Divorce is a multifaceted, highly complex process. Not only are you severing your life from your partners on an emotional level, but you are also terminating a legal contract. For this reason, every divorcing couple must reach several agreements to solve a number of issues or request to have arrangements issued by a judge.
One key issue negotiated during a divorce is the division of assets. To many individuals unfamiliar with family court proceedings, asset division might sound like a procedure exclusive to wealthy couples. However, nearly everyone holds assets in some form. If you own bank accounts, real estate, a vehicle, or any other item of value, you’re the owner of assets that will need to be accounted for during your divorce.
Why Do You Need A Texas Divorce Lawyer?
Every aspect of your marital property, including your assets and debts, must be accounted for before the court can accurately determine the appropriate division of property. In addition, some spouses attempt to hide assets or minimize their value to avoid their distribution during asset division. Given the potential for dishonesty and the sheer volume of assets most couples accumulate during a marriage, the asset division process can quickly become one of the most complex parts of divorce proceedings
Due to this complexity, it is unadvisable to attempt to navigate asset division without the assistance of a Texas divorce attorney. If you lack a thorough understanding of family law and asset division, it is all too easy to inaccurately represent your assets, which may result in reprimands, penalties, or an unfair division of assets. To prevent costly mistakes and ensure you receive your due, secure the services of a skilled divorce attorney familiar with divorce proceedings in Sugar Land, Texas like the professional team at The DuCote Law Firm.
Community Property and the State of Texas
While different states have adopted different methods of classifying ownership of property, Texas utilizes community property law. Before entering the asset division process, it’s vital to have an understanding of what “community property” actually entails. Then, you can accurately anticipate what to expect regarding your own entitlements.
Any real property or finances acquired during the marriage by either party are deemed “community property.” This means that ownership of these assets is divided equally between the spouses during the marriage. As such, community property assets acquired during the course of the marriage must be divided evenly between the parties during divorce proceedings.
However, exceptions do exist to community property law. Some assets are instead recognized as separate property if they fall under any of the following categories:
- Property, finances, or debts that were acquired prior to the marriage.
- Any financial compensation that was acquired by one party as a result of a personal injury claim.
- Gifts or inheritances that were awarded to one spouse (including tangible property).
How is Community Property Divided During Texas Divorce Cases?
If community property must be divided equitably between the spouses, what does the process look like, in practice? To start, dividing property “equitably” doesn’t necessarily mean that the property will be split exactly 50/50. Rather, in Texas, community property must be split between the spouses in a way that is “just and right,” as determined by the court.
Determining what is “just and right” is highly dependent upon the judge’s interpretation of the divorcing couple’s circumstances. This only adds to the complexity of asset division in Texas, since there is a level of subjectivity to the division process. In some cases, a 50/50 split of assets might be what the court determines is just and right, but the final determination depends on the couple and their unique circumstances.
How does the court generally determine what is “just and right,” during asset division? Which aspects of the relationship or divorce are critical to the process? Before the court can decide what “just and right” division of property looks like, the judge will need to consider the following questions:
- How long was the marriage?
- What does the health of each spouse currently look like?
- What level of education do the spouses possess?
- How much separate property does each individual possess?
- What do the spouses’ earning capacities look like, compared to one another?
- Which spouse holds custody of any minor children from the marriage?
- What business opportunities currently exist for each spouse?
- What types of community property assets are being divided?
- What has each spouse contributed, individually, to raising children during the course of the marriage?
- Is either member of the couple at fault for the divorce? How so?
How Are Business Entities Divided During a Texas Divorce?
When Sugar Land asset division involves one or more business entities, divorce and asset division proceedings can become even more complex. This is the case whether the business is owned by a single spouse or both spouses. In either instance, the court must assign a value to the business entity before determining what is due to each divorcing spouse. When it comes to valuing a business, each situation is unique—valuation should be determined on a case-by-case basis.
While other marital assets are valued according to their market value, this isn’t a practical method when it comes to valuing a business. Determining the market value of a business property can be incredibly tedious, especially if the business doesn’t have a comparable market.
Instead, the courts will assign value to a business using an income approach or an asset approach. An income approach accounts for the stream of income that the business provides both parties, while the asset approach focuses on the liabilities and assets of the business property.
Achieve Fair Property Division With a Property Division Attorney in Fort Bend County, TX
Working with an experienced property division attorney is key to completing the asset division process with a fair outcome. The attorneys at The Love DuCote Law Firm LLC have built over forty years of combined experience in the various complexities of divorce, including the asset division process. If you are a resident of Sugar Land, Katy, Houston, Fort Bend County, or Harris County, Texas, you can rely on our team to secure your rights to your marital and separate property. To schedule a consultation or ask questions about your unique case, complete our online contact form today.