If you have an impending divorce, you are probably worried about many things, not least of which being asset distribution. This phase of the divorce is especially difficult for those with extensive and diverse assets. How can you know which parts of your property the court will divide, and how they will decide which of you gets each asset?
How asset division works
You have the option of hiring attorneys or a mediator and coming to a private agreement as to property division with your spouse. The court will then examine this agreement for fairness, and will either approve or deny it.
If you cannot come to a private agreement, then the court will apply Texas property division law. This means that the court will first divide all of your property into two categories – marital and separate property.
Marital property is generally anything you acquired while you were married, while separate property is anything you had before the marriage, or things you received during the marriage through an inheritance or gift.
You will get to keep all of your separate property. Texas follows the community property system, meaning that they will divide the marital portion of your property equally between you.
Tangible and intangible assets
The court can divide any type of property, as long as it qualifies as marital property. The most obvious examples would be tangible objects, such as cars, furniture and your family home. However, courts will also divide intangible assets. These can be investments, stocks, bonds, bank accounts, retirement accounts and things of that nature.
When it comes to dividing retirement accounts, you will generally have to determine how much of each account was accrued during your marriage, and how much you contributed to it before getting married, so that the court can determine how much of the account’s balance qualifies as marital property.
If you own your own business, it might qualify for division as well. Your business’s qualification as separate or marital property will depend upon when it started, as well as whether you co-own it with your spouse or not.
It can be difficult to prepare yourself for the property division stage of divorce, especially if you have substantial assets to worry about. Knowing what the court is likely to divide if the task is left to them will help you to know how best to approach property division negotiations with your ex-spouse.