In the following blog, we will continue to address one of the questions consistently asked during divorce: who gets what? Often, connecting with a financial expert to assist in determining the appropriate division of debts and assets is the most prudent course of action as the process of answering this question has the potential to be complex.
As discussed in Part 1, before property is divided in Texas, it should first be classified as either community property (owned jointly), separate property (owned by one spouse exclusively), or mixed property (a mix of both). We discussed community property in Part 2; here, we will discuss separate property.
Part 3: Separate property is any property not subject to divisibility upon divorce. Instead, it is attributed 100% “separately” to one party or the other and is generally not considered when determining the 50/50 marital community estate split between the parties. A general presumption in Texas litigation and community property states is that all property is considered to be community unless proven otherwise, which means the burden to prove a claim for separate property, through clear and convincing evidence, rests on the party seeking the claim. Separate property is any property acquired before the marriage or by gift or devise during the marriage. For instance, if Wife owned a house before she and Husband were married, the house would be her separate property in the event of divorce and would not be a divisible part of the community estate. Similarly, if Husband was personally gifted property or left property by means of a will during the marriage, this would be his separate property. With some assets, such as real estate, characterizing separate property can be as straight-forward as looking at when title to the property originated; if it was before the marriage, then it is separate property. However, with other assets, such as cash, it can be a more involved process. A particular bank account could have been opened prior to marriage, but if the funds within the account have not been kept
separate, meaning if community funds have been earned within the account or have been transferred or deposited into the account, then the account is now most likely a mixed property account and should be analyzed by a financial expert to determine what portion is community property and what portion is separate.
Determining property character and the appropriate division of debts and assets for divorce can be straight-forward or complex depending on the property held within your marriage.
Particularly for couples with a notable accumulation of assets, an extensive marriage, or if either spouse has separate property, working with a financial expert to assist in determining ‘who gets what’ is the best course of action. Our financial experts are aware of the financial and emotional difficulties of divorce and will offer experienced and compassionate guidance.
If you are interested in a consultation or retaining us as your financial expert, or if you have more questions, give us a call at (469) 467-4660 or mention our name, Ahuja & Clark, to your family law attorney, and they can reach out to us directly on your behalf.