Divorce can be an incredibly stressful and emotionally draining process, and the community property laws of Texas often seem to exacerbate this stress by making divorcing individuals feel somewhat powerless when it comes to asset division. This is felt particularly acutely in high net worth divorce cases involving spouses who control substantial assets. If you and your spouse are a high net worth couple planning to divorce in the near future, it’s natural to have concerns about your property rights as you begin the divorce process in light of the community property laws of Texas. At the Law Firm of William A. Walsh, our team is prepared to provide the professional guidance and legal support you need to navigate your divorce case with greater confidence.
Traditionally, the definition of a “high net worth divorce” included any divorce involving assets valued over one million dollars. Today, the definition is more flexible, and most high net worth divorce cases involve marital assets totaling more than $10 million. High net worth divorce cases not only include high value assets but also complex assets, including stock portfolios, business investments, and other property that is not so easy to divide.
The state of Texas upholds a community property statute, meaning that all assets and property gained during the course of a marriage remains the property of both spouses. If you and your spouse’s divorce qualifies as a high net worth case, you need legal counsel to help you ensure the result of your divorce is fair and reasonable.
A high net worth divorce involves much more complex financial issues than a typical divorce case, so it is crucial that you secure legal counsel from an attorney with specific experience handling high net worth divorce cases. Attempting to navigate a high net worth divorce case without legal counsel is a very bad idea. Not only may you overlook important financial details that can create long-term financial problems for you, but you may also unwittingly agree to a divorce order that does not suit your goals and interests.
Working with an experienced Granbury high net worth divorce lawyer is the best way to add a layer of financial security to your divorce process. When you work with the Law Firm of William A. Walsh, you can rest assured that our team will thoroughly investigate every aspect of your case to provide the most comprehensive legal counsel possible.
Your Granbury high net worth divorce lawyer will help you understand your financial concerns in greater detail and ultimately help you approach the situation with greater confidence. In a high net worth divorce case, property division is typically the main point of contention between the divorcing spouses.
Texas upholds a strict community property statute that requires all marital assets to be equally divided between divorcing spouses regardless of the underlying reason for the divorce. This means that it does not matter if your spouse’s behavior led to the breakdown of your marriage. Under Texas’ community property statute, they are still entitled to receive half of the marital property in divorce.
This means that one of the most crucial aspects of your high net worth divorce case is defining “marital property.” Typically, marital property includes any and all assets and property gained by either spouse during the course of their marriage. This includes income earned by both spouses, real estate and other property purchased jointly by the couple, and any other acquisitions gained with marital assets.
The other type of property that will come into play in a Texas high net worth divorce case is separate property, or property owned by just one of the divorcing spouses. Texas state law defines separate property as anything a spouse owned prior to marrying, gifts they received during the marriage, and inheritance from other family members. It is also possible to claim separate property rights over assets gained from one’s spouse if they can prove a donatory intent in the receipt of the property in question.
One caveat to the concept of separate property that all divorcing individuals should keep in mind is the legal concept of “transmutation.” This describes separate property qualifying as marital property under certain conditions, typically involving one spouse’s contributions toward improving the value of a piece of community property. For example, if you owned a home worth $300,000 before marriage and your spouse contributed $150,000 toward renovations that significantly increased the property value, or if they were the primary caretaker of the home for many years during your marriage, the court may deem that the home has transmuted to community property.
There are two main options for handling the division of property in a high net worth divorce case: the couple may move to litigation and allow a judge to decide, or they can explore alternative dispute resolution to reach a collaborative agreement privately. Typically, the latter option affords the divorcing couple with the most control over the outcome of their property division, but it requires both spouses to be willing to negotiate.
When a couple cannot reach a mutual agreement concerning property division in a high net worth divorce, a family court judge will need to make a property division determination based on many factors that align with Texas state laws. If you and your spouse must litigate your divorce, you can expect the judge to consider:
Once a judge has considered all of these factors, they will be prepared to deliver a ruling concerning asset division in the case. However, Texas’ community property statute is quite strict, and division of assets may require the couple to liquidate some assets or sell property to divide the proceeds. This is one of the many reasons why so many couples divorcing in Texas and throughout the US choose mediation instead of litigation to handle their divorces.
