Texas is a community property state, which means that all assets classified as “marital property” will be subject to division in a divorce. Furthermore, because Texas is a community property state, the community estate is generally divided equally among the parties, unless a disproportionate division is warranted. As we’ve discussed in earlier articles, marital property is essentially any property acquired after the marriage, unless one of several exceptions applies. For instance, property acquired via inheritance, or via gift, is typically considered separate property even if acquired during marriage.

In order to properly divide property in a divorce, both parties need to be fully transparent with their asset holdings. Sadly, in some cases, parties are less than fully transparent, and sometimes people even deliberately hide assets in order to “cheat” their spouse. Divorce is very often a process involving heated emotions, and so we shouldn’t be too surprised to learn that this happens from time to time. Nevertheless, it is still unfortunate to see.

In this post, we’re going to discuss the various methods that spouses use to conceal assets in a Texas divorce, and then go over some of the potential consequences for this type of behavior.

Many people put off divorce until after the holidays, not wanting a marital dispute looming over what is supposed to be a festive time. The wait may be even longer for Texas spouses who have put off a decision due to the uncertainty of the pandemic.

With 2022 in full swing, you may decide that it’s the right time for a fresh start, but you’re not sure how to proceed. Understandably, you may be caught up in the emotions of taking that step. But it’s crucial to do everything you can to ensure the best financial situation possible.

Taking inventory of marital assets

One way to deal with the fear and uncertainty is to take control of the process when preparing for divorce. Creating a checklist of marital assets not only makes the process less stressful but can help you achieve better results. Your list should include:

Divorce can be a sad and challenging time. So much so that some Texans want to get it over with as soon as possible. However, speed should never replace thoughtful preparation to ensure you receive your fair share of marital assets.

Besides the emotional stress the process can create, the complexities of dividing marital property aren’t easy. An experienced family law attorney can help guide you through the process, but it’s vital to your future well-being to do some homework on your own.

Discovering and cataloging marital assets

If your spouse has handled the family checkbook and taken care of most or all financial matters during the marriage, you may not know where to look for marital assets and debts. But, with a little digging, you can gather the documentation you need for the following items:

The year 2020 was certainly one for the books! Now that the holidays are over and we are into 2021, you may be wanting a fresh start. Is it time to make a transition in your life? Are you ready for a new beginning? Before you consider the DIY approach to divorce, beware. There are a lot of mistakes we frequently see people make that can have long-term, and often irreversible consequences.

Advance Division of Assets

Perhaps you and your spouse have discussed how to divide your estate upon divorce and generally have an agreement. That’s great! However, you should resist the temptation to go ahead and divide the assets before filing or finalizing your divorce. Why? First, not all assets are created equal. It may seem reasonable to trade the house for your spouse’s retirement account, but they may not be even swaps. What is the fair market value of the house? Does it need repairs to realize any value from it? The retirement account is not liquid and can result in in penalties and interest if reduced to cash. And don’t cash in the retirement account! You will bring unnecessary penalties to yourself that are not necessary. There is a way to divide the retirement account post-divorce where the non-participating spouse will not be penalized. But it needs to be done correctly. Finally, a division that is just and right may nor may not be a 50-50 division. A lot of factors, including the assets of both spouses and their respective earning powers and the tax effect of the division should all be taken into consideration.

Not Accounting for All Assets

A second mistake we see people make is drafting their own divorce decree and failing to account for all assets. The fact that an asset is in the sole name of one spouse does not mean it does not get addressed in the order. A house purchased during the marriage is presumed to be community property, even if only one spouse’s name is on the title. If you have not told your spouse about that bank account with your mad money or the winning lottery ticket, and he finds out about it later, you may find yourself in further litigation. Undisclosed assets are subject to future division, and in some instances, may be awarded 100% to the other party. The best way to prove disclosure is to list it in your order.

While U.S. divorce rates have declined in recent years, the numbers remain sobering. According to the American Psychological Association, about 40 to 50% of marriages in the U.S. ultimately end in divorce.

Whether a marriage has lasted one year or many, spouses often end up pooling many of their assets as well as sharing personal belongings. When facing divorce, deciding who gets what can be confusing and contentious. Texas couples should know that, if they cannot negotiate with each other about a fair division, the court will distribute property according to state law. This is why the assistance of a divorce lawyer is so important.

What is community property?

Along with eight other U.S. states, Texas is a community property state – meaning that nearly all property that either spouse acquires during the marriage is considered “community property” – and belongs to both partners equally. In addition to earned income, retirement benefits and investments, community property can include vehicles or real estate that one or both couples purchased while married, regardless of whose name is on the title.