Dallas Asset and Debt Division Divorce Lawyer

Properly dividing your Dallas assets and debts during a divorce is extremely important and not as easy as some believe. Just collect everything and divide it in half, right? Wrong! There are rules of law, there are exceptions to those rules, and then there are exceptions to those exceptions. Then there are valuation and tax considerations that must be considered. Then there is the skill and experience in negotiating a settlement if possible or evidence gathering and arguments to be made in front of a judge if necessary. The result can make a dramatic difference in what you keep, what you are burdened with, and the resulting financial foundation for the next chapter of your life.

Depending on the size and value of your marital estate, it’s extremely important to work with an experienced asset and debt division divorce lawyer, who will educate you and work with you to properly:

• Inventory all assets and debts.
• Characterize each item as community or separate property.
• Obtain an accurate value of each asset.
• Determine the net value of each asset after the appropriate tax considerations.
• Negotiate the best settlement possible or fight aggressively for your fair share if necessary.

Texas Law on Dividing Your Assets and Debts

Texas law provides that all income, assets and debts that are accumulated during a marriage are presumed to belong to the marital community estate.

When a couple divorces, the community estate is subject to a “just and right division” between the parties. Contrary to popular opinion, Texas courts have held that a “just and right” division of community assets is not necessarily an equal, fifty-fifty split of the community estate. Instead, if argued properly with the appropriate evidence, the court will look at certain factors that may warrant deviating from a 50-50 division.

Courts may consider any of the following factors when dividing community assets:

• Each party’s capacities and abilities
• Based on the fault of one spouse, what benefits the other would have enjoyed if the marriage had continued
• Business opportunities
• The parties’ respective health conditions
• The age difference between the parties
• The size of each party’s separate assets
• The nature of the property in the community estate
• The relative income or earning ability of each person.

Complete Inventory

All community property is subject to a just and right division upon divorce including real estate, personal property, intellectual property, financial accounts, digital currency, certain retirement plans and pensions, and employment benefits, just to mention a few, as well as debt. Therefore, it is important to go through and inventory all your assets as well as the assets of your spouse so that nothing of significant value is left out. It may even be necessary to perform some level of formal or informal inquiry to make sure that nothing has been missed, whether intentionally or unintentionally.

Community Property or Separate Property

Once a complete list is established, the assets and debts must be characterized as either community property or separate property. Assets that either spouse acquired during the marriage are presumed to be community property and legally the shared property of both parties, unless they were acquired by gift or inheritance. Community property is subject to division regardless of whose name is on title.

Anything that you owned prior to your marriage, on the other hand, will be characterized as separate property. Items of separate property, however, that have increased in value during the marriage may be subject to division of the increased value. For example, this may be true of a business or certain real estate. Furthermore, one spouse may have a partial claim to the separate property of the other if work was performed or made investments during the marriage to increase its value.

If there is a disagreement on the characterization of an asset, proper evidence will need to be collected and presented to a judge to avoid losing interest in an asset that you are entitled to.

Proper Valuation

Once an inventory is complete, to decide how to divide the property, you need to know what each asset is worth. Some assets, like bank accounts, are easy because a checking account with $50,000 is valued at $50,000. But other assets, such as retirement accounts are more complicated. Certain retirement benefits, such as defined benefit retirement plans, will require either a separate appraisal of the present community value, or a decision will need to be made to rely on division through a Qualified Domestic Relations Order (QDRO), a separate court order where the pension administrator is ordered to divide the pension pursuant to a formula.

Other assets, such as real estate, interest in businesses, intellectual property will require using a professional to determine a fair market value.

If the matter goes to a hearing, each side must present evidence of the fair market value of the asset to be divided. Whether this is done through documentary evidence, lay witness testimony, or expert testimony is an important decision that you and your lawyer will need to consider carefully.

Tax Considerations of Assets

A very important issue, one often missed even with “experienced” divorce lawyers is the fact that all assets are not created equally when it comes to their net value.  When valuing and dividing assets, it is critical to consider any potential tax implications. The tax consequences need to be considered depending on the type of asset and how it’s divided. Otherwise, you will be exposed to tax obligations sometime after the divorce is over and the assets have been assigned to you. For example, $100,000 in cash has a value that is different than $100,000 in 401(k), which comes with early withdrawal penalties and tax consequences for the year of withdrawal. The experienced lawyers at the Ashmore Law Firm can guide you through these issues and ensure you receive a fair division of assets.

Do not underestimate the importance of properly managing a property division during a divorce. Whether you and your spouse reach agreement on asset division or if a judge will need to decide the appropriate division, the expert lawyers at The Ashmore Law Firm can help you evaluate, properly value and then either negotiate a settlement for the division of your assets and debts, or, if settlement is not possible, represent your interest in court proceedings and get the best possible outcome for you.

Are You in Need of an Experienced Dallas Asset and Debt Division Divorce Lawyer?

If you need a caring, experienced Dallas asset and debt division divorce lawyer please contact us online or call our office directly at 214-559-7202 to schedule a  consultation.