A Granbury high net worth divorce lawyer will likely encourage you to consider the potential benefits of alternative dispute resolution before moving to litigate your divorce. Put simply, mediation can save you and your spouse a significant amount of time and money in handling your divorce compared to what litigation entails. A high net worth divorce case has the potential to require many months or even years before it reaches a conclusion depending on the complexity of the case. By comparison, it’s possible to settle your divorce through mediation in a matter of weeks or a few months.
Mediation involves you and your spouse meeting privately with your respective attorneys and a neutral mediator who will assist the parties in reaching a mutually agreeable divorce order. You and your spouse can privately negotiate your divorce terms with much greater flexibility than litigation under Texas’ community property statute would allow. For example, instead of liquidating certain assets and splitting the proceeds, mediation could provide you and your spouse the opportunity to effectively trade certain assets and property for a more personalized outcome to your high net worth divorce.
Divorce mediation also ensures your negotiations remain private. When you litigate your high net worth divorce, everything said in the courtroom becomes public record. Mediation, on the other hand, allows you and your spouse to keep your negotiations confidential. The record of your divorce will be public once you submit your proposed divorce agreement, but everything said in mediation remains private.
High net worth divorce cases are some of the most difficult to navigate. When substantial amounts of money are on the line, some people are willing to engage in deception and fraud for personal gain. This is yet another reason why it is crucial to hire an experienced Granbury high net worth divorce lawyer to represent you. Your attorney can coordinate assistance from expert witnesses if you need to provide dissipation or uncover your spouse’s hidden assets. For example, if you suspect your spouse has been funneling money into a private account that should be included in their financial disclosure, your attorney may have a forensic accountant perform a thorough review of their accounting records to determine the truth.
Dissipation, or wasting of marital assets, can have a significant impact on the outcome of your divorce. If you are preparing for divorce, it is typically best to avoid making any major purchases, selling any marital property, taking vacations, or anything else your spouse may construe as dissipation. If the court discovers that a divorcing spouse has intentionally dissipated marital assets solely to deprive the other spouse of those assets in divorce proceedings, they may receive a smaller share of marital property as punishment. In the event a divorcing spouse engaged in any fraudulent activity for personal gain, such as hiding assets subject to division under Texas’ community property statute, they may face criminal charges for fraud, perjury, or contempt of court that can lead to fines and even jail time.
The divorce process is never easy, but it is especially stressful for high net worth individuals facing very complex financial issues as their divorces unfold. When you choose a reliable and experienced Granbury high net worth divorce lawyer to represent you, you can approach your divorce with clarity and confidence. Your attorney will likely begin representing your case by performing a thorough financial analysis of your situation. Financial disclosure is a crucial part of any divorce, but it is particularly important in a high net worth divorce case.
Financial disclosure requires providing the court with complete and accurate financial records. Any mistakes or omissions can create major problems for you as your case unfolds, so it is best to work with an experienced Granbury high net worth divorce lawyer to ensure your financial disclosure documents are as complete as possible.
Next, your attorney will help you decide the best approach to your divorce case. Most modern divorce attorneys encourage their clients toward mediation whenever possible. Even if you and your spouse seem to be unable to agree on anything, you should both take time to assess the potential value that mediation offers both of you. Remember, you do not have to cover every issue your divorce entails through mediation, and some issues cannot be legally resolved through alternative dispute resolution, such as child custody. You can, however, settle as much as possible through private mediation before moving to litigation to handle the rest of the issues your divorce entails.
The sooner you begin working with a reliable Granbury high net worth divorce lawyer, the easier it will be to navigate the complexities your case entails. At the Law Firm of William A. Walsh, we believe in providing comprehensive, detail-oriented, client-focused legal representation in every case we handle. You can rest assured our team will provide the full range of our experience, skill, and professional resources to you as we help you navigate your high net worth divorce case. If you are ready to speak with an experienced Granbury high net worth divorce lawyer about your situation, contact the Law Firm of William A. Walsh today to schedule a consultation with our team.