Divorcing in a community property state? Save your assets!

On Behalf of | Nov 28, 2017 | Property Division

Texas couples whose marriages disintegrate are subject to community property laws. What this means is that all of the assets and gains of the marriage must be divided equally. But that doesn’t mean that you shouldn’t use advice and guidance from legal and financial professionals to ensure that you get what you need to move on in life.

A 50/50 split can still be leveraged

You can still make your own agreement, subject to the court’s approval. Family law judges can weigh in if they suspect that coercion or other unethical tactics were used to bring about the agreement. But, generally speaking, if the couple is content with the property division, Texas courts are loathe to interject themselves into the mix.

This can work to your advantage in a divorce. Perhaps you are ready to divest your interest in the family home but will rely heavily on your ex-spouse’s retirement pension in later years. By agreeing to sign off on your share of the marital property, you may be able to negotiate for a larger chunk of the retirement account.

Even when there is no ready solution to the asset division issues, hiring professionals to properly appraise and valuate community property can enable both parties to get a fair share.

Don’t take on more than your share of debts

Do you know how much you owe to creditors? What about your soon-to-be ex? Many in the throes of divorce are stunned to learn that their spouses have run up huge debts in the months before filing for divorce.

The only way to be sure that you won’t be on the hook for a bunch of surprise debts is to run credit reports for both parties before agreeing how the debts will be divided. This can prevent a financial nightmare from occurring if you believe you owe only $1,500 on the Chase credit card but learn later it’s closer to $15k.

Your family law attorney should also explain that just because the two of you have agreed to divide your debts a certain way, that doesn’t get you off the debt hook if your ex later refuses to honor the payment agreement. That’s why many lawyers advise their divorcing clients to pay off — or at least pay down — the mountain of accrued bills before the divorce is finalized. For some couples, filing bankruptcy is another option.

Don’t forget about Uncle Sam

There can be complex tax issues involved with a divorce, and it’s always better to resolve them now rather than later. Common points of disagreement often focus on dependents and child support arrangements. Make sure that you fully understand who has the right to claim the kids at tax time and which (if any) support payments can be deducted on your tax returns.

Being proactive now saves frustration later

Working closely with your family law attorney and other professionals can ensure that you are left in the best possible position for beginning your new life. This wise investment of your time now can pay off handsomely in the future.