Marital Property
Valuation &
Property Division
Dealing with Complex Property Division During Divorce
Married couples acquire assets and other property during their marriage, which are referred to as marital property. If the couple has been married for decades, the amount of property might be substantial—their primary residence, vacation homes, investments, savings and retirement accounts. What happens to that property when they divorce? Will the court divide it between them equally? What if one spouse helped support the family while the other took college courses and got a degree? What if a spouse received a large inheritance or gift from parents? What if going into the marriage one of the spouses had already established a successful business?
There are many factors to consider, and property division can be complex. Having a divorce lawyer with extensive experience in dealing with these types of situations can be invaluable.
What Does Characterization of Property Mean in Relation to Divorce?
Property basically falls into two categories: separate property and marital (also called community) property.
Separate Property
Separate property is property acquired prior to marriage. Examples include:
Inheritances (whether through a will, trust or descent)- Gifts to one spouse
- Personal injury settlements or awards
Spouses can also establish property as separate through a prenuptial or postnuptial agreement. It is vital that spouses do not co-mingle their separate assets with marital assets. This complicates characterizing property. Otherwise, the court might no longer view it as separate property. The court presumes all property is marital, and it is the spouse’s responsibility to prove that the property is separate through clear and convincing evidence.
Marital Property
Marital property is property acquired during the marriage. Courts view these assets as jointly owned or community property. Examples of marital property include:
- Real estate (family homes, vacation homes or investment real estate property)
- Vehicles
- Investments (stocks and bonds)
- Retirement accounts (pensions, 401Ks, IRAs)
- Boats
- Home furnishings
- Jewelry
- Art collections
- Joint debt (credit card debt, student loans, mortgages, leases, home equity lines of credit, 401K loans)
- Family owned business
Factors Involved with Property Division
Tracing Separate Property Assets
We work with financial experts to trace a client’s property. This involves establishing a paper trail that follows the property from acquisition to the time of divorce. The tracing process shows how separate property might have changed form. Perhaps you exchanged it or sold it during marriage. For example, let’s say you owned a house that you inherited from your parents. You sold the house and the proceeds went into your bank account. Then you took the money to invest in a start-up company that you founded in your name.
Where tracing separate property assets becomes complicated is when you commingle it with marital property. Let’s say you deposited the house sale proceeds in a joint bank account that you shared with your spouse. You would need clear and convincing evidence to prove that the proceeds in the joint account did not become community property.
Your attorney and tracing experts can help you gather documentation to trace your separate property.
Valuation
Property or assets valuation is another vital aspect of property division. For many couples, their family home is the largest asset they own. However, this may not be the case for couples with high net worth. The best way to assess the value of your home is through an appraiser. The appraisal takes into consideration the following:
- Size of land the home resides on
- Square footage of the house
- Number of bedrooms
- Comparative value on the market
- House condition and repairs needed
Valuation might also play a key role in assessing art, collectibles, jewelry, businesses and other valuable assets that could be considered community property.
Complex Property Division
Texas is one of nine U.S. states that is classified as a community property state. What does this mean? It means that courts view community property as co-owned and divide it between the spouses. However, it does not necessarily mean that the division is 50/50. Texas courts base property division on what is “fair and just.” Until the divorce is final, community property remains intact as jointly owned. Factors that judges consider when ruling on property division include the spouses’:
- Children
- Spouses’ age, health, education
- Employability, ability to pay
- Marriage length
- Fault for the marriage breakdown
- Fraud (spending/hiding assets)
- Property liquidity
- Extent of debt
- Amount of separate property
- Taxes
- Attorney’s fees
- Education
We can help you with property division
Whether your issues with property division are straightforward or complex, our firm can help. You can rely on our considerable skills, knowledge and experience along with our access to a network of financial experts. We strive to make the process easier for you and help you reach your objectives.
Call 940.566.0606 to schedule an appointment.
Reach out to us
DTX Family Law
525 S. Locust Street, Ste. 100
Denton Texas 76201
Phone: 940.566.0606