Preparing for a Texas Divorce: Assets
Going through a Divorce is painful no matter what the circumstances. Before you get into the Texas Divorce Process, reduce expense, stress and conflict by making sure you are financially prepared. Planning ahead helps you in making sound decisions, start preparing for post-divorce life, and avoid many post-divorce pitfalls. Below is a list of items you need to gather before counseling with an attorney. Financial Documents are a must to show what your true assets and liabilities are in the marriage.
- Tax Returns (at least three years) or Tax Liens and all IRS related documents
- Wills and Trusts with all attachments reflecting corpus and trust holdings
- Listing of all liabilities (including mortgages, credit card debt, personal loans, automobile loans, etc.):
- Name of entity, address and telephone number
- Account number
- Amount owed
- Monthly payment
- Property securing payment (if any)
- Most current statements and account status of lenders
- A Listing of all Real Property, address and location, including (includes time-shares and vacation properties):
- Deeds of Trust
- Notes including equity loans and second liens
- Legal Descriptions
- Mortgage Companies and Loan Servicers (Name, Address, Telephone Number, Account Number, Balance of Note, Monthly Payments)
- Current fair market value
- Motor Vehicles (including mobile homes, boats, trailers, motorcycles, recreational vehicles; exclude company owned):
- Name on title
- VIN Number
- Fair Market Value
- Name of creditor (if any), address and telephone
- Persons listed on debt
- Account number
- Balance of any loan and monthly payment
- Net Equity in vehicle
- Cash and accounts with financial institutions (checking, savings, commercial bank accounts, credit union funds, IRA’s, CD’s, 401K’s, pension plans and any other form of retirement accounts):
- Name of institution, address and telephone number
- Amount in institution on date of marriage
- Amount in institution currently
- Account Number
- Names on Account
- Company loans and documents related to benefits
- A listing of separate property (property owned prior to marriage, family heir looms, property gifted, inherited property):
- Records that trace your separate property. These assets will remain yours if properly documented
- Retirement Benefits:
- Exact name of plan
- Address of plan administrator
- Starting date of contributions
- Amount currently in account
- Balance of any loan against plan
- Publicly traded stock, bonds and other securities (include securities not in a brokerage, mutual fund, or retirement account):
- Number of shares
- Type of securities
- Certificate numbers
- In possession of
- Name of exchange which listed
- Pledged as collateral?
- Date acquired
- Tax basis
- Current market value
- If stock (date option granted, number of shares and value per share)
- Stock options plans and related documents
- Insurance and Annuities Policies and Inventory:
- Name of insurance company
- Policy Number
- Type of insurance (whole/term/universal)
- Amount of monthly premiums
- Date of Issue
- Face amount
- Cash surrender value
- Current surrender value
- Designated beneficiary
- Other policies and amendments
- Closely held business interests:
- Name of business
- Type of business
- % of ownership
- Number of shares owned if applicable
- Value of shares
- Balance of accounts receivables
- Cash flow reports
- Balance of liabilities
- List of company assets
- Possible hobbies or side businesses that generate income
- Mineral Interests (include any property in which you own the mineral estate, separate and apart from the surface estate, such as oil and gas leases; also include royalty interests, work interests, and producing and non-producing oil and gas wells:
- Name of mineral interest
- Type of interest
- County of location
- Legal description
- Name of producer/operator
- Current market value
- needs leases or production documents related to the asset
- Money owed by spouse (including any expected federal or state income tax refund but not including receivables connected with any business)
- Household furniture, furnishings and Fixtures
- purchase documents
- Electronics and computers including software and hard drive
- Antiques, artwork and collectibles (including works of art, paintings, tapestry, rugs, crystal, coin or stamp collections) Other large collections need to be appraised! (Guns, quilts, action figures, books)
- Miscellaneous sporting goods and firearms
- Jewelry including appraisals
- Animals and livestock
- Farming equipment
- Club Memberships
- Safe deposit box items
- Burial plots including documents of ownership
- Items in any storage facility
- Travel Awards Benefits (including frequent flyer miles)
Under the Texas Family Code, a spouses separate property consists of 1) the property owned or claimed by the spouse before marriage; 2) the property acquired by the spouse during marriage by gift, devise, or descent, and 3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
The terms “owned and claimed” as used in the Texas Family Code mean that where the right to the property accrued before marriage, the property would be separate. Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested. The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate. Inception of title occurs when a party first has a right of claim to the property.
