couples are in possession of additional investment properties, commercial properties, or other properties used to bring in income.
In this case, the couple must work alongside their respective attorneys to determine the most practical solution. If approved by the court, one spouse may buy out the other, receive a share of the sales profits, or retain half of the valued properties. Unfortunately, lack of a simple method of dividing real estate property makes it more likely for couples to become contentious rather than amicably work out a solution. No matter the case, a skilled high asset divorce lawyer can help ensure real estate property division proceeds smoothly and fairly.
Dividing Business Properties During High Asset Divorce
When one or both partners own a business, the asset division process can become tricky. As with any other asset involved in a divorce, it is necessary for the court to determine the business’s value before it can be divided between the parties. Valuing a business is a unique task with many special considerations.
For example, most assets can be assessed in a straightforward manner by assigning a market value. However, businesses are a bit more complicated in that it is often highly difficult to determine the accurate market value of a business entity. If the business in question doesn’t have a comparable market, determining a market value only becomes more difficult. Instead, those performing the valuation can utilize alternative methods, such as the asset approach (the total value of the assets and debts held within the business) or the income approach (the revenue stream provided by the business).
Other Property Involved in High Asset Divorce
As mentioned, high asset divorces typically contain a greater number of asset categories, compared to that of the average divorcing couple. In particular, stock holdings are another property concern high asset couples are likely to face as they work through divorce proceedings. Fortunately, however, stocks are one of the most straightforward assets to divide.
Both the holding period and the cost basis of the share will remain intact after it is split between partners. The price of the stock itself will also remain the same. As a result, high asset individuals often use stocks as a valuable negotiable asset if they’re looking to recover other major assets.
Other asset categories high asset couples will need to address are:
- IRAs and retirement accounts
- Business assets
- Vehicles (including boats, RVs, and other recreational vehicles)
- Cash Assets
Of course, this is not a comprehensive list of all asset types. Your high asset divorce attorney will assist you in gathering a comprehensive list of all marital assets and personal property subject to asset division.
How Is Property Division Determined in Texas?
While there are several unique factors involved with a high asset divorce in Texas, the process does share some similarities with a typical divorce. Specifically, it is important to point out that all divorcing Texans are subject to property division according to Texas’ community property law.
Although not all US states divide property this way during divorce cases, Texas considers nearly all assets acquired during a marriage to be “community property.” In essence, that means that both spouses in the marriage hold equal ownership over all assets. The court will then attempt to split property between the partners in a way that is equitable. However, that does not mean property is always split 50/50.
More precisely, Texas divorce courts must employ the standard of “just and right” as they divide marital property. Since it is rarely possible for all assets to be split 50/50 and awarded evenly to each spouse, the court is given some discretion regarding its division of assets. Equitable distribution depends on the unique circumstances of the couple, which the court will consider in an attempt to divide community property in a way that is fair to each spouse.
The Love DuCote Law Firm: Experts in High Asset Divorce Cases
At The Love DuCote Law Firm, we are a team of highly skilled legal experts with a combined total of over forty years of experience. We have a passion for family law and have been involved in a wide array of high asset divorce cases in Sugar Land, Houston, Katy, Harris County, and Fort Bend County, Texas.
In many ways, high asset divorce is unique compared to the typical Texas divorce. Unsurprisingly, the process of property division is generally more complex during a high asset divorce, due to the sheer quantity and variety of assets that must be split between spouses. The team at The Love DuCote Law Firm understands exactly how to approach high asset divorce so that our clients can secure the assets they rightfully own.
Interested in scheduling a consultation with us? Simply fill out the form on our website to request a personalized consultation and discuss your unique details.