In the state of Texas, marital assets in a divorce are subject to equal division, regardless of the circumstances. This is in contrast to many other states, where assets are divided according to the circumstances of the marriage and the divorce.
If you are going through a high asset divorce, you may feel quite frustrated by this law, because you likely believe that you are entitled to more than 50% of the assets held within the marriage. While there are not many options to change this outcome unless you were able to have your divorcing spouse sign a prenuptial or postnuptial agreement, there is one important way that you can ensure that the process of dividing assets is done fairly, and that is by ensuring that assets are correctly categorized.
How do I correctly categorize assets?
It is important to note that only marital assets are subject to a 50/50 split between spouses in Texas divorces. Very often, spouses unlawfully hide marital assets in offshore accounts so that they are not discovered, or they (intentionally or unintentionally) incorrectly categorize assets as marital or separate.
Separate property is not subject to division in divorce. Therefore, any assets that you can categorize as your own separate property rather than marital property you can keep for yourself.
What counts as separate property?
Any property that was gifted to you, by your spouse or by another person, is solely yours. This could include birthday gifts, family heirlooms or any other gifts given to you. In addition, inheritances made only to you and personal injury awards are counted as separate property. Perhaps most notably, assets that you purchased before the marriage, and the income generated from those assets, are counted as separate property.
If you are going through a high asset divorce, it is especially important that you are able to correctly categorize assets. This could be complex and time-consuming, which is why it’s vital that you take early action to get the best possible result.