The word “wealth” is a subjective and ambiguous term. While having a certain amount of money might make you feel wealthy, another person you know might set the bar much higher (or lower) to determine whether he or she is wealthy. If you file for divorce in Texas, it may or may not be considered a high-asset proceeding.
To determine if you are a high-net-worth individual, the court would typically review your liquid assets to check if they are at or above a certain level. If your liquid financial assets equal $1 million or more, you would fit the category for a high-net-worth divorce. Liquid assets basically refer to cash or cash equivalents, as opposed to artwork or property that one could not liquidate immediately.
If you are one of the high-net-worth individuals (HNWI) in the US
In 2021, there were approximately 7 million or more HNWIs in the United States. If you are also one of the many people in Texas who are filing for a divorce, you may encounter challenges during property division proceedings that someone who has a lower net worth might experience in similar proceedings.
It may be best to consult with a financial advisor before heading to court if you plan on filing for a divorce as a HNWI. In addition to cash or cash equivalents, you might have several real estate properties, vehicles, vacation homes, jewelry, an art collection, or stocks and investments that you want to protect when the time comes to determine who gets what in your divorce.
Texas operates under community property guidelines in a divorce
Texas, as well as several other states, is unique insofar as the guidelines it uses to divide assets in a divorce. It is a community property state, meaning that the court will typically split all marital property 50/50 between spouses. You might have signed a prenuptial agreement before you got married, in order to retain separate ownership of certain assets.
If so, then your prenup will affect the ultimate outcome of property division proceedings in your divorce. It’s understandable that you want to protect what is rightfully yours as you and your spouse make plans to go your separate ways in life. It is especially understandable that you might have concerns if you suspect that your spouse may try to give you the short end of the stick in court by hiding assets or not fully disclosing assets and liabilities. Being well-informed and prepared can help you avoid problems.