We Will Assist You In Reaching a Favorable Property Distribution
Distributing property between spouses as part of the dissolution of marriage process can be a highly contentious and challenging matter. It is important to assess the value of the assets accurately and to also properly categorize them as either separate or community property. All property attained during a marriage is presumed under Texas law to be community property. To ensure that the property acquired during the marriage is properly treated during the distribution, your attorney should consult with appraisers and financial advisors. The Patrick D. West Law Firm will work diligently to achieve a favorable property distribution to you.
Protecting What’s Yours in a Divorce
In determining whether an article of property should be denoted as separate or community in nature, it is important to review the title to that property, who holds the title, and when the property was acquired. The rightful owner of the property may be determined by following the inception of title rule, which examines the manner in which the property was acquired and when. In this way, a spouse may successfully show that an article should not be deemed to be community property, such as when the spouse acquired it before the marriage.
It is not always such a simple matter to convince a court that an item is not community property, because a spouse must present clear and convincing evidence to persuade a court that an item should be classified as separate property. Otherwise, the item will be included with the rest of the community property, which will be distributed according to equitable factors and the interests of both parties.
Separate property may include those items which pass to a spouse by gift, devise or descent during the term of the marriage, under Texas law. If a spouse receives compensation for personal injuries during the marriage, these assets may be considered to be separate property as well.
Community property may include such valuable and high-end articles such as real estate (both family and investment properties), business assets and income, investments in the stock market, intellectual property, bank accounts, and the list goes on. The court has the power to distribute all of this property between the parties as it sees fit. In some cases, identifying whether an asset belongs in the separate or community property category is more difficult because the spouses may have commingled assets between these two categories, or hidden assets as well. Commingling of property may occur if one spouse purchased a business prior to the business, but expanded and improved that business using community property.
Premarital and Postnuptial Contracts
A good way to protect the property that is clearly yours is to complete a premarital or postnuptial agreement with your spouse. This agreement can provide that certain articles of property shall be designated separate property in the event of a divorce. When you and your spouse can agree upon a list of separate property when your relationship is good, it will save both of you from conflict later on down the road if you should divorce for any reason. The Patrick D. West Law Firm can assist you and your spouse in finalizing a premarital or postnuptial agreement, to protect the property you care about the most to categorize it as separate property.
Even in the absence of a prenuptial or postnuptial agreement, you may still successfully designate an article of property as separate by use of the “tracing” method. In the tracing process, experts will conduct a careful accounting of any documents and evidence associated with an asset to determine its rightful owner.
If separate property such as rental homes or security investments increase in value, those increases will remain separate property as well. However, if the separate property generates any income, those assets will go to the community property category. Examples of this might include rental income from an investment property that one spouse acquired prior to the marriage.
The Proper Designation of Trust Assets
Identifying whether a trust asset is community or separate property can involve complex factors. Trusts grant equitable title to beneficiaries and a trustee retains legal title. If you want to safeguard your separate property prior to entering into a marriage, an irrevocable spendthrift trust may be an effective way to achieve this objective. So long as a beneficiary of the trust does not acquire a present possessory right to the trust assets during the divorce process, any income from the trust will remain separate property.
However, you should take steps to ensure – if you want the trust assets to remain separate –that your spouse cannot obtain a present possessory right to any trust asset in the event of a divorce. Similarly, you should safeguard your trust against becoming susceptible to mandatory distributions during a divorce or allowing your spouse to have control over distributions in such an event. Such problems can potentially be avoided if the spouse is not a trustee, and the trustee has authority over the trust distribution schedule.
A trust fund established for the benefit of a spouse by his or her parents, even if during the marriage, is generally considered to be separate property. If such a trust fund were to earn income which is distributed during the course of the marriage, however these assets would most likely be considered community property.
If one spouse has greater financial means than the other, there may also be questions regarding whether the higher income spouse concealed income by surreptitiously transferring it into hidden accounts, unknown or inaccessible to the other spouse.
Protect Your Assets By Consulting the Experienced Family Law Attorneys at The Patrick D. West Law Firm
Whether you and your spouse are preparing for your marriage ceremony, or you are already in the midst of the divorce process, we at The Patrick D. West Law Firm can assist you in retaining the property which matters to you the most. Call us at (817) 332-2600 or contact us via our online form to set up an appointment.