When you are preparing to divorce your spouse, it is very important to know how to protect assets from divorce. After the divorce is over, it is very likely that you will be in a difficult financial situation. For that reason, you need to make sure that you can keep your personal assets and obtain as much of the community property as you possibly can. If you are still in the family home, begin gathering as much financial information as possible. This is how you and your attorney will determine the most accurate picture of your finances.
What Are The Marital Assets?
The following is a list of marital assets for which you will need to gather documents:
- Checking accounts and savings accounts
- Investment accounts
- Retirement accounts
- Trust funds
- Cars, furniture and real estate
- Art, china, silverware, furs and jewelry
- Partnerships or business entities
What is Community Property in Texas?
The money that each spouse makes and the property that each spouse purchases with that money is “community property.” This means that both people own the money and the property equally.
What is Considered Separate Property?
Married couples are also entitled to have separate property. Separate property is acquired in three ways that
- The spouse owned the property before the marriage.
- If someone gave a gift to one spouse, it is the separate property of that spouse.’
- A spouse may inherit property, and this will be separate property as well.
If you are going to protect assets divorce, you will have to itemize the property that can be classified as community property and the assets that can be classified as separate property. The best thing to do at this point is to hire a Texas divorce attorney. Your divorce attorney will take you through the arduous process of determining how to classify each asset. A party must prove that it is a separate property with clear and convincing evidence. Once this property has been determined to be your separate property, it cannot be divided in your divorce.
What is Considered Comingled Property?
In Texas, if you earned money on a separate account, the money that was earned will be community property. If this property increases in value, the appreciation may be your separate property.
If you deposited separate money into a marital bank account, the funds would be comingled. This will complicate matters when you begin to separate these accounts. If you purchased an asset using money from a comingled account, things are further complicated.
The property the Two of You Own Together
It is very important that you discuss the property that you and your spouse own together if you want to know how to protect assets from divorce. Otherwise, the following could happen to you:
- If the judge gives the property to your spouse, you could be responsible for paying the mortgage. For example, the divorce decree may state that your spouse owns the house and the land, and the judge gave him or her responsibility for paying the mortgage. If your ex-spouse stops making the payments, you will be responsible for paying them.
- The judge may order your spouse to pay you a portion of the equity in the house and land, but this needs to be secured by a lien.
- If you are keeping the property, you must make sure that your ex-spouse signs a Special Warranty Deed. You may not be able to sell the property later if this is not done.
Are Inherited Assets Protected from Divorce?
If you inherited assets during the marriage, Texas law considers this money to be your separate property. It cannot be divided in your divorce. If you treated this money as if it were community property, it may be divided in your divorce. For example, you inherited $30,000 from your mother. In Texas, this is separate property, but if you deposit it into your joint checking account or purchase a vacation home with it, proving that it is separate property becomes more difficult.
Have Your Community and Separate Property Appraised?
Even if a piece of property can be classified as community property, you will need to know its precise value. This will make it easier to divide the assets equally among you and your spouse.
Have Your Finances Examined by Your Attorney
The best time to do this is before you file for divorce. You and your attorney will need to examine your finances early so that you can complete this portion of the divorce proceedings in the easiest manner possible.
Examine Your Prenuptial Agreement
If you drew up a prenuptial agreement before your wedding, this document may already have your community property and separate property listed. It will also explain how the assets were going to be separated.
File for a Fault Divorce
Community property is divided equally during a no-fault divorce, so you may wish to file for a fault divorce in order to protect assets divorce. If you file for a fault divorce, you may receive a greater portion of the community property. To file for a fault divorce, you will need to file based on the grounds for divorce in Texas.
In most cases, no-fault divorces list insupportability as the reason for the divorce. This means that the marriage has become insupportable because there is so much discord between the two spouses, and the couple’s relationship has been destroyed. They cannot keep the marriage going towards its legitimate end. You are not expecting to ever be able to reconcile with your spouse again.
What Are The Grounds for Divorce in Texas?
The grounds for divorce in Texas for a fault divorce include the following:
- Conviction of a Felony
- Living Apart
- Confinement in a Mental Hospital
To file for divorce in Texas, one spouse must have been living in the state for at least six months. In addition to that, one spouse must have been living in the county in which you will file for divorce for at least 90 days. In most cases, you are going to need to obtain a “Sworn Inventory and Appraisement” that helps you and your spouse exchange financial information. You will be required to list several things in this document, including real estate, business information, bank accounts, investment accounts, and retirement accounts.
For help during this difficult period, contact us at the Covington Law Firm.