How to navigate through a high asset divorce?

Almost every couple owns assets together, referred to as community property in Texas. A high-asset divorce is a divorce that include marital assets that are valued at a significant amount.

Such divorces are typically between couples who own multiple real properties, luxury cars, trading accounts, retirement accounts, businesses or have complex assets that they have an interest or investment in.

But, why are high-asset divorces more complex as compared to a standard divorce?

To understand the complexities of such divorces I've complied some relevant information below that you should consider.

1. What is Marital Property property?

Any salary, bonus or earnings, retirement contributions, homes, businesses, or cars purchased during the marriage by either spouse are considered Marital property and subject to division in a divorce, short a prenup or post-marital agreement.

In Texas, Marital property is typically divided equally (50/50) if such division is a just and equitable division approved by the court and depending on the needs of the parties and the property available for division.

2. What Marital assets are considered when determining a property division?

- Real estate properties (family/vacation homes, investment properties, etc.)

- Vehicles

- Wages/income

- Debts incurred during the marriage

- Family businesses

- Investment portfolios

- Trusts

- Retirement funds

- Inheritance and estate issues

- Pensions

- Intellectual property

- Offshore accounts

-Anything of value owned by the parties. 

3. What is considered Separate Property?

Separate property is property that was owned or acquired by either spouse before the marriage or inherited by a spouse before or during the marriage. If your soon-to-be-ex had money before you two were married, most likely you will not get a penny of it, especially if it was never commingled and they can trace such funds to show it is their separate property.

You are also out of luck if your spouse received money from an inheritance or a gift from another person during your marriage, such property will be confirmed as their separate property. 

4. How are retirement accounts treated in a divorce?

Couples often have retirement accounts with funds accrued during their marriage, so you should be aware of a few things about retirement as well.

1. Military Retirement

- Military retirement benefits, including Thrift Savings Plans, may be divided in a Texas divorce.

- Only funds contributed to military retirement accounts during a marriage are considered community property, and you have to be sure your spouse was in the military for a specific period of time and married to you to be eligible for specific rights through DFAS. 

2. Federal Railroad Retirement Plans

- Railroad employees often have additional non-federal retirement plans, like 401(k)s, that must be divided upon divorce, and will usually require a calculation to be determined based off a specific formula tied to the plan or a financial expert.  

Remember that each retirement plan may contain unique requirements governing division in the event of divorce. An experienced family law attorney who is familiar with ways to collaborate with plan administrators and avoid roadblocks can ultimately expedite the retirement division process, and help you determine when a financial expert would be necessary and beneficiary for calculating the portion that is community vs. separate property.

5. How should one approach negotiating when you have a high asset divorce?

Every divorce is unique no matter how many assets are involved, but when high net assets are involved, complexity can builds fast. I have seen people make some common mistakes in their divorce proceedings that cost them heavily because they were approaching the negotiation table with their emotions at the forefront instead of viewing it as a business decision for their financial future. 

Here are a few points to consider to save yourself time and money:

1. Do not agree to accept too little, or to pay too much just to get the process over with. 

2. Do not shy away from hiring a financial expert or expert witness simply because of the cost.

3. Do not forget that after your divorce is settled, you will be required to pay taxes on some assets you have been awarded, so factor in that amount and speak to a financial advisor before signing an agreement.

4. Don't be tempted to protect assets by transferring ownership to another family member or a friend, opening separate accounts in your name, and diverting funds from a joint account in an attempt to hide assets, it will only cause more confusion, cost more money, and could negatively impact your property division awarded in the end.

5. Do not take short cuts in your divorce or resist hiring a skilled, experienced, and reliable high-asset divorce attorney to assist you navigate through the divorce process.

While no divorce is easy, this can be especially true in divorces involving a long process of identifying and dividing complex and high-value assets, so do not allow your emotions to take charge during the process. 

If your marriage has come to an end and it’s time to close this chapter of your life please contact our office to learn how our office can be of service to you. 

You can also book a session with Attorney Ashley Green on Divorce Coaching before you decide to file for a divorce. The Divorce Coaching program consists of a 3-hour online private coaching session. Contact our office to learn more. 

Attorney, Ashley Nicole Green is a divorce attorney in Houston, a divorce attorney in Fort Bend, a divorce attorney in Brazoria, a divorce attorney in Matagorda, and other surrounding counties that is here to help you protect your assets! Contact the Law Office of A. Green today to book a free case evaluation!

You can always connect with us via phone 832-844-1677 or via email at agreenteam@lawofficegreen.com