Whether yours is a median income household in Texas or your financial status falls within an upper income level, it is always a good idea to periodically review your financial records and to take stock of your personal inventory of assets and liabilities. Certain circumstances may arise that would make this type of review a priority on your to-do list. For instance, if you’re filing for divorce, it’s critical to be aware of your finances if you hope to achieve a fair settlement.
Texas is one of only nine states throughout the country that operate under community property guidelines in divorce. This basically means that you and your ex will split all marital property 50/50. It also means that you will each be responsible for an equal share of any marital debt you owe when it comes time to negotiate a settlement.
Do you have separate ownership of any assets?
Assets that you or your spouse have acquired during marriage are listed as marital property when you file for a divorce. However, you may own certain assets separately from your spouse, which means that they would not be included in property division proceedings. Assets that may fall under this category are in the following list:
- An inheritance that was a gift specifically to you and you alone
- Money that you were awarded through litigation
- Real estate, money or other assets that you acquired before marriage
- Assets that are listed in a prenuptial agreement clause, which designates separate ownership to you
Income, property or other assets that you or your spouse earned or acquired during marriage are usually jointly owned in Texas, unless a specific asset meets the requirements for separate ownership.
How are non-financial assets divided?
You can’t split a house or car or piece of artwork in half. To divide this type of marital property in a divorce, the court focuses on the value of the property in question. It is sometimes possible to trade assets, meaning that you would agree to keep a particular thing, such as a vehicle or luxury boat, while your ex agrees to retain ownership of another asset of equal value.
Make sure you understand state guidelines
Whether property division proceedings in your divorce will be simple and basic or complex and challenging, either way, it is important to make sure you clearly understand state laws and guidelines before negotiations begin. Numerous financial issues, such as taxes, retirement benefits, business revenue and more, may be relevant to your settlement.
It is always better to take your time and ask questions, rather than agree to a settlement when you aren’t certain if it is fair.