8 Considerations When Dividing Property in Divorce
Divorce may be different for every set of spouses, but many cases involve the need to address property division. From physical assets and family homes to bank accounts, businesses, and varied investments, there can be many things to unravel when negotiating a property division settlement, or litigating to protect what’s yours.
At Hendershot, Cannon & Hisey, P.C., our Houston divorce attorneys have excelled in helping clients resolve even the most complex property division cases. Because dividing property in divorce involves far more than gathering up what you have and divvying it out between spouses, we want to stress the importance of calling in the right people to protect your rights and interests – and what experienced lawyers like our team consider when handling matters of property division.
1. Characterization of Assets
While it’s true property division has its place in many divorce cases, it doesn’t mean all assets spouses own are divided upon divorce. In fact, one of the most important considerations, and common point of contention, is the classification of assets as either community property or separate property:
- Community Property – Assets which are acquired during the course of a marriage are considered community property subject to division in divorce.
- Separate Property – Assets acquired by one spouse prior to marriage, or acquired during marriage as a gift or inheritance, are characterized as separate property, and are exempt from division during divorce proceedings.
Though this may seem straightforward, characterizing community and separate property can be a challenging task. That’s particularly true in cases where separate and marital property are comingled, entitling spouses to at community property interest or reimbursement of once-separate property during divorce. Disputes about the classification of assets can also give rise to more challenging proceedings, including the need for litigation.
Proper valuation of assets is critical when dividing property, and especially so when a spouse owns a business, has a partnership, or operates a medical practice or other professional practice. Valuing assets accurately under these circumstances is a task that requires experience and insight in finance, accounting, and Texas law. Professionals with business interests and non-professionals looking to protect their rights need to consider the importance of valuation in their divorce, from matters of personal and commercial goodwill and unique and varied business assets to options for reaching a workable resolution.
3. Retirement Accounts
In their focus on protecting tangible assets like a car or a home, many divorcing spouses forget retirement funds are also divisible in divorce. Depending on the nature of each spouse’s retirement savings, how long they’ve worked, and what type of account they have, there can be additional steps, special forms and procedures, and unique considerations involved in reaching a property division settlement. Because retirement accounts and pensions are often some of the largest assets in divorce cases, they demand careful and calculated consideration.
4. Unique Assets
Our legal team works with clients from all walks of life, including varied professionals, business and landowners, and Texans with uniquely Texan or unusually complex assets. In addition to large estates, businesses, and special types of pensions, unique assets may include:
- Oil, gas, and mineral interests
- Farms, ranches, and livestock
- Intellectual property such as copyrights, patents or trademarks
- Digital or virtual assets, including web domains
- Private jets, including fractional ownership
- Rare and valuation collections
- Stock options, bonds, and investments
- Separate property inheritances
When a divorce involves spouses who own unusual, complicated, or very valuable property, the stakes are elevated, and the need for proper valuation, negotiation, legal compliance, and fair division is critical.
5. The Family Home & Real Estate
Real estate accounts for a large portion of marital estates, and can have more than monetary value for many folks. In divorce, there’s a lot that goes into dividing up the family home – from characterizing it as separate or community property and identifying any contributions or entitlements to reimbursement to addressing matters of equity and valuation, rental or vacation properties, taxes and liabilities, and more. Depending on the goals of spouses and their situations, such as wanting to stay in the home, there are also various options for resolution.
6. The Age of Spouses
Age may be just a number, but in matters of divorce it can be an important consideration. Younger couples with shorter marriages may have different goals and needs when it comes to their future, earning potential, and matters like spousal support. Older couples with longer marriages, part of what’s been dubbed “Gray Divorce,” will also have different things to consider, including how far away from retirement they are, their work history and ability to continue working, medical concerns, and more.
7. Spousal Support
While spousal support, also known as alimony or spousal maintenance, may be a separate matter from property division, it’s still an important consideration that can impact final settlements. In some cases, spouses may choose to offset disproportionate shares of assets by awarding more or less spousal support. The need to consider alimony and other issues in relation to property division shows that you can’t make decisions in a vacuum, and instead need to consider all the moving parts which contribute to the overall divorce.
8. Hidden Assets
Not everyone plans to hide or conceal assets in divorce, but it can and does happen. As such, ensuring a full account of each spouse’s finances is critical to identifying whether assets that should be included in the marital estate are being hidden, concealed, or omitted. When those discoveries are made, you’ll also want to be sure you call in the right people to help you take the most appropriate steps toward protecting what’s yours.
If you have questions about property division or any other divorce or family law matter, Hendershot, Cannon & Hisey, P.C. attorneys are standing by to help. Call (713) 909-7323 or contact us onlineto request your initial consultation.