Under Texas Constitution, Art. XVI, Section 15, separate property is defined as all property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of that spouse; and laws shall be passed more clearly defining the rights of the spouses, in relation to separate and community property; provided that persons about to marry and spouses, without the intention to defraud pre-existing creditors, may by written instrument from time to time partition between themselves all or part of their property, then existing or to be acquired, or exchange between themselves the community interest of one spouse or future spouse in any property for the community interest of the other spouse or future spouse in other community property then existing or to be acquired, whereupon the portion or interest set aside to each spouse shall be and constitute a part of the separate property and estate of such spouse or future spouse; spouses may also from time to time, by written instrument, agree between themselves that the income or property from all or part of the separate property then owned or which thereafter might be acquired by only one of them, shall be the separate property of that spouse; if one spouse makes a gift of property to the other that gift is presumed to include all income or property which might arise from that gift of property; and spouses may agree in writing that all or part of the separate property owned by either or both of them shall be the spouses’ community property.
In 1917 the Legislature defined and income from separate property to be the separate property of the owner spouse. In Arnold v. Leonard, 114 Tex. 535,273 S.W. 799 (1925), the Supreme Court held that the Legislature did not have the constitutional authority to characterize the income from separate property as the owner’s separate property. The court explained that the Legislature’s authority was limited to enacting laws regulating the management and liability of marital property, not its separate or community character. This decision strengthened the constitutional principal that the Legislature may not define what is community and separate property in a manner inconsistent with Article 16, Section 15 of the Texas Constitution.
There are numerous means by which separate property may be acquired in defiance of Article 16, Section 15, a partial list includes mutations of separate property, increases in value of separate land and personality, recovery for personal injury not measured by loss of earning power, improvements of separate land with an unascertainable amount of community funds, and United States Securities purchased with community funds.
Although such property may undergo changes or mutations, as long as it is traced and properly identified it will remain separate property.
The Texas Family Code defines community property as follows: “community property consists of the property, other than separate property, acquired by either spouse during marriage.”
Texas Family Code, Section 3.003 states that all property possessed by either spouse during or at the dissolution of the marriage is presumed to be community property and that the degree of proof necessary to establish that property is separate property, rather than community property, is clear and convincing evidence. Clear and convincing evidence is defined as that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. If property cannot be proved to be separate property, then it is deemed to be community property.
The Texas Family Code, Section 7.002, deals with quasi-community property and requires a court divide property wherever the property is situated, if 1) the property was acquired by either spouse while domiciled in another state and the property would have been community property if the spouse who acquired the property had been domiciled in Texas at the time of acquisition; or 2) property was acquired by either spouse in exchange for real or personal property and that property would have been community property if the spouse who acquired the property so exchanged had been domiciled in Texas at the time of the acquisition.
Parental Alienation Syndrome (PAS) is a generally recognized platform that may result in child abuse. This occurs when a custodial parent of a child from a separated family uses deception to deliberately alienate children from their non custodial parent.
If you are a victim of Parental Alienation Syndrome,Dallas fathers rights attorney Mark Nacol urges you to contact an attorney. Discuss your options. Formulate a plan to move forward. Do not give up your parental rights as a father.
Parental Alienation Syndrome is the systematic denigration by one parent with the intent of alienating the child against the target parent. In most cases, the purpose of the alienation is to gain custody of the child and exclude involvement by the target parent. In other cases the alienator wants the target parent out of the way to start a new life, or the alienating parent wants more of the marital money and assets than he/she is entitled to and uses the child as a pawn. The alienating parent hates the target parent and the children become false weapons. These are just a few reasons Parental Alienation occurs in domestic disputes.
Parental Alienation Syndrome is common because it is an effective device for gaining custody of a child. Through systematic alienation, one parent may slowly brainwash a child against the other parent. The parent involved in such alienation behavior then may gain the misplaced loyalty of the child.
In a recent survey, one in five parents stated that their primary objective during the divorce was to make the experience as unpleasant as possible for the former spouse; despite the effects such attitudes and behavior have on the children.
Parental Alienation Syndrome is a form of emotional child abuse. Parents in hostile separations may suffer depression, anger and anxiety or aggression. The expression of these feelings results in withdrawing of love and communication which may extend to the children through the alienating parent. When the mother is the alienator, it is a mechanism employed to stop the father from having contact with his children; and can be described as the mother holding the children “hostages.” The children usually are afraid of the mother and obey her as a means of survival. The child may also be instilled with false memories of the father, coached and/or brainwashed. Parental Alienation Syndrome is recognized by the courts but is very difficult to define and in most cases requires bringing in County Social Services, Child Protective Services, and/or other professionals. Anyone claiming Parental Alienation Syndrome should look for family therapy as a constructive way forward. Other forms of abuse are physical, sexual, and neglect which are much easier to identify.
