Understanding a High-Asset Divorce in Texas?
Going through a divorce can be an emotionally and financially challenging time for anyone. However, when substantial marital assets are involved, the stakes become even higher. In Texas, any divorce with over $1 million in marital property is considered a high-asset divorce.
Navigating a high-asset divorce in Texas requires strategic preparation and knowledge of state laws regarding property division. This guide covers key steps to take when facing a high-value marital estate split in the Lone Star State.
If you are experiencing a divorce and need legal support, don’t hesitate to contact our family law attorneys at Bastine Law Group at 281-784-3222.
What Constitutes a High-Asset Divorce in Texas?
In Texas, marital property refers to any assets or debts acquired during the marriage by either spouse (Texas Family Code, Sec. 3.002). This includes:
Income earned from employment
Real estate purchased jointly or separately
Retirement accounts like 401(k)s and pensions
Bank accounts
Businesses
Vehicles
Investments
Inheritances received during the marriage
Debts like mortgages and credit cards
Any divorce involving over $1 million in total marital assets is considered a high-asset divorce in Texas. Other factors like complex corporate assets and ownership stakes in businesses can also lead to a high-value marital estate.
Key Steps When Facing a High-Asset Divorce
Here are crucial steps to take when dealing with a high-value marital property division:
1. Hire an Experienced High-Asset Divorce Attorney
Navigating the complex finances and legal nuances of a high-asset divorce requires professional legal counsel. A Texas divorce attorney well-versed in Texas divorce laws can help:
Determine value and ownership of all marital assets
Negotiate property division favorable to your interests
Uncover hidden assets if necessary
Handle complex corporate and business valuations
Minimize taxes on assets being divided
Having an experienced high-asset divorce lawyer in your corner can make a significant difference in the final settlement.
2. Obtain Accurate Valuations of All Marital Property
Itemizing and valuing all marital assets is vital. Your attorney can work with forensic accountants, business valuators, and real estate appraisers to determine precise values.
Some of the major assets needing appraisal include:
Real estate like the marital home
Retirement and investment accounts
Ownership shares in companies
Business valuations
Luxury items like jewelry, art, and collectibles
Documenting accurate values creates a complete picture of the marital estate to divide.
3. Decide Which Assets You Wish to Keep
When substantial assets are involved, deciding which you want to keep versus concede to your spouse is critical.
Factors to consider when requesting assets include:
Income potential - Assets like businesses and investment properties that can continue generating income.
Tax implications - Some asset divisions carry less tax penalties than others.
Emotional attachment - The marital home or sentimental luxury items for instance.
Ease of division - Retirement accounts can be split easily. Real estate properties may be more complicated.
Analyze each major asset and how it fits into your financial future after the divorce.
4. Be Prepared for Increased Scrutiny of Finances
A higher dollar divorces equates to increased scrutiny of finances by legal teams on both sides. Expect thorough examination of:
Tax returns from multiple years
Documentation on property purchases
Business and corporate financial records
Records of expensive purchases or gifts
Credit card and bank statements
Having organized financial records helps your divorce lawyer address any questions on asset values or ownership. Failing to disclose assets can also lead to court penalties.
5. Expect Complex Negotiations
Settling a high-asset divorce almost always involves extensive negotiations between attorneys. Be prepared for back-and-forth on issues like:
Asset valuations - Combating inflated or undervalued appraisals by the other side
Alimony terms - Negotiating duration and amount if applicable
Child support amounts - Especially if high income is involved
Division of physical assets - Determining who gets the house or vacation home for example
Compromise is key during negotiations to reach an equitable settlement. With millions at stake, discussions can become protracted. Patience and maintaining realistic expectations are vital.
6. Work with Financial Experts on Asset Division
Dividing substantial assets has major financial implications. It's crucial to work with financial planning experts like CPAs and investment advisors when structuring settlements.
Key things financial professionals can assist with include:
Analyzing tax liabilities - Determining which assets when divided will generate fewer capital gains taxes for example.
Retirement planning - How an asset division impacts retirement income and strategies.
Investing proceeds - Recommendations for investing liquidated assets or sale proceeds.
Wealth preservation - Advice on how to preserve wealth after the division.
Bringing in trusted financial help ensures you end up with a settlement that aligns with long-term financial goals.
7. Have a Strategy for Managing Liquid Assets
Many high-value divorces involve one spouse liquidating assets like selling the marital home or cashing out retirement funds. This can mean one partner suddenly has significant liquid assets that need management.
Some tips for managing liquidity include:
Discuss options with financial advisors rather than committing the funds quickly.
Park proceeds in stable investments like money market accounts temporarily.
Limit impulse purchases - buys like luxury second homes.
Use a portion for necessities like housing, vehicles, and education costs.
Consider conservative investments like income generating bonds and index funds.
Careful planning of liquid assets received in a settlement sets the stage for future financial security.
Key Takeaways
For high net worth couples in Texas, divorce involves dividing substantial marital assets. While the process is complex, strategic preparation and working with experienced professionals sets the stage for the fairest possible settlement. Being ready for extended negotiations and having financial plans for asset division proceeds can help protect your interests in the long run. With patience and perseverance, even the most challenging high-value divorce can reach resolution.
FAQs:
1. How long does a high-asset divorce usually take in Texas?
Due to the complexity, a Texas high-asset divorce case can often take 12-18 months, sometimes longer if significant assets must be valued or there are protracted negotiations.
2. What percentage of assets am I entitled to in a Texas high-asset divorce?
Texas is a community property state, so the starting point is a 50/50 division of marital assets. However, factors like custody, earnings ability, and separate property can shift percentages.
3. Can retirement accounts be divided in a high-asset Texas divorce?
Yes, 401(k), IRA, and pension accounts earned during marriage are marital assets up for division, requiring a QDRO agreement to split.
4. Can a prenuptial agreement protect assets in a high-value Texas divorce?
Yes, a valid prenup that outlines separate property provisions helps shield assets like family inheritances or pre-marital earnings from division.
5. Does Texas recognize legal separation in high-asset divorces?
No, except for very limited circumstances, Texas does not legally recognize separation. Spouses must file for full divorce even in high-value cases.
Selecting a Divorce Attorney for a High Asset Divorce in Texas
If you need support and want to connect about divorce, our team of experienced attorneys at Bastine Law Group is here to help. Reach out to us today at 281-784-3222 for more information.