If the parental alienation has been successful and has influenced the child against the target parent, the observer will see symptoms of parental alienation syndrome. Many children appear healthy until asked about the target parent.
Warning signs of a Parental Alienation Syndrome Child:
- The child is a “parrot” of the alienating parent with the same delusional and irrational beliefs and consistently sides with this parent.
- The child develops serious hatred for the target parent and rejects a relationship with the target parent without any legitimate justification. The child sees nothing “good” about this parent and only wants to destroy the relationship.
- The child refuses to visit or spend time with the target parent.
- The child’s reasons for not wanting a relationship with the target parent are primarily based on what the alienating parent tells the child.
- The child feels no guilt about his/her behavior toward the target parent and will not forgive past indiscretions.
- The child’s hatred extends to the target parent’s extended family without any guilt or remorse.
Children having some of these symptoms may be experiencing Parental Alienation by one of his/her parents. Please contact an attorney and discuss your options on how to help this child. Formulate a plan to move forward. Do not give up your parental rights! Your child desperately needs and is entitled to your help!
In September 1, 2011, Texas House Bill 901 ( Texas HB 901 ) revised the spousal maintenance law in the Texas Family Code effective for divorce cases filed on or after September 1, 2011. The bill revised the conditions that establish eligibility for spousal maintenance, commonly referred to as alimony, and changes the factors required to be considered by a court in determining the nature, amount, duration, and manner of periodic payments for a spouse who is eligible to receive maintenance.
Eligibility for spousal maintenance still requires that the spouse seeking maintenance lacks sufficient property to provide for the spouse’s minimum reasonable needs.
The law provides potentially increased relief to spouses who have been out of the work force, are disabled, are victims of family violence or are the primary custodians of a disabled child.
Some of the major items in the Texas Spousal Support Law are:
1. The maximum amount of spousal support that courts may award increased from $2,500 to $5,000.00 per month, although it is still limited to 20 percent of the payer’s average gross monthly income.
2. The duration of spousal support in Texas is a maximum of 5, 7 or 10 years, generally depending on the length of the marriage.
3. The law clarifies if a person has primary care for a disabled child, the custodial parent may be prevented because of the child’s disability from earning sufficient income to meet the custodial parent’s minimum reasonable needs.
4. The law also clarifies a person may not be held in contempt for failing to pay spousal support which is in an agreed order and extends beyond the period of time provided under the law.
In order to receive “maintenance,” (which is the statutory term for spousal support), the spouse seeking support must lack sufficient property to provide for the spouse’s “minimum reasonable needs”, AND one of the following:
(1) The recipient must be unable to earn sufficient income to provide for his or her minimum reasonable needs because of an incapacitating mental or physical disability;
(2) The marriage lasted for 10 years or longer and the recipient lacks the ability to earn sufficient income to provide for his or her minimum reasonable needs;
(3) The recipient is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for the spouse’s minimum reasonable needs; OR
(4) The person ordered to pay support was convicted of or received deferred jurisdiction for an act of family violence during the pendency of the suit or within two years of the date the suit is filed.
The court can order maintenance to continue for:
(1) 5 years if the parties were married less than 10 years and the maintenance is awarded due to family violence;
(2) 5 years if the parties were married more than 10 years, but less than 20 years.
(3) 7 years if the parties were married more than 20 years, but less than 30 years;
(4) 10 years if the parties were married for more than 30 years.
In cases where the maintenance is awarded due to the mental or physical disability of the spouse or a child of the marriage, the court may order that the maintenance continue as long as the disability continues.
However, in all circumstances, the law provides that the Court shall order maintenance for the shortest reasonable period that allows the recipient to earn sufficient income to meet his or her reasonable needs.
What about Termination?
a. The obligation to pay future maintenance terminates on the death of either party or on the remarriage of the oblige.
b. After a hearing, the court shall order the termination of the maintenance obligation if the court finds that the obligee cohabits with another person with whom the obligee has a dating or romantic relationship in a permanent place of abode on a continuing basis.
c. Termination of the maintenance obligation does not terminate the obligation to pay any maintenance that accrued before the date of termination, whether as a result of death or remarriage
If you are contemplating dissolving your marriage and have questions concerning your financial future, seek competent legal counsel to help you determine whether you could be eligible for spousal support the provisions of